Irish airline Aer Lingus upgraded its 2012 operating profit forecast on Thursday, saying it expected to match last year's EUR€49 million (USD$64 million) as higher revenue per passenger mile compensated for growing costs.
The warned in February that fuel costs would cause profits to fall in 2012 from 2011 levels.
But strong growth in yields, the keenly watched measure of revenue per passenger mile, helped boost revenues by 15 percent cutting the airline's loss in the traditionally weak first quarter by one-third to EUR€36.1 million.
"We now share the (International Air Transport Association's) more upbeat view on industry trends," chief executive Christoph Mueller said in a statement, referring to IATA's April business confidence survey.
"If current trends continue, Aer Lingus' operating profit for 2012 should match that achieved in 2011."
Revenues per passenger mile were up 6 percent on short-haul services and 11 percent on long haul.
Aer Lingus has returned to profitability by refocusing its fleet away from delivering Irish holiday-makers to beaches and ski slopes and towards inbound travel from higher growth areas in continental Europe and sales of higher-price last-minute tickets.
The airline warned, however, that the performance of some short-haul routes was weaker than expected.
Operating expenses increased 5.9 percent with lower aircraft lease charges helping to offset a fuel bill that was 31 percent higher than the year before.
Aer Lingus reported no progress in crucial talks with staff over a EUR€700 million deficit in a pension scheme that has scared off some investors.
The airline says it has no legal obligation to increase its fixed contribution to its pension scheme, but is holding talks with unions about the shortfall in an effort to avoid industrial action.
