Aer Lingus gets over ash cloud and downturn to slash losses

Aer Lingus dramatically reduced its losses in the first half and bosses believe it can break even by the end of the year.

The Irish low cost airline, which is in the middle of a difficult cost-cutting programme, suffered 19 million (£15.5 million) losses for the six months to the end of June, a huge improvement on the 93 million (£75.9 million) figure for the first half of last year.

Chief executive Christoph Mueller said the improvements were significant as the airline had to deal with difficulties caused by the Icelandic volcanic ash crisis and sluggish markets.

"For the 2010 full year, we expect to report an operating performance (before exceptional items) of no worse than break-even," he said.

"This would represent a good performance in difficult market conditions but is predicated on the delivery of committed staff productivity savings and no further significant disruptions to operations from industrial action or airspace closures."

However, he said cost-cutting at the airline would continue. Aer Lingus is trying to avoid damage to operations through a planned work-to-rule by members of the Impact trade union over the cost-cutting exercise.

"Despite the group's strong commercial performance, Aer Lingus has not been complacent in addressing its cost position," Mueller said.

Aer Lingus carried 4.4 million passengers in the first half of the year, half a million fewer than the same time last year.