Aer Lingus CEO Lynne Embleton has voiced opposition to Dublin Airport's proposal for the airline to limit its ad-hoc flights in 2023. The request is part of the airport's move to comply with a 32 million annual passenger cap, a condition established with the construction of Terminal 2 two decades ago. Embleton criticized the airport for attracting new airlines like US carrier JetBlue while simultaneously asking Aer Lingus to limit its services, which she believes will lead to underutilization of the airport's €320m runway investment.
Despite this disagreement, Embleton confirmed that Aer Lingus' transatlantic services, including a new Denver service and the relaunched Minneapolis-St Paul route, will continue unaffected next year. Ad-hoc flights potentially at risk include those ferrying Irish fans to sports matches and Americans attending the annual Aer Lingus College Football Classic event.
The Dublin Airport Authority (DAA) is currently in negotiations with airlines such as Aer Lingus and Ryanair (NASDAQ:RYAAY) to ensure compliance with the passenger cap. Later this year, the DAA plans to apply for a raise in the cap to accommodate 40 million passengers annually.
Embleton suggested that if growth in Dublin is restricted, Manchester could serve as an alternative growth hub for Aer Lingus. The city offers a profitable base with direct services to the US and the Caribbean.
In other news, despite a decrease in business passenger volumes and revenues compared to 2019, particularly among tech executives, IAG (LON:ICAG) (Aer Lingus' parent company) reported record third-quarter results. Aer Lingus also announced a €196m operating profit before exceptionals for this period, outdoing its third-quarter results from 2019.
The airline also experienced record premium class load factors during the summer season. This was driven by a 15% capacity increase across both long and short hauls, including the airline's largest long-haul schedule ever. Short-haul routes saw a 14% rise, largely fueled by passenger trips to Mediterranean destinations such as northern Spain, the Greek Islands, and Croatia. Despite increased operating costs and lingering effects on business travel, Q3 2023 revenues surged by 16% compared to the same period last year, restoring passenger numbers to pre-pandemic levels.
The Q3 operating profit before exceptional items reached €196m, a 27% increase from 2019 levels. Parent company IAG posted a record third-quarter profit of €1.7bn. As part of IAG's 20-aircraft acquisition in 2023, Aer Lingus received an Airbus A320neo EI-NSC St Fergal. IAG also secured wage agreements and extended a $1.655bn Revolving Credit Facility until March 2026.
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