Aer Lingus sees losses grow

Irish flagcarrier Aer Lingus reported a worsening financial position this morning, with a net loss of €73.9m for the first six months of the year, more than three times the €21.6m deficit it recorded in the same period of 2008. Revenue fell 12.2 per cent to €555m on lower fares, which fell 17.1 per cent year on year, a drop which in fact had the effect of increasing passenger numbers to 4.94m from 4.86m.

The numbers will increase the pressure on the former state-run airline ahead of the installation of Christophe Mueller as new chief executive on September 1. It talked of an "uncertain outlook", which will make Mueller's job to return the group to profitabililty an even more difficult one.

The airline blamed a lack of consumer confidence and government tax measures for its woes, with chairman Com Barrington saying "The scale of the operating loss clearly illustrates the extent of the challenges facing Aer Lingus in the current environment. While traffic volumes have stabilised, consumer confidence remains weak and we see no sign of any improvement in the near term."

There appears to be little respite for the operator with rival Ryanair gaining market share at its expense and its cash position dwindling by a third since 2008 to €439.6m.

WHAT THEY ARE SAYING:Tracy Alloway in the Financial Times: "The carrier is burning through its cash reserves like a KPMG wife goes through her husband’s money. Cash is truly king for airlines during a recession… Cash burn of this magnitude – an 88 per cent decrease in six months – is a truly worrying thing." ·