Aer Lingus to break even ‘at best’ in 2008
07.06.08
Aer Lingus said yesterday it would at best break even this year, as the slowing world economy, the weakness of sterling and the dollar and rising fuel costs hit its results. Irish rival Ryanair, which owns a 29.2% stake in Aer Lingus, also warned this week that high fuel costs could see it break even this year.
Aer Lingus Chairman John Sharman told the annual shareholders' meeting: ‘Based on current fuel prices and the uncertain economic outlook, we expect, at best, to break even for the year 2008.’ He added that the challenging climate would not allow the airline to increase its long-haul fleet in 2009 despite its medium-term strategy for long-haul growth and also announced that Aer Lingus would suspend its service to Los Angeles from November 2.
Chief Executive Dermot Mannion added that the airline had no plans to ground any short-haul aircraft, however, though it may consider ‘cancelling or deferring’ some short-haul flights in the winter season. He said: ‘There is no doubt in these days of very high fuel prices there is going to be casualties across the industry. Aer Lingus is in a very strong position. We will not be a casualty.’
‘The board remains confident that the company's medium-term growth plans remain on track. Aer Lingus has a strong balance sheet and a strong management team to manage its business through the current period of uncertainty.’
The comments came as oil hit new highs of $139 in New York, bringing the prospect of heavy 2008 losses into sharp focus.
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