Aer Lingus warns of bigger losses

Aer Lingus has been hit hard by the downturn in global travel

Irish airline Aer Lingus has warned that its 2009 losses will be more extensive than first feared after a sharp drop in first quarter revenues.

Aer Lingus, which parted with its former chief executive earlier this month, said revenues in January to March slumped 16% from a year before.

Passenger numbers during the first quarter fell 6.5% to two million.

The news saw shares in Aer Lingus fall as much as 20%. The firm said it was continuing with cost cutting measures.

'Severe deterioration'

Aer Lingus' former chief executive Dermot Mannion resigned on 6 April, saying the airline needed fresh ideas.

Mr Mannion left the firm earlier this month

The firm's chairman Colm Barrington has now also taken on the chief executive role.

He said the airline was struggling "against the backdrop of a severe deterioration in operating conditions", but that it was "resolute in its objective of reducing operating costs and retaining a strong capital structure".

In January it rejected the latest hostile takeover approach from Irish rival Ryanair, saying it undervalued the company.

Some airline analysts say it is now increasingly unlikely that Aer Lingus will be able to maintain its independence in the longer term, and that even if it continues to reject Ryanair's approaches it will have to find another buyer.

"At this point of time, it's hard to see Aer Lingus being a standalone operation, said Davy analyst Stephen Furlong.