Aer Lingus executives fastening their seat belts for a bumpy ride ahead

With peak summer travel well under way, these weeks are generally Aer Lingus’s most profitable. They will be critical for the Irish carrier this year.It has been a mixed year so far. Aer Lingus lost €34 million in the first six months as a €69 million profit in the second quarter, which ended on June 30th, failed to fully offset the €103 million loss the airline made in the first three months of the year. At the same point last year, its businesses had earned €80 million in profit. That the final surplus last year was €282 million gives Aer Lingus grounds for optimism, as much of that would have been earned during these crucial three months to the end of September.Chief executive Lynne Embleton expects the airline to make a profit this year, “in the low single digits”, which translates as less than €10 million.READ MOREHigh fuel bills are the headline culprits for the €114 million difference between the first halves of this year and 2025. But fuel actually accounted for less than half that hit. More than 60 per cent came from increased costs elsewhere in the business, including suppliers coupled with lower passenger revenues, the result of increased competition on the North Atlantic. US carriers including United Airlines, American Airlines and JetBlue have increased seat numbers on routes to Dublin by 35 per cent over the summer and up to 45 per cent in winter.More competition means lower fares, which is good news for holidaymakers but not so good for airlines, as they make less money. Aer Lingus’s plan to combat this involves cutting up to 500 jobs and axing some routes. This has angered unions, which point out that the airline is profitable. Aer Lingus argues that it must increase operating margins – the gap between cost and revenue – to between 12 and 15 per cent to guarantee that its owner, International Airlines Group (IAG), will provide it with extra aircraft to expand in the future.That raises some questions: Aer Lingus’s margins in the six months to June 30th were 9.8 per cent; for IAG as a whole, they were 10.9 per cent overall. One of the group’s other carriers, Spanish budget airline Vueling, made just 8.6 per cent.IAG chief executive Luis Gallego says that overall margins will hit 12 to 15 per cent this year, except at Aer Lingus, which he says must catch up with the rest of the group.[ Turbulence ahead as Aer Lingus shake-up plan shocks unionsOpens in new window ]Unions Fórsa and the Irish Air Line Pilots’ Association (Ialpa) do not buy this. Fórsa, which represents cabin crew and office staff, where 430 of the planned job losses are likely to fall, branded IAG’s demands as “corporate greed”, according to reports on Friday.Aer Lingus customers may be packing their bags for a summer break but its executives are fastening their seat belts as the airline heads for a bumpy industrial relations ride.