Aer Lingus 2011 Annual Report Download - page 10

Annual Report 2011
OPERATING AND FINANCIAL REVIEW Aer Lingus Group Plc
Progress achieved: The introduction of the “Great care. Great fare.”
tagline was a key customer relations event in 2011. The tagline first
and foremost promotes the feeling of great care that customers
experience when travelling with us, and then reassures customers with
a great fare proposition. This new tagline replaced ‘Enjoy Your Flight’
on all communications.
Key performance indicators: Aer Lingus continues to score very
positively in customer satisfaction ratings. The Aer Lingus Customer
Satisfaction survey takes into account feedback from approximately
2,500 customers each quarter. Based on the last quarter results (i.e.
Q4 2011), our commitment to “Great Care. Great Fare.” is evident in
the scores achieved. On average, 8 in 10 customers claim to be ‘very
satisfied’ with their last flight and with the performance of all staff. In
addition, an average of 7 in 10 are ‘satisfied to very satisfied’ with the
total price of their flight. Testament to these positive experiences, on
average, 9 in 10 customers would fly with us again based on their last
flight and would also recommend Aer Lingus to their family, friends or
colleagues.
2012 target: Aer Lingus serves central airports through congested
airspace. Although we perform well in several areas (e.g. we are one of
the most punctual airlines flying from London Heathrow), there is more
we can do to improve our overall on time performance, particularly in
the peak summer months.
Better matching of capacity to demand
Network management
2011 priority: To continue to apply a disciplined, demand led
approach to network design in order to maximise margin for the
business. Our target was to maintain a broadly stable year-on-year
annual capacity deployment with increases in ASKs only to reflect the
non-recurrence of the ash cloud and severe weather disruptions which
occurred in 2010, together with some tactical network and schedule
changes.
Progress achieved: During the year, we offset weaker Irish demand by
focussing on better performing inbound markets in Northern Europe.
We adjusted our network to provide more capacity on routes to high
performance, time sensitive markets such as Benelux, Switzerland and
Germany. The Group also benefited in 2011 from actions taken in
2010 including a lower level of low seasonal long haul flying from
Shannon and reductions in London Gatwick operations.
Key performance indicators: In 2011, Aer Lingus gained more exposure
toward better performing European markets in order to compensate for
difficult conditions in the Irish market. Approximately 47% of
passenger bookings are now sourced outside of Ireland. In addition,
inter-line traffic (i.e. passenger traffic sourced from other airlines) has
steadily increased since 2009 indicating that the Group is successfully
using its relationships with partners such as Aer Arann, British Airways,
Air France-KLM, United Airlines and JetBlue to drive passenger growth
through the core Aer Lingus network.
In addition, both the Group’s long haul and short haul networks
continue to be profitable. This is a significant improvement on the
situation in 2009 when long haul was significantly loss making and
short haul broke even.
Capacity deployment in 2011, as measured by ASKs, increased by
1.8% compared to prior year. The absence of severe ash cloud and
weather related disruptions led to increased capacity deployment.
However, this increase was partially offset by capacity lost due to the
IMPACT cabin crew dispute in early 2011, an earlier than anticipated
disposal of a long haul A330 aircraft, reduced capacity at London
Gatwick and Shannon as well as some changes to the Group’s
transatlantic schedule to and from Dublin.
Overall, Aer Lingus succeeded in keeping load factors stable while
increasing average yield. This was the key driver of revenue
performance in 2011.
2012 target: Aer Lingus will continue its disciplined approach to
capacity deployment in 2012. The Group will keep capacity flat in
2012 compared to 2011 but will nonetheless seek to drive modest
increases in traffic volumes in 2012 through adjustments to frequencies
and schedules to better match capacity to latent demand.
Fleet management
2011 priority: To maintain an appropriate fleet composition in order to
serve our markets cost effectively and flexibly. The Group also aims to
maintain a balance between owned and operating leased fleet in order
to have the ability to expand or reduce the fleet in response to the
evolving demand environment.
Progress achieved: Aer Lingus took several actions during the year to
augment our current fleet of modern, economically efficient A320 and
A330 aircraft. The Group took delivery of four new A320, finance
leased, short haul aircraft and disposed of one older A330 long haul
aircraft during 2011. Aer Lingus also exercised an option with Airbus to
defer an order for three A330 aircraft which were originally scheduled
for delivery in 2013 and 2014, to no earlier than 2018. Separately, Aer
Lingus expects to take delivery of 3 A350 aircraft no earlier than 2015.
Passenger traffic 2009 2010 Growth 2011 Growth
trends vs. prior vs. prior
year % year %
Inter-line revenues 44.5 55.1 23.8% 60.5 9.8%
(¤m)
1
Inter-line passengers 629 693 10.2% 789 13.9%
numbers (‘000s)
1
Bookings sourced 56% 55% (1.8%) 53% (3.6%)
inside Ireland
Bookings sourced 44% 45% 2.3% 47% 4.4%
outside Ireland
1
Excludes intra Aer Lingus network transfers.
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