Aer Lingus has reported an 18 per cent increase in operating profits rising to €72 million (£52.76 million).
The Irish airline has benefited from an uplift in interest on its long-distance routes. Despite the rise in operating profits, Aer Lingus made a loss of €180 million on a pre-tax basis. This was down to a one-off charge to allow the company to resolve pension funding issues. The carrier added that 11 million passengers had used its service on short and long haul flights over the course of the year.
Aer Lingus has been the subject of a takeover from British Airways owner International Airlines Group (IAG) but the move has faced increased scepticism from the Irish government which has not yet given its backing to the bid. Despite the Aer Lingus board recommending the €1.36 billion takeover, it has still to gain the approval of the government which holds a 25.1 per cent stake in the business.
Commenting on the latest trading figures, Colm Barrington, Aer Lingus chairman, said: "To enhance these excellent results and to accelerate Aer Lingus’ growth, it is the board’s strong belief that the company should now take the opportunity to combine with IAG.
"In this combination Aer Lingus will operate as a separate business while gaining access to IAG’s extensive network and benefiting from its scale."
IAG has been pursuing a takeover of Aer Lingus for a number of months with the company previously seeing bids rejected. The British Airways owner is looking to acquire the Irish carrier to gain a bigger influence at Heathrow Airport. Aer Lingus currently has 23 pairs of take-off and landing slots at the London airport, valued at around £30 million apiece. Only British Airways, Lufthansa and Virgin Atlantic boast more.
The takeover process is a complicated one as IAG will need to get the approval of not only the Aer Lingus board but also the Irish government and Ryanair, which also holds an interest in Aer Lingus.
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.