Post-Christmas boost for BA's owner
The owner of British Airways has posted a profit in the post-Christmas quarter for the first time since it acquired Spanish carrier Iberia in 2011.
International Airlines Group (IAG) managed a surplus of 25 million euro after a big improvement in trading at both BA and Iberia and the benefit of Easter trading, which was in April the previous year.
IAG now expects annual operating profits in excess of 2.2 billion euro, which would compare with 1.39 billion euro in 2014.
The improved results for the group's traditionally weakest trading quarter come as IAG drums up support for its bid to buy Aer Lingus.
The board of the Dublin-based carrier is prepared to accept an offer but progress hinges on major shareholders Ryanair and the Government.
With currency movements and the earlier Easter helping its performance, IAG said passenger revenues increased 12.3% to 4.1 billion euro.
British Airways made a profit of 117 million euro, up from a loss of five million euro a year earlier. Iberia's deficit was cut in half to 55 million euro and low-cost arm Vueling narrowed its loss to 29 million euro.
Fuel costs decreased 11% due to lower oil prices and the introduction of more efficient planes.
Iberia's restructuring has seen 2,500 staff leave the airline under a voluntary redundancy programme, while salaries were reduced by between 11% and 18%. The group employs a total of 60,000 people.
IAG shares were 3% lower after it warned that the rate of profit improvement in this quarter will be slower due to fuel prices and the timing of Easter.
Robin Byde, a transport analyst at Cantor Fitzgerald, has retained his sell rating on the stock despite the group continuing to outperform the sector.
He added: "We are somewhat concerned about the group's reliance on profits at BA, and, hence, North American traffic. These are solid first quarter results but we think that all the good news is now priced in."