IAG airline soars back into profit
Anglo-Spanish carrier International Airlines Group, which comprises British Airways and Iberia, rebounded into profit during the first half, as it enticed more high-end travellers, the group said Friday.
Net profit hit 88 million euros ($126 million) in the six months to the end of June. That contrasted with a loss post tax of 352 million euros in the first half of 2010 on a pro-forma basis, IAG said in a results statement.
British Airways and Iberia merged earlier this year to slash their costs, as the global economic downturn and the rise of low-cost airlines resulted in steep losses for traditional carriers.
IAG said Friday that its revenues rallied 18 percent to 7.77 billion euros in the first half.
The group's earnings were also lifted by the absence of BA industrial action and volcanic ash cloud disruption, both of which helped spark large losses in the same period of last year.
However, IAG added that fuel costs surged 35 percent to 2.44 billion euros, as oil prices jumped. Jet fuel, or kerosene, is refined from crude.
The carrier also warned that it expected to take a hit of 90-100 million euros this year, as a result of the Japan disaster and ongoing turmoil in the Middle East and North Africa recion.
However, chief executive Willie Walsh said the group was on track to deliver "significant" profit growth and synergies this year, and noted that there had been "continued strength" in the market for premium air travel.
"We are already making cost savings through joint procurement in areas such as insurance and airport handling. We have established a single cargo business and introduced integrated sales and airport teams in several key markets."
He added: "Customers are also directly benefiting through airline website cross-selling, more fare and schedule choice on overlapping longhaul routes and easier access to more destinations via new codeshares."
As a result of their merger, BA and Iberia expect to save about 400 million euros per year by 2016. Under the new IAG umbrella group, both carriers retain their current operations and individual brands.
Carrying about 60 million passengers a year, IAG is Europe's second biggest airline by market value behind Lufthansa of Germany.
© 2011 AFP