Competition from American carriers adds to Aer Lingus trading woes

Aer Lingus made an operating profit of E9m in the first six months of 2024, down E31m compared with last year. Some of this was driven by the industrial action taken by pilots in a row over pay, but only some. In a statement, Aer Lingus said the industrial action resulted in a E55m direct financial cost to the business over the second and third quarters, before factoring in the intangible impact on forward bookings. There were five days of disruptions in late June due to the work to rule by pilots while the flight schedule didn’t return to normal until July 17th (its third quarter). The other key factor in its profit decline was competition on transatlantic routes. American carriers increased their capacity into Ireland by 20% this summer, “putting pressure on Aer Lingus’ long-haul revenues, particularly in the economy cabin”. This is expected to continue into the third quarter. Interestingly, Aer Lingus appears to be outperforming its peers in International Airlines Group (IAG) in terms of its business cabin (only offered on transatlantic routes in the case of the Irish airline). On a conference call with analysts after the publication of its interim results, IAG CE Luis Gallego said Aer Lingus’s volumes on business travel were “close to” 100% of the pre-Covid level in 2019 while revenues were at 95%.<br/>