Aer Lingus on course for float

By THIS IS MONEY
Updated:

 

Aer Lingus said it still means to float next year, despite a 30% fall in net income as Ireland's State airline hit turbulence from higher taxes, loan repayments, rising fuel costs and no-frills competitors.

Net income for the country's second-biggest carrier dropped to 51.9m euros from £31m in 1999, even though sales rose 12% to 1.13bn euros and passenger numbers rose 13% to 6.5m.

A placing is 'vital, if the company is to grow in an 'intensely competitive' airline industry, Aer Lingus chairman Bernie Cahill said. Flotation, which has yet to receive the go-ahead from the minority coalition government, could raise as much as £560m or as little as less than half that, analysts guess.

Aer Lingus is being squeezed by low-cost competitors such as Dublin-based Ryanair, Ireland's biggest airline group, and fuel prices which rose 44% in the first quarter.

'Many full-service international carriers have found the going tough over the past 18 months,' Cahill said. 'Aer Lingus has turned in a good performance in a difficult environment and is in good shape for the future.'

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