asked the Minister for Transport the anticipated losses by Aer Lingus on the North Atlantic route this year; and if he has any proposals to reduce these losses.
Written Answers. - Aer Lingus North Atlantic Losses.
40.
Aer Lingus will undoubtedly incur a substantial loss on their North Atlantic service this year but the company are not at this stage in a position to predict the level of losses because of the many unknown factors involved. These include uncertainty about the economic climate at home and abroad, the possible effect of the international political situation on transatlantic travel, the level of aviation fuel prices and the supply position, currency fluctuations and the trends in transatlantic fares.
All airlines operating on the North Atlantic have returned losses in recent years and, in the present economic and regulatory environment, the prospects of a return to profit or break-even seem very poor. The question of measures to reduce losses are matters for Aer Lingus board and management. I have been advised by the company that they are seeking to minimise those losses by a programme of cost reduction, schedules control with cut-backs where required to optimise use of resources together with an aggressive marketing programme.
Last year the company withdrew from the Shannon-Montreal route and all routes must obviously be subject to regular review. In the meantime the company are maximising the use of the Boeing 747 aircraft and phasing out the less economic Boeing 707. To ensure the highest load factors and the most economic use of aircraft, they have introduced a range of highly competitive promotional fares.
Aer Lingus are continuing to return substantial profits from their ancillary activities, including their North American hotel operations, and the company will be seeking to maintain and increase profit levels on these activities so as to offset losses on the air transport side.