Aer Lingus: Cost-cutting programme may not go far enough
Aer Lingus has made a difficult start to the year, and has warned that its current cost-cutting programme may not now be enough to secure the airline's future.
The cost-cutting programme, called Greenfield, was to save Aer Lingus €97m. It ncluded 650 voluntary redundancies, pay cuts and a pay freeze.
In the first three months of the year, the airline recorded an operating loss before exceptional items of €53.7m, an increase of 41.7% on last year, and put this down to the effects of the IMPACT cabin crew dispute in January and February, the timing of the Easter holiday period and a poor performance of some Irish originating leisure routes.
Despite the gloomy start to the year, the airline said in a statement this morning that "management still expects that Aer Lingus will generate an operating profit before exceptional items for 2011, but now at a significantly lower level than in 2010".
Aer Lingus CEO Christoph Mueller said: "In light of the continued weakness of the Irish economy and pressures on non-controllable costs, we are assessing whether the Greenfield cost reduction programme is sufficient to protect profitability for the future or whether further measures are required.
"We will update the market in due course."
