International Airlines Group posts record first quarter results
The owner of British Airways has posted record first quarter results, despite the collapse in sterling weighing on the firm.
International Airlines Group (IAG) said operating profit rose 9.7% to 170 million euros (£144 million) in the three months to March 31, traditionally the weakest quarter of the year for airlines.
Chief executive Willie Walsh said: "This is a record performance in the first quarter, traditionally our weakest quarter, with the improving trend in passenger unit revenue continuing."
However, revenue fell 2.8% to 4.9 billion euros (£4.1 billion), and the firm was forced to stomach a 32 million euro (£27 million) hit from the collapse in the value of the Brexit hit pound.
IAG issued a profit warning after the referendum on June 23, and in October warned that ticket prices may have to rise as a result of sterling's slump.
In March the group, which also owns the Aer Lingus and Iberia airlines, launched Level, a new long-haul low-cost airline brand.
Mr Walsh said that Level was proving a success with "sales running well ahead of expectations".
IAG added that it expects operating profit for 2017 to show an improvement year-on-year.
Shares rose 4.5% to 598p in morning trading.
Neil Wilson, s enior market analyst at ETX Capital, said: "These are highly impressive figures for what's the quietest time of the year for airlines and well ahead of expectations.
"IAG has been able to navigate its way through stormy conditions last year, posting a 31% rise in annual profits in February, so this is continuing the trend and means it's on track to live up to expectations that this year will be even better than last."
However, Mr Wilson flagged that an area of concern is passenger unit revenue, which was down 7.2% for the quarter, with Brexit also threatening aviation agreements for British airlines flying into the EU.