Aer Lingus:High fuel costs will dent profit

Irish airline Aer Lingus warned profit would fall this year due to higher fuel costs and said a growing pension deficit had the potential to spark industrial action that would hurt the company. The airline beat analyst expectations by posting an operating profit of 49.1 million euros ($65.77 million) in the year to December, compared to an average forecast of 40.7 million by five analysts polled by Reuters. But it said its fuel bill would increase by 60 million euros this year if oil prices remained at current levels. That would wipe out the benefit of expected low single-digit growth in passenger numbers and yield, the keenly watched measure showing average revenue gained per mile per passenger. “We think we will make a decent profit but it will be a little bit lower than this year,” Chief Financial Officer Andrew McFarland told journalists. Aer Lingus lost 40 per cent of its value last year on weak demand in its home market and concerns it would have to contribute to cover the large shortfall in the pension scheme. But it has regained two-thirds of that loss since the start of the year, buoyed by the collapse of rivals Spanair and Malev and reports of interest in the government’s 25 per cent stake in the airline.