Aer Lingus to break even 'at best' this year
07.06.08
Aer Lingus said yesterday that it would break even this year at best, as the slowing 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. He 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, it may consider ‘cancelling or deferring’ some short-haul flights this winter. He said: ‘There is no doubt in these days of very high fuel prices that there is going to be casualties. Aer Lingus is in a very strong position. We will not be a casualty.’
‘The board is confident that the company's medium-term growth plans remain on track. We have a strong balance sheet and a strong management team to take the business through the current period of uncertainty.’
The comments came as oil hit new highs of $139 in New York yesterday.
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