Aer Lingus Reports Fall In Q2 Profit

Aer Lingus reported an 11 percent fall in second-quarter profit a day before the deadline for shareholders to accept a takeover bid by IAG.

British Airways and Iberia owner IAG has secured the agreement of more than 50 percent of shareholders for the EUR€1.3 billion (USD$1.4 billion) takeover and has said it hopes to get 90 percent by the Thursday deadline. Aer Lingus declined to comment on the rate of acceptance.

Aer Lingus, which flew 10 million passengers last year compared to IAG's 77 million, reported operating profit before exceptional items of EUR€34.5 million in the three months to June, a fall of 11 percent from the same period last year.

Aer Lingus chief executive Stephen Kavanagh said the decline was primarily due to adverse currency moves, a weaker euro versus the dollar and pound, which hit the airline to the tune of EUR€21 million.

But he said "the headwind would become a tailwind" in the second half and he was confident about underlying trends.

Revenues at Aer Lingus' expanding long-haul business rose 24 percent in the second quarter, though short-haul revenue fell four percent due to "tactical reductions" on some routes.

Ireland's largest airline Ryanair has said it will target short-haul competitors with average fare cuts of up to 8 percent this winter.

Aer Lingus chief financial officer Bernard Bot said he was confident Aer Lingus could defend its position, aided by a new premium economy product.