Aer Lingus owner IAG said the reopening of transatlantic travel would help its aim to return to profit next year
“Obviously it won’t stay that way for the rest of the winter, but it does show that there was a pent up demand,” the CEO said.
“Generally speaking, our bookings are tracking where we would like them – given the capacity we have restored,” she added.
Aer Lingus has said its goal is to get capacity on its transatlantic flights back to 90% of pre-pandemic levels by next summer.
Ms Embleton described this goal as “ambitious”. “We do want to get connectivity back up and running; we want to get our people working again and we believe that the ambitious schedule for next year is the right one,” she said.
She said capacity for the fourth quarter was under 50%.
“Obviously the announcement of the US reopening was very recent, so we need time to build back up passenger confidence and bookings. We are seeing some pockets of strong bookings in the fourth quarter, but we do still need time for the market to recognise that Ireland is open again and people are flying again,” she said.
Aer Lingus CEO Lynne Embleton
Commenting on today’s quarterly results, Ms Embleton said the airline lost €80m in the third quarter, which was less than it lost in the second quarter.
“This Covid pandemic has continued to have an impact on Aer Lingus. For the third quarter we only flew 27% of 2019 levels, which was the lowest across the group and that was driven by the restrictions that were in place,” the airline CEO said.
“The third quarter continued to be very difficult for us,” she said.
Ms Embleton said her first priority is to get people working again and to get their wage levels restored.
“People have been on pay restrictions for some time now, so that is my priority.
“We have kept as many people employed throughout the pandemic as we could and I think that was the right thing to do, and we are looking to get more people working again,” she said.
In relation to additional funding, Ms Embleton said Aer Lingus is still in talks with the Ireland Strategic Investment Fund (ISIF) and confirmed that the airline has drawn down €150m from the ISIF so far.
Ms Embleton said that facility was agreed back in December 2020, and “a lot has happened since then”.
“We have had significant losses since then,” she said, adding that the airline is looking at its liquidity position with IAG.
Ms Embleton said the airline is open for more funds “if needed”.
Earlier, Aer Lingus owner IAG said it was heading for a €3 billion loss for 2021, but added that the reopening of transatlantic travel would help its aim to return to profit next year.
IAG said today it planned to fly about 60% of its pre-pandemic capacity in the current quarter.
But pandemic restrictions which lasted most of 2021 will push the group to an annual operating loss before exceptional items of about €3 billion, IAG warned, slightly behind a consensus forecast for a loss of €2.87 billion.
That puts IAG, which also owns British Airways, Iberia and Vueling, behind European competitors Air France-KLM, which has guided to slightly positive earnings for 2021, and Germany’s Lufthansa which eked out a small quarterly profit for the months from July to September.
IAG has suffered from its greater exposure to Britain and Ireland, where complicated and expensive Covid-19 testing rules deterred travel over the summer, while Air France and Lufthansa’s main home markets recovered more quickly due to less restrictive rules.
On Aer Lingus, IAG said the airline’s capacity in the first quarter of 2021 was driven by cargo needs, with flights operating regularly to New York, JFK, Chicago and Boston with very low passenger load factors.
In the second quarter, it said Aer Lingus capacity continued to be severely limited by the “stringent” restrictions put in place by the Irish Government, with passenger load factors averaging only 20%.
But in the third quarter Aer Lingus expanded its operations after the Government’s decision to ease travel restrictions for non-essential travel on July 19.
Domestic capacity also increased following the transfer of a number of routes from Stobart Air following its liquidation, IAG added.
IAG CEO Luis Gallego
“All our airlines have shown improvements with the group’s operating loss more than halved compared to previous quarters. In Q3, our operating cash flow was positive for the first time since the start of the pandemic and our liquidity is higher than ever, reaching €12.1 billion on a pro forma basis at the end of October,” the CEO said.
“In the short term, we are focused on getting ready to operate as much capacity as we can and ensuring IAG is set up to return to profitability in 2022,” Luis Gallego said.
“Our teams are creating opportunities and implementing initiatives to transform our business and preparing it for the future so that we emerge more competitive. This includes initiatives such as our new shorthaul operation at Gatwick, Vueling’s expansion at Paris-Orly, Aer Lingus’ services from Manchester to the US and the Caribbean and our new maintenance model in Barcelona,” he said.
The IAG CEO also said the company remains resolute on its climate commitments.
“We’re transforming our business and driving change to create a truly sustainable airline industry. IAG has led the way by being the first airline group worldwide to commit to achieving net zero carbon emissions by 2050 and we welcome IATA’s recent announcement that the industry will join us in meeting this goal,” he added.