O'Leary calls for apology for shareholders
Aer Lingus today (March 11) announced a post-tax loss of €108m for 2008, compared with a €105m profit in 2007.
The Irish carrier said its operating loss for the 12 months to the end of December was €17.6m.
It said it expected average fare levels to fall by "at least" 10% in 2009 and that it was "unlikely" to meet its prediction of a pre-tax profit for this year.
Michael O'Leary, ceo of Ryanair, which has a 29.82% stake in Aer Lingus, called on the airline to apologise to shareholders for misleading them.
A statement by Aer Lingus said: "Passengers are increasingly booking later and lower fares are necessary to ensure load factors remain stable.
"In order to maintain volumes, it is now expected that in 2009 average fares will decline by a minimum of 10 percent as compared to 2008."
Aer Lingus said its pre-tax profit for 2008 was €21.2m which took into account a net finance income of €38.8m but not restructuring costs of €117.5m.
"In the current climate we believe that in 2009 Aer Lingus will experience a larger operating loss than in 2008 and that in these circumstances the group is unlikely to meet its previous guidance of a pre-tax profit in 2009," it said.
The airline has fought off two hostile take over attempts by Ryanair, Europe's largest low cost carrier.
In the latest bid of €748m, which Ryanair called off last month, Aer Lingus's defence was that it was a profitable carrier.
The Irish national carrier said in its defence document last December that it was a profitable business with a clear strategy for growth.
It said it had unmatched financial strength, had delivered on its promises, had a vibrant future and did not need the low cost carrier.
In a letter to the shareholders, Aer Lingus chairman Colm Barrington said: "The offer fundamentally undervalues Aer Lingus, its robust financial position and strong growth prospects.
"The offer also misrepresents the significant progress of Aer Lingus since the IPO in 2006 and seeks to undermine Aer Lingus' vibrant future as an independent airline."
In a stement today (march 11), Ryanair called today on Mr Barrington and the Aer Lingus board to "explain to shareholders why they continue to preside over an enormous collapse in shareholder value and why they recommended rejection of Ryanair's €1.40 per share offer just 10 weeks ago, at a time when they were presiding over enormous losses in 2008, increased operating losses in 2009, and a share price which has collapsed by more than 50% from €1.40 to less than 70 cents today."
Mr O'Leary added: "Irish taxpayers are entitled to ask the Department of Transport why they rejected Ryanair's €1.40 offer. What does this say about the Department of Transport's financial judgement?"
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