8th Nov 2013 09:19
LONDON (Alliance News) - International Consolidated Airlines Group PLC, the parent company of British Airways and Spain's Iberia, Friday reported a jump in profits and revenues for the first nine months of the year, buoyed by its acquisition of Spanish carrier Vueling and as its turnaround of Iberia started paying off.
Operating profits rose strongly at Iberia, where the company is cutting costs heavily, and also at British Airways, thanks to strong demand for trans-Atlantic flights.
The airline, like peers, was hit hard by the economic downturn, but the company has benefitted from a continuing restructuring of Iberia as it tries to bring its operating expenses in line with those of British Airways. It added Spanish low-cost carrier Vueling to its stable earlier this year.
It reported an operating profit of EUR348 million for the nine months to end-September, up from just EUR9 million a year earlier as revenues rose to EUR14.11 billion, from EUR13.59 billion. Profit after tax rose to EUR77 million, from EUR57 million. Operating profit excluding exceptional items was EUR657 million, up from EUR17 million.
In the third quarter, operating profit rose to EUR693 million, from EUR263 million as revenues grew to EUR5.41 billion, from EUR5.06 billion.
"Iberia made an operating profit of EUR74 million in the quarter compared to an operating profit of EUR1 million last year. This is an improved performance, bearing in mind it's the strongest quarter of the year. However, the airline must continue to implement its restructuring plan and reach agreement on productivity changes to bring about long term sustainable profits and growth," IAG Chief Executive Willie Walsh said in a statement.
British Airways' operating profit rose to EUR477 million in the third quarter, from EUR268 million, as demand for trans-Atlantic flights was strong. It also said it had made EUR100 million more than last year because the 2012 London Olympics had hit profits, keeping travellers at home during one of the airline's most busy periods.
Vueling, which is based in Barcelona, reported an operating profit of EUR139 million.
IAG gave a full-year forecast for the first time, predicting that operating profit excluding exceptional items will be around EUR740 million. Current trading is in line with its expectations, it added.
Its being helped by a fall in fuel costs, with costs down 3.4% for the nine month period to EUR4.48 billion.
Separately, the company said its traffic, measured in revenue passenger kilometres, rose 8.9% in October, again buoyed by the addition of Vueling. Capacity, measured in available seat kilometres rose 8%.
Premium traffic, which includes passengers flying in First Class, rose 4% even though premium capacity was down.
In total, it carried 6.3 million passengers in October, up from 4.9 million a year earlier.
By Steve McGrath; [email protected]; @SteveMcGrath1
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