Airline’s deep cost-cutting may be too little

Aer Lingus posts poor quarterly results, cites “difficult demand conditions”

Even after implementing a controversial €97 million cost-reduction strategy, known as the Greenfield cost reduction program, the Irish airline Aer Lingus warns that it may not be enough to keep the carrier’s future secured. The program involves, among other things, more than 650 voluntary redundancies, pay cuts and a pay freeze.
The airline posted a €56 million loss in Q1 2011. This was caused, according to CEO Christoph Mueller, by Ireland’s reeling economy, the high cost of fuel and a cabin crew strike lasting almost a month. “Our performance was affected by the Impact cabin-crew disruption in January and February, as well as difficult demand conditions, particularly on leisure routes from Ireland,” he explained, adding that he was assessing whether the cost cutting would be enough. He promised, however, that the airline would still be profitable in 2011.
Press Association


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