Aer Lingus 2011 Annual Report Download

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Annual Report 2011

Table of contents

  • Page 1
    Annual Report 2011

  • Page 2
    ... Chief executive officer's review Operating and financial review Principal risks and uncertainties Board of directors Executive management team Safety and security statement Corporate social responsibility statement Directors' report Report of the remuneration committee on directors' remuneration...

  • Page 3
    ...HIGHLIGHTS Aer Lingus Group Plc FINANCIAL HIGHLIGHTS For the year ended 31 December 2011 2011 Results Revenue EBITDAR 1 Operating profit before net exceptional items Net exceptional items Operating profit after net exceptional items Net finance (expense)/income Income tax (charge)/credit Profit for...

  • Page 4
    ... impact on both the way we operate and on our operating costs. Our 2011 pre tax profit was ¤84.4 million (2010: ¤27.3 million) as a result of several exceptional credits, particularly the surrender of the lease on our head office building, and no major exceptional costs. 2 Annual Report 2011

  • Page 5
    ... the Directors recognise their accountability to the Company's shareholders in this regard. The Group therefore applies the UK Corporate Governance Code (June 2010) published by the Financial Reporting Council in the UK and the Irish Corporate Governance Annex published by the Irish Stock Exchange...

  • Page 6
    ...in our financial statements, including attractive slots at London Heathrow, New York JFK and Dublin airports as well as a well recognised and admired brand. Aer Lingus benefits from a modern, cost efficient fleet of Airbus aircraft and an experienced management team supported by a dedicated group of...

  • Page 7
    ...'S REVIEW Aer Lingus Group Plc CHIEF EXECUTIVE OFFICER'S REVIEW Dear Fellow Shareholders, 2011 was a momentous year for Aer Lingus during which we collectively took important and necessary steps in order to secure the turnaround achieved since 2009 and to continue to deliver great passenger care...

  • Page 8
    ... continue to meet the excellent standards being achieved at present. Christoph Mueller Chief Executive Officer 29 March 2012 Aer Lingus will need to address other issues in 2012. For example, our fixed cost base is under-utilised. There is also scope to improve staff engagement for the benefit of...

  • Page 9
    ... REVIEW Aer Lingus Group Plc OPERATING AND FINANCIAL REVIEW Market review Following a relatively benign 2010, the European airline industry experienced a more difficult year in 2011. Air passenger demand during 2011 remained unsettled reflecting unease caused by several European governments...

  • Page 10
    ... 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...

  • Page 11
    ... of A350 long haul aircraft from 2015. Short haul Long haul Flex • Enables Aer Lingus to compete on value. • Provides passengers with a modular product offering including checked bag, free advance seat selection & Gold Circle points. • Enables Aer Lingus to target time sensitive passengers...

  • Page 12
    ...Staff Non-staff Total Unit cost per ASK progression is set out below and highlights the continuing cost challenges faced by the business: euro cent Operating cost per ASK incl. fuel 2009 6.06 2010 6.37 2011 6.66 2012 target: The Group continues to explore new cost saving initiatives and to target...

  • Page 13
    ... higher than in 2011 as the cost of protection adjusts to revised market expectations about the future trajectory of fuel prices. Aer Lingus will need to address other issues in 2012. For example, the Group's fixed cost base is under-utilised and there is scope to improve staff engagement for the...

  • Page 14
    ... portfolio at London Heathrow, JFK and Dublin airports and a globally recognised brand. Update on capital reduction The Board regularly reviews the Aer Lingus statement of financial position with a view to improving flexibility for the future. As part of this process, Aer Lingus Group plc sought and...

  • Page 15
    ... 2009 under the auspices of the LRC, Aer Lingus and the Irish Airlines Pilots Association agreed to certain changes to the scheme with the aim of addressing the deficit over time. The changes included an increase in retirement age from 55 to 60, a reduction in accrual rate for future service from...

  • Page 16
    OPERATING AND FINANCIAL REVIEW Aer Lingus Group Plc 2011 FINANCIAL REVIEW Please note that the 2010 comparatives have been restated following a voluntary change in accounting policy adopted during 2011 and applied retrospectively related to IAS 19 "employee benefits". Following the change, ...

  • Page 17
    ... offering in 2011 in order to improve the return from the existing discretionary retail offering and to align this offering more closely with customer demand. Aer Lingus successfully re-launched its pay-to-use lounge access product, initiated an improved advance seat selection option for passengers...

  • Page 18
    ...leasehold interest in our Head Office Building to the DAA plc. Net exceptional items also includes a release of amounts from cash flow hedging reserve related to capital foreign exchange hedges originally associated with planned purchase of three A330 aircraft and exercise in Q1 2011 of an option to...

  • Page 19
    ... of approximately ¤40 million and ¤42 million expected in 2012 and 2013, respectively. Fleet The Group took delivery of four new A320, finance leased, short haul aircraft and disposed of one older A330 long haul aircraft during the year. Aer Lingus also exercised an option with Airbus to defer an...

  • Page 20
    ... management time and effort in fostering these relationships. Were the alliances to become "exclusive" in the future, Aer Lingus could seek membership of one of them, but would need to weigh the revenue benefits that would accrue against the costs of membership. Mitigation The Board reviews booking...

  • Page 21
    ... from time to time prove difficult to reach agreement on certain issues. Cost recovery The group operates in an extremely competitive market. The core Irish market is very price sensitive, with a substantial majority of passengers travelling for leisure or family reasons. Fuel and airport charges...

  • Page 22
    ... of passenger bookings and yield management could adversely impact revenue generation and financial performance. In addition, Aer Lingus has identified the need to upgrade important parts of its core revenue management, passenger management and staff rostering system and also to upgrade its data...

  • Page 23
    ... performed by the trustee's actuary showed an MFS deficit at 31 March 2009 of ¤217m. As part of the Greenfield agreements negotiated in late 2009 under the auspices of the LRC, Aer Lingus and the Irish Airlines Pilots Association agreed certain changes to the Mitigation Annual Report 2011...

  • Page 24
    PRINCIPAL RISKS AND UNCERTAINTIES Aer Lingus Group Plc Risk Pensions (Continued) Impact scheme with the aim of addressing the deficit over time. The changes included an increase in retirement age from 55 to 60, a reduction in accrual rate for future service from 45ths to 60ths and an increase in ...

  • Page 25
    ... exposed to systemic risks affecting the Eurozone and its members, including Ireland in particular. Financial Details of the principal financial risks to which the Group is exposed, and the approach to mitigating them, are set out in Note 3 to the financial statements. Annual Report 2011 23

  • Page 26
    ..., Irish based aircraft leasing company. He was formerly Managing Director of Babcock & Brown in Dublin from 1994 to 2007. Prior to that he held a number of senior executive management positions in GPA Group Plc from 1979 to 1993 and was appointed President of GE Capital Aviation Services Limited...

  • Page 27
    ...of the financial and performance fundamentals of UK listed companies and those in the transport sector make her ideally suited for membership of both the Audit and Remuneration Committees. Nicola has served as a member of the Audit and Remuneration Committees since June 2010. Annual Report 2011 25

  • Page 28
    ... of Ireland (2001-2006), Michael was a key member of the senior management team and was central to the alignment of the Group's HR strategy with the Group's business strategy, as well as the implementation of a number of major change initiatives. Michael was subsequently Chief Executive, Alternative...

  • Page 29
    ... STATEMENT Aer Lingus Group Plc SAFETY AND SECURITY STATEMENT Aer Lingus Safety Management System Safety is a corporate value of Aer Lingus and we are committed to maintaining a safe, healthy and sustainable working environment wherever we operate - for our staff, our customers and the public...

  • Page 30
    ... departments on development of health and safety and manages incident reporting and occupational accident investigation procedures. It is Aer Lingus policy to have as a constant objective the creation and maintenance of a safe working environment for its staff and the Group has a Safety Statement...

  • Page 31
    ...' lives and work. In order to recognise the diverse needs of employees, and to ensure fairness and consistency across the Group, Aer Lingus has a flexible working policy. The objective of this policy is to help staff achieve a healthier balance between their working lives and personal responsibility...

  • Page 32
    ... SOCIAL RESPONSIBILITY STATEMENT Aer Lingus Group Plc Supporting Irish Based Charities Each year Aer Lingus supports a large number of Irish based charities. We assist charities raising money for initiatives in their local communities and by assisting volunteers travelling to developing countries...

  • Page 33
    ... of the company. Accounting policies Information on the key performance indicators applicable to the Group are detailed in the Financial Highlights on page 1, the Chairman's Statement on pages 2 to 4, the Chief Executive Officer's Review on pages 5 to 6 and in the Operating and Financial Review on...

  • Page 34
    ... in relation to the Group's business. During the year ended 31 December 2011, the Company Secretary (Mr Donal Moriarty) was granted a conditional award of 100,000 The Directors are responsible for keeping proper books of account that disclose with reasonable accuracy at any time the financial...

  • Page 35
    .... Corporate Governance Statement- Year ended 31 December 2011 The Report of the Remuneration Committee on Directors' Remuneration is set out on pages 45 to 52. The Directors' Corporate Social Responsibility Statement is set out on pages 29 to 30. Subsidiary companies Details of the Group companies...

  • Page 36
    DIRECTORS' REPORT Aer Lingus Group Plc Directors' Report (continued) Under Statutory Instrument 450/2009 European Communities (Directive 2006/46/EC) Regulations 2009 and the Listing Rules of the Irish Stock Exchange (ISE), the Directors are required in this statement to describe how the principles...

  • Page 37
    ... Mr David Begg in January 2011. The Chairman and the Company Secretary work closely together in planning a forward programme of Board meetings and establishing their agendas. During 2011, the Chairman ensured that the Board was supplied in a timely manner with information in a form and of a quality...

  • Page 38
    ... the pre-scheduled Board meetings in 2011. For regular Board meetings, the agenda will usually comprise of reports from the Chief Executive Officer, Chief Financial Officer and executive management. The practice is to have the agenda and supporting papers circulated to the Directors seven days ahead...

  • Page 39
    ... Instrument 220/2010 European Communities (Statutory Audits) (Directive 2006/43/EC) Regulations 2010, including: • to monitor the statutory audit of the annual and consolidated accounts and the financial reporting process; • to monitor the integrity of the financial statements of the Company and...

  • Page 40
    ...of Annual General Meeting including the statement on dividend policy, which was published on 4 April 2011; • the Audit Committee jointly conducted (with the Risk Committee), an annual review of Aer Lingus' system of internal financial control and risk management systems and reported to the Board...

  • Page 41
    ... and determine targets for, any performance-related pay schemes operated by the Company and approve the total annual payments made under such schemes; and (d) to monitor and approve the total remuneration package of the Chairman, each executive Director and relevant senior management members, within...

  • Page 42
    ...the Audit Committee), an annual review of Aer Lingus' system of internal financial control and risk management systems and reported to the Board in this regard; • the Risk Committee reviewed and approved the Company's Corporate Risk Assessment Process for 2011 and reported to the Audit Committee...

  • Page 43
    ... and corporate governance board of Directors approval of all major strategic decisions; clearly defined process and information system for controlling capital expenditure including use of appropriate authorisation levels; long term business plan; detailed annual budget process, with budget reviewed...

  • Page 44
    ... Board; comprehensive system of internal financial reporting which includes preparation of detailed financial statements and key performance indicators on a monthly basis and the preparation of the year end consolidated financial statements; management, consider that the system operated effectively...

  • Page 45
    DIRECTORS' REPORT Aer Lingus Group Plc Directors' Report (continued) General meetings The Company's Annual General Meeting (AGM), which is held in Ireland, affords individual shareholders the opportunity to question the Chairman and the Board. It is the Company's policy for all Directors to attend...

  • Page 46
    ...' REPORT Aer Lingus Group Plc Directors' Report (continued) The Group has signed an agreement with Dublin Airport Authority plc (the "DAA") for hangarage at Dublin Airport, under which one of the requirements of the DAA is that the agreement may be terminated by the DAA if a change in control...

  • Page 47
    ...million by the end of 2011. Aer Lingus also delivered improved performance in respect of a range of non-financial metrics which are central to the Group's business strategy and consistent with the new Aer Lingus motto 'Great Care, Great Fare'. These metrics include improved customer satisfaction and...

  • Page 48
    ... against annual performance related pay scheme targets for 2010 for executive directors and other senior managers; assessed and agreed the level of achievement against Greenfield cost Reduction Program target for 2010 for employee gainsharing incentives; reviewed and approved the 2011 share award...

  • Page 49
    ...). Executive directors are not required to defer their annual bonuses or convert them into shares. 2011 Transformational Performance Scheme As indicated in the Remuneration Report for the 2010 financial year, the Group introduced a special short-term bonus opportunity in 2011 to support the Company...

  • Page 50
    ... OF THE REMUNERATION COMMITTEE ON DIRECTORS' REMUNERATION Aer Lingus Group Plc Report of the Remuneration Committee on Directors' Remuneration (continued) executives and 40% and 30%, respectively for the other two categories of senior management. The 2012 annual performance-related plan will be...

  • Page 51
    ... share award and the share option grant were disclosed in the Remuneration Reports contained in the 2009 and 2010 annual reports, with each such Remuneration Report being approved by shareholders at annual general meeting. Throughout the year ended 31 December 2011, non-executive directors' fees...

  • Page 52
    ...ON DIRECTORS' REMUNERATION Aer Lingus Group Plc Report of the Remuneration Committee on Directors' Remuneration (continued) Audited Information The information on pages 50 to 52 forms part of the financial statements. Table 2.1 Individual Directors' remuneration for the year ended 31 December 2011...

  • Page 53
    ... OF THE REMUNERATION COMMITTEE ON DIRECTORS' REMUNERATION Aer Lingus Group Plc Report of the Remuneration Committee on Directors' Remuneration (continued) Table 2.2 Interest of Directors in office at 31 December 2011 in the shares of the Group 31 December 2011 Number of shares Colm Barrington...

  • Page 54
    ... OF THE REMUNERATION COMMITTEE ON DIRECTORS' REMUNERATION Aer Lingus Group Plc Report of the Remuneration Committee on Directors' Remuneration (continued) Table 2.3 Share Options As at 31 December 2011 and subject to achieving the closing market share prices (as set out in the third column) below...

  • Page 55
    ... the directors' report of the main features of the internal control and risk management systems in relation to the process for preparing the consolidated financial statements is consistent with the consolidated financial statements. In addition, we review whether the Corporate Our responsibility is...

  • Page 56
    ... in the financial statements. In our opinion the information given in the directors' report is consistent with the financial statements and the description in the Corporate Governance Statement of the main features of the internal control and risk management systems in relation to the process for...

  • Page 57
    FINANCIAL STATEMENTS Aer Lingus Group Plc CONSOLIDATED INCOME STATEMENT Year ended 31 December Note 2 01 1 2010 As restated ¤ '000 ¤'000 Rev e nu e 6 1,288 ,309 1,215,572 Oper a ti ng ex pens es (bef ore n et exc ept ion al it em s ) Staff costs Depreciation and amortisation Aircraft ...

  • Page 58
    FINANCIAL STATEMENTS Aer Lingus Group Plc CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended 31 December Note 2 01 1 2010 As restated ¤ '000 ¤'000 Profit f or the year 7 1, 19 4 43,033 Other comp rehens iv e in com e Available-for-sale reserve - Amortisation of available-for-sale ...

  • Page 59
    ... Capital redemption reserve fund Other reserves Retained earnings Total equity LI AB IL I TIE S Non-current liabilities Finance lease obligations Derivative financial instruments Post employment benefit obligations Provisions for other liabilities and charges Cur re nt l iab ilitie s Trade and other...

  • Page 60
    ... in accordance with IFRS is a profit of ¤0.1m (2010: Profit of ¤26.1m). The notes on pages 63 to 115 form an integral part of these financial statements. An dre w Ma cfa rla ne DIRECTOR Chr istoph Mueller DIRECTOR Approved by the Board of Directors on 29 March 2012. 58 Annual Report 2011

  • Page 61
    ...(72,789) (39,680) 31,514 3,199 (400) 836,721 Total comprehensive income/(loss) Exercise of LTIP awards Share based payment reserve Deferred tax impact B a lan c e a t 3 1 De c e m b er 2 01 1 The notes on pages 63 to 115 form an integral part of these financial statements. Annual Report 2011 59

  • Page 62
    FINANCIAL STATEMENTS Aer Lingus Group Plc COMPANY STATEMENT OF CHANGES IN EQUITY C all ed-up share ca ...Profit for the year ended 31 December 2010 Total comprehensive income for the year B al anc e a t 3 1 D e c em b e r 2 0 1 0 Profit for the year ended 31 December 2011 Total comprehensive income...

  • Page 63
    FINANCIAL STATEMENTS Aer Lingus Group Plc CONSOLIDATED STATEMENT OF CASH FLOWS Year ended 31 December Note 2 01 1 2010 As restated ¤ '000 Ca sh f low s fr om oper a ti ng a ct ivi ti es Income tax paid Net cash generated from operations 34 8 7, 61 8 8 7, 61 8 ¤'000 46,515 (16) 46,499 Ca sh f low...

  • Page 64
    FINANCIAL STATEMENTS Aer Lingus Group Plc COMPANY STATEMENT OF CASH FLOWS Year ended 31 December Note Ca sh f low s fr om oper a ti ng a ct ivi ti es Net cash generated from operations Ca sh f low s fr om in ves t ing act iv it ies Investment in share capital of subsidiaries Net cash used in ...

  • Page 65
    ...information Aer Lingus Group plc ("the Company") and its subsidiaries (together "the Group") operates as an Irish airline primarily providing passenger and cargo transportation services from Ireland to the UK and Europe ("short haul") and also to the US ("long haul"). The Company is a public limited...

  • Page 66
    ...befor e n et except iona l it ems) Staff costs Depreciation and amortisation Aircraft operating lease costs Fuel costs Maintenance expenses Airport charges En-route charges Distribution charges Ground operations, catering and other operating costs Other (gains)/losses - net 266,404 79,808 43,909 288...

  • Page 67
    ...befor e n et except iona l it ems) Staff costs Depreciation and amortisation Aircraft operating lease costs Fuel costs Maintenance expenses Airport charges En-route charges Distribution charges Ground operations, catering and other operating costs Other (gains)/losses - net 258,892 87,444 51,579 266...

  • Page 68
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) This change in accounting policy also impacted on the consolidated statement of changes in equity. The impact of those changes is shown below: 2 01 1 ¤'000 Per previo us a cc ou nt i n g p o l i ...

  • Page 69
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) The impacts of these reclassifications on the Group's 31/12/2010 and 01/01/2010 consolidated statement of financial position are set out below: 31/1 2/201 0 As rep or ted ¤ '000 Non- Cur re nt A ...

  • Page 70
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) The following new standards, amendments to existing standards and interpretations are mandatory for the first time for the financial year beginning 1 January 2011 IFRIC 19 Extinguishing financial ...

  • Page 71
    ... asset transferred. The financial statements of all subsidiaries are drawn up to the year ended 31 December. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. 2.3 Segment reporting Operating segments are reported in...

  • Page 72
    ... using the straight-line method to allocate their cost to their residual values over their estimated useful lives as follows: Use ful lives Flight e quipm e nt Aircraft fleet and major spares 2 - short haul aircraft - long haul aircraft Rotable spares Modifications to leased aircraft Pr ope rt...

  • Page 73
    ... and sales of financial assets are recognised on the trade-date, the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transactions costs for all financial assets not carried at fair value through profit or loss. Financial assets...

  • Page 74
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) 2.10 Impairment of financial assets Assets carried at amortised cost The Group assesses at the end of each reporting period whether there is objective evidence that a financial asset or group of ...

  • Page 75
    ... operating, catering and other operating costs'. When a trade receivable is uncollectible, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against the same account in the income statement. Annual Report 2011...

  • Page 76
    ... income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. 74 Annual Report 2011

  • Page 77
    ...recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity. The proceeds received, net of any directly attributable transaction costs, are credited to share capital (nominal value) and share premium. Annual Report 2011 75

  • Page 78
    ... the statement of financial position date is included in 'trade and other payables' under the caption of 'ticket sales in advance'. Expired tickets are recognised as revenue using estimates regarding the timing of recognition based on historical trends. Fees charged for any changes to flight tickets...

  • Page 79
    ...'s work in relation to foreign exchange rate risk relates to the management of the Group's cashflow exposures. Significant currency exposures are managed for the current and future financial years on a selective hedging basis. The dollar deficit arises because the dollar costs for fuel and aircraft...

  • Page 80
    ... rates based on net surplus cash throughout 2011 would reduce profits by ¤3.6m (2010: ¤3.9m). (iii) Commodity price risk The Group's fuel requirements expose the Group to the market volatility of jet fuel prices. The Group is subject to jet fuel price risk resulting from its operating activities...

  • Page 81
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) (c) Liquidity risk The principal policy objective in relation to liquidity is to ensure that the Group has access at minimum cost, to sufficient liquidity to enable it to meet its obligations as ...

  • Page 82
    ...statement of financial position with a view to improving flexibility for the future. As part of this process, Aer Lingus Group plc sought and received shareholder approval to increase its distributable reserves by means of a capital reduction in an Extraordinary General Meeting held in November 2011...

  • Page 83
    ... exchange rates at the statement of financial position date, with the resulting value discounted back to present value The fair value of fuel price swaps is determined using forward fuel prices at the reporting date, with the resulting value discounted back to present value. 4 Critical accounting...

  • Page 84
    ... significant judgment. The main deferred tax asset recognised by the Group relates to unused tax losses. The directors assess the recoverability of tax losses by reference to future profitability and tax planning, including fleet management decisions. (f) Share based payments The determination of...

  • Page 85
    ... the Group to benefit from an integrated revenue pricing and route network. The Group's flight equipment is deployed through a single route scheduling system. When making resource allocation decisions, the chief operating decision maker evaluates flight profitability data, which considers passengers...

  • Page 86
    ... Operating lease rentals payables - plant and machinery - aircraft - property Auditors' remuneration - Group (excluding Company) - audit fee - other assurance services - tax advisory services - other non audit services Total auditors' remuneration - Group Auditors' remuneration - Company - audit fee...

  • Page 87
    ... as held for sale on the statement of financial position. The 2010 credit relates to the profit on disposal of an owned A320 series aircraft. (c) The 2011 amount relates to professional fees in respect of the 2010 once-off payment to the Aer Lingus Employee Share Ownership Trust ("ESOT") to fully...

  • Page 88
    ...549 1 7, 33 0 15,613 1,622 17,235 11 Employee Benefits The average number of persons (Full Time Equivalents) employed by the Group in the financial year was 3,491 (2010: 3,516) split as follows: 2 01 1 2010 Operations and administration Sales and marketing 3, 443 48 3, 491 3,466 50 3,516 Their...

  • Page 89
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) 12 Income tax (i) Income tax charge/(credit) recognised in the income statement 2 01 1 ¤ '000 Current ta xa tion Irish corporation tax Remeasurement of income tax provisions 2010 ¤'000 D e fe ...

  • Page 90
    ... of the cash generating unit in question. 1 The impairment charge of ¤3.2m recorded during the year relates to the write down of one owned A320 aircraft held for sale to its fair value less costs of sale. This write down has been recorded within net exceptional items. 88 Annual Report 2011

  • Page 91
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) Finance lease obligations are secured on flight equipment with a net book value of ¤601.2m (2010: ¤540.9m) (Note 24) Reco ncil ia tio n of depr ecia t ion cha r ge 2 01 1 ¤ '000 2010 ¤'000 ...

  • Page 92
    ... haul fleet capacity. This aircraft is grounded and is being actively marketed. 17 Group undertakings Aer Lingus Group plc is a company incorporated under the Irish Companies Acts, 1963 to 2009. Its head office is at Dublin Airport, Co. Dublin, Ireland. It is the ultimate parent company in the Aer...

  • Page 93
    ... from the available-for-sale reserve to the income statement in the period. The effective interest rates of the financial assets reclassified into loans and receivable at the date of reclassification were between 2.8% and 4.5%. The estimated undiscounted cash flows that the Group expected to recover...

  • Page 94
    ... tonnes or aircraft fuel (2010: 333,304 metric tonnes). The maximum exposure to credit risk at the reporting date is the fair value of the derivative assets in the statement of financial position. A credit for ineffectiveness of ¤0.04m is reflected in the income statement in 2011 (2010: charge...

  • Page 95
    ... exposure to credit risk at the reporting date is the carrying value of each class of receivable mentioned above. The Group does not hold any collateral as security. At 31 December 2011, trade and other receivables of ¤4.5m (2010: ¤4.1m) were past due but not impaired. They relate to a number of...

  • Page 96
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) The carrying amounts of the Group's trade and other receivables are denominated in the following currencies: 2 01 1 ¤ '000 Euro US dollar Sterling Other currencies 5 4, 12 6 3 7, 70 4 3, 787 3 82 ...

  • Page 97
    ... the period of the leases. Restricted deposits are also held to meet certain loan obligations. 23 Trade and other payables 2 01 1 2010 As restated ¤ '000 Trade payables Accruals and deferred income Ticket sales in advance, excluding taxes and charges Employment related taxes Other amounts payable...

  • Page 98
    ... currencies: 2 01 1 ¤ '000 Euro US dollar 2 0 1, 6 4 2 3 7 5, 5 9 5 5 7 7, 2 3 7 2010 ¤'000 122,702 412,529 535,231 The effective interest rates at the reporting date were as follows: 20 1 1 ¤ Finance lease obligations 3. 5% 20 11 $ 2 . 1% 2010 ¤ 3.8% 2010 $ 2.0% 96 Annual Report 2011

  • Page 99
    ...if those schemes are found to have insufficient funds to pay all members the benefits relating to their current or past service. The IASS is a multi-employer scheme with fixed contributions made by the employers and employees in accordance with the trust and deed rules. At 31 December 2011 it had 14...

  • Page 100
    ..., Aer Lingus and the Irish Airlines Pilots Association agreed certain changes to the scheme with the aim of addressing the deficit over time. The changes included an increase in retirement age from 55 to 60, a reduction in accrual rate for future service from 45ths to 60ths and an increase in member...

  • Page 101
    ... age of 65. Retirement benefits are reduced for service less than 20 years. The scheme has 119 members (2010: 130) with benefit accruals and plan participation frozen. The group also operates a non contributory defined benefit scheme in respect of two retired Irish executives. Annual Report 2011...

  • Page 102
    ...gains Employer contributions Benefits paid Taxes paid At 31 December The amounts recognised in the income statement are as follows: 2 01 1 ¤ '000 Interest cost - recognised in finance expense Expected return on plan assets - recognised in finance income Past service cost - recognised in staff costs...

  • Page 103
    ... as at the end of the reporting period. Expected returns on equity and property investments reflect long-term real rates of return experienced in the respective markets. Expected contributions to post-employment benefit plans for the year ending 31 December 2012 are ¤0.6m The group has agreed that...

  • Page 104
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) History of defined benefit obligations, assets and experience gains and losses: Financial year ending in 20 1 1 ¤'00 0 Defined benefit obligation Fair value of plan assets Deficit/(surplus) 14 ,4 ...

  • Page 105
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) The amounts recognised in the income statement are as follows: 2 01 1 ¤ '000 Current service cost - recognised in staff costs Interest cost - recognised in finance expense Total recognised in ...

  • Page 106
    ... negotiations. At 31/12/2011, the majority of the provision relates to the Greenfield cost reduction programme. Measurement uncertainty associated with business repositioning provisions arise from the achievement of certain operating and financial targets and changes in human resources requirements...

  • Page 107
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) (3) Other Other provisions relate mainly to the frequent flyer programme and free flight entitlements in respect of former employees. The frequent flyer provision is utilised when points are used ...

  • Page 108
    ... assets Share based payment reserve 4, 943 17 (40 0) 4, 560 (6,949) 82 (111) (6,978) 2010 ¤'000 The Group continues to hold unutilised capital losses forward of ¤1.3m in respect of which no deferred tax asset is carried (2010: ¤15.2m). The Group is satisfied, based on expected future performance...

  • Page 109
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) In May 2009 5,690,969 shares were issued in respect of the Group's Long Term Incentive Plan (LTIP), for the vesting period ending 31 December 2011. In September 2009 the Company acquired 5,605,347 ...

  • Page 110
    ... London Heathrow Airport. If Aer Lingus proposes to dispose of any of the slots at London Heathrow that it was using in September 2006, it is required to notify shareholders in the manner set out in the Articles of Association, and shareholders representing 20% or more of the issued Ordinary Shares...

  • Page 111
    ... shares reserve comprises the weighted average cost of Aer Lingus Group plc ordinary shares held in order to fulfil award conditions under the LTIP share based performance award scheme. S har e b a s ed pa y me n t r es e r ve The reserve comprises amounts expensed in the Group Income Statement...

  • Page 112
    ... an annual basis at the discretion of the Remuneration Committee. Under the terms of the Group's LTIP an early vesting of an award may occur at the discretion of the Remuneration Committee if there were to be a change of control of the Company. As at the reporting date, 3,946,658 shares are in issue...

  • Page 113
    FINANCIAL STATEMENTS Aer Lingus Group Plc Notes to the consolidated financial statements (continued) Impact on income statement The total LTIP expense of ¤3.0m is analysed as follows: 2 01 1 ¤ '000 2010 Long Term Incentive Plan Staff costs 2011 Long Term Incentive Plan Staff costs Total 8 01 2, ...

  • Page 114
    ... shares will transfer in due course to non-Irish resident beneficiaries. The profit share obligation, established at the time of the Group's initial public offering in 2006, required the Group to pay an annual share of profits to the Aer Lingus Employee Share Ownership Trust ("ESOT" or the "Trust...

  • Page 115
    ... reporting date, there was a balance of ¤98,580 outstanding to Realex Payments from the Group (2010: ¤122,037). These amounts are recorded in trade payables. The Minister for Finance of Ireland holds 25.11% of the Group's issued share capital and is entitled to appoint three directors to the Board...

  • Page 116
    .... The Group collects Airport Departure Tax and various payroll taxes on behalf of the Irish Revenue Commissioners and is liable to Irish Corporation Tax on profits earned, and to employer's PRSI on its payroll. The Group accounts for VAT in Ireland. The Group sells seats on its scheduled services to...

  • Page 117
    ... product suite to Aer Arann. The EU emissions trading system ("EU ETS") became effective for Airlines from 1 January 2012. Under the EU ETS, all flights departing from and arriving at EU airports must pay for a portion of their carbon emissions. Aer Lingus has received free allowances amounting to...

  • Page 118
    SHAREHOLDER INFORMATION Aer Lingus Group Plc SHAREHOLDER INFORMATION (Unaudited) 2012 financial calendar Annual General Meeting 2012 H1 period ends 2012 H1 results 2012 FY ends 4 May 2012 30 June 2012 August 2012 31 December 2012 Share price data Share price movement during 2011 - High - Low Share...

  • Page 119
    ... relations For investor enquiries please contact: Declan Murphy T: +353 1 886 2228 E: [email protected] Jonathan Neilan FDK Capital Source T: +353 1 663 3686 E: [email protected] Company secretary Registered office and number Number: 211168 Dublin Airport Co. Dublin Ireland...

  • Page 120
    ...Aer Lingus Group Plc OPERATING AND FINANCIAL STATISTICS For the year ended 31 December 2011 20 1 1 Lo ng h a ul (1) 20 10 Change 2 00 9 2 00 8 20 0 7 Number of routes flown Number of sectors flown (flights) Average sector length (in kilometres) Number of passengers (in thousands) Average fare...

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    Great Care. Great Fare.