Irish airline Aer Lingus reported a sharp fall in first-half profit on Thursday due to higher costs, but said increased capacity and strong summer trading would help it achieve full-year growth targets.
The former state carrier said intense competition and a 28% rise in fuel costs had weighed on its results.
However, it reiterated its previous outlook for mid-teen percentage growth in operating profit for the full year.
"Early indications of our performance in the second six months of the year are encouraging," Chief Executive Dermot Mannion said in a statement.
The airline, which makes most of its money in the second half, said operating profit fell 8 million euros to 2.6 million ($3.53 million) in the six months to end-June -- slightly ahead of an average forecast of 1.2 million euros ($1.63 million) given by four analysts polled by Reuters.
Revenue rose 12.9% to 574 million euros, while capacity was up by 8.3% and passenger numbers by 5.9%. Average fares were up 2.7% in its short-haul operations and 10.2% in long-haul.
Mannion said the airline had achieved a solid performance in a market where planned capacity from competitors, which include Irish low-cost giant Ryanair, had risen 45% on short-haul routes in the period.
Strong Irish Demand
Aer Lingus, which was floated on the London and Dublin stock markets last year, said it had taken charge of two new long-haul and two new short-haul aircraft which would add to capacity in the second half.
Shares in Aer Lingus were up 1.4% on a Dublin market up 1.3% overall.
Goodbody Stockbrokers analyst Joe Gill said the first-half results were relatively unimportant.
"The main message from the results is the unchanged guidance for the full year which means we're going to get EBIT growth of about 15%," he said.
"The good things evident in the first half is that passenger turnover has been quite strong, rising by 4.2% in scheduled sales and on ancillary sales they're up 60% on a per passenger basis."
Aer Lingus said growth in income from additional services had been boosted by a number of new initiatives including a new insurance offering and short-haul bag charges.