BA / Iberia report smaller loss
06.05.11
British Airways and Iberia's new parent company, International Airlines Group (IAG), has reported lower losses in the first quarter of this year than the airlines suffered last year in its first results since the merger in January. The newly-created group reported losses of €47 million in the first quarter, down from €273 million a year ago due to a 15.4% increase in revenue, thanks to increased capacity and strong sales in premium cabins, and despite a rise in fuel costs.
IAG chief executive Willie Walsh. said: ‘These are the first ever IAG results and they show an improved performance compared to last year. Revenue is up due to increased volumes, particularly in the premium cabins, and improved yields which also showed good premium growth. However, fuel costs remain the big challenge facing the industry. We have seen a 31% rise in the quarter. On a unit cost basis, fuel is up 20.1%.’
He said the group had been able to increase capacity without additional aircraft and employees ‘highlighting the good work that has been done in previous years’. Looking ahead, he said the group expects significant growth in operating profit this year, adding: ‘Our long haul business is stable, with strength in the premium sector, but the short haul European market remains highly competitive.'
He said total fuel cost for the year is expected to be approximately €5.2 billion, or €100 million worse than IAG's previous forecast last quarter, adding: ‘Although we achieved 50% recovery of the fuel cost impact in quarter one through revenue initiatives, it should be noted that this task becomes progressively harder through the year as we face tougher revenue comparables with last year.’
Looking at BA individually, the airline's net profit was €60 million, compared to last year's loss of €203 million. Last years figures included the effects of 22 days of strike action by cabin crew staff.
Separately, IAG announced that for the month of April, traffic rose 24.9% from last year and capacity grew 22.2%. Premium traffic for April grew 40%, with 22.6% growth in non-premium traffic. Last year's figures were affected by the six day shutdown of European airspace as a result of the volcanic ash cloud.
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