It seems Irish airline Aer Lingus may be in jeopardy after warning customers a new cost saving programme named Greenfield may not be enough to secure its future.
The Greenfield programme saved it around €97million in costs but Aer Lingus believes that the continued weakness of the Irish economy and pressures on costs may make it questionable as to whether this is enough to protect profitability or whether further measures will be required.
Profit prediction
Despite a difficult start to the year, Aer Lingus is predicting that it will generate an operating profit before exceptional items for 2011 – although this will be at a significantly lower level than in 2010. It reports that its operating loss before exceptional items for the first three months of the year rose to €53.7million from €37.9million the same time last year following the IMPACT cabin crew dispute, the timing of the Easter holidays and poor performance of several Irish leisure routes.
In addition, it reports that revenue for the first quarter fell by 4.8 per cent despite an 11 per cent reduction in capacity and passenger numbers rising in April by 19 per cent compared to a year ago, helped in comparison by the period last year when airspace was closed due to the ash risk from the Icelandic volcano.
Going forward, Aer Lingus will take delivery of a fourth A320 by the end of June although no further fleet additions are planned for the rest of the year. It has also exercised an option with Airbus to defer an order for three A330 aircraft.
Fears
News of an airline struggling may prompt fears among consumers that price increases are inevitable. That is why it is increasingly important that customers shop around before booking their flights and holidays.
The obvious first step is to use a comparison website or flight finder website to compare the rates from numerous airlines to your destination of choice. However, also be aware that these comparison websites may not list all airlines and it might still be worth approaching some budget companies independently. Also be on the lookout for promo codes from comparison websites like Expedia and from individual airlines such as Aer Lingus, which could offer further savings on your bookings. In addition, be mindful of signing up for unnecessary extras. Many flight companies will include travel insurance automatically when you book a flight – however, you are likely to secure a much cheaper rate by shopping for insurance independently.
Also consider whether you could save money by booking a package holiday instead of a flight and accommodation separately. Many online travel agents will reduce their prices for package holidays and again, promo codes may be available.
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