BA owner's profits soar after Aer Lingus deal
The owner of British Airways boosted profits on the back of its takeover of Aer Lingus, despite the effects of the Brussels terror attacks.
International Airlines Group (IAG) said its operating profit jumped more than five times to 155 million euro (£121 million) in the three months to the end of March compared with a year ago, boosted by the purchase of Irish flag carrier Aer Lingus completed last September.
The group, which also owns Iberia and Vueling airlines, beat City expectations of 145 million euro (£113 million) of operating profit and shot past last year’s 25 million euro (£19 million) outcome.
It said revenue in January and February was in line with last year, but in March sales were affected by the Brussels attacks and the timing of Easter.
IAG chief executive Willie Walsh added that the effect of the Brussels attacks had continued from the first quarter into the second quarter of the group’s year.
Mr Walsh said: “March revenue was affected by the timing of Easter and the Brussels terrorist attacks, with the latter continuing into quarter two.”
The group added that it has also seen softer underlying demand for its key business and first-class seats.
It said as a result the firm would “moderate its short-term capacity growth plans”.
But it added that it expected fuel costs to fall by around 1% this year. Due to oversupply, Brent crude has slumped by some 70% since its peak in the summer of 2014.
IAG said it expects to generate a similar increase in operating profit to that seen in 2015 thanks to continued cost savings.
Last year IAG spent 1.4 billion euro (£1.1 billion) to acquire Aer Lingus.
Over the last few years, IAG has fared better than its key European rivals - Lufthansa and Air France-KLM - which have been hit by strikes over cost-cutting plans and heightened competition from Middle Eastern and budget airlines.