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Thu 31 Jul 2014 11:53 AM

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Etihad-backed Aer Lingus lifts profit forecast on recent strong trading

Operating profit rose 33%, despite a $13m hit from the strikes in May and June

Etihad-backed Aer Lingus lifts profit forecast on recent strong trading

Aer Lingus, the Irish airline part-owned by Abu Dhabi's Etihad Ariways, lifted its 2014 profit guidance, reinstating an earlier forecast six weeks after it downgraded it, saying recent trading trends would help it meet the target after all.

Aer Lingus said on Wednesday it once again expected 2014 operating profit to be at least in line with the €61.1 million ($81.9 million) it made last year.

The company in June downgraded that profit forecast by 10 to 20 percent, warning that industrial action by cabin crew had damaged its bookings for the next few months.

"We've placed a number of trading and marketing initiatives into the business which have successfully restored consumer confidence across our transatlantic, our Ireland to UK and our capital cities market," chief revenue officer Mike Rutter told reporters on a call.

In the second quarter, Aer Lingus said operating profit rose 33 percent to €38.7 million, despite a €10 million hit from the strikes in May and June.

The company said profits in the second quarter were boosted by a strong performance in its long haul division, where it carried 24.1 percent more passengers.

Aer Lingus's upwards revision of its annual profit guidance is in contrast to the story at some larger, European airlines.

Air France-KLM warned this month its 2014 profit could be as much as 12 percent lower than previously forecast, mainly due to overcapacity and weak prices, while Germany's Lufthansa last month lowered its profit targets for the next two years.

Etihad Airways, a 4.9 percent stakeholder in Aer Lingus, increased its stake in the Irish carrier twice in two weeks in March this year, fuelling speculation at the time that the Abu Dhabi operation would buy either the Irish Government’s 25.1 percent stake or Ryanair’s 30 percent holding.

However, Etihad CEO James Hogan ruled out increasing the company’s stake in Aer Lingus in the near future, having first invested in 2012.

“That's where we'll stay for now,” he said in May this year. “We have a very good relationship with Aer Lingus. We codeshare. We network. We codeshare over Dublin to places like Boston that we don't operate into.”

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