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Currency effects bite into Aer Lingus first half

Irish flag-carrier Aer Lingus’s first-half operating loss has increased by 40% to nearly €14 million ($15 million).

But the carrier insists it is “well-positioned” to deliver improved operating performance over the third quarter and the full year.

The operating profit for the second quarter was down by nearly 11% to €34.5 million, excluding exceptional items, despite a 7% rise in revenues to €469 million.

Aer Lingus says it experienced “adverse effects” from unfavourable currency exchange but states that it expects these to “moderate” in the second half, as higher proportions of US dollar revenues emerge.

Appreciation of the US dollar and UK sterling against the euro resulted in a €21 million impact on operating profit, the airline says, the result of a €46 million effect on operating costs, offset by a €25 million positive sway on revenues.

But Aer Lingus is optimistic about prospects for the second half of the year.

“Both short- and long-haul capacity are set to expand into the peak season and we are very satisfied with forward yield and load-factor profiles at this time,” says chief executive Stephen Kavanagh.

Aer Lingus carried 14% more long-haul passengers over the first half but 1.7% fewer short-haul customers, meaning that overall passenger numbers stayed flat at 4.6 million.

But the effect on traffic, combined with a 3% capacity hike over the six months to 30 June, enabled Aer Lingus to raise overall load factor by 2.2 points to 78.3%.

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