In 2013 Walsh received a £1.3m bonus with long-term share awards worth £2.6m vesting, on top of £825,000 in salary and around £250,000 in pension and benefits.
Keith Williams, the chief executive of British Airways, was paid £3m. Iberia’s boss, Luis Gallego Martín, took a 15% voluntary cut.
Last month IAG struck what it described as ‘landmark’ deal with the unions which appears to have lifted the threat of strikes by Iberia pilots. The deal allowed Iberia to make the vast structural changes necessary to return the airline to growth.
In the report, Walsh said: “I look back on last year with a sense of real pride and achievement for what people within IAG have done to put the business on a more secure footing.”
He said he was targeting operating profits of €1.8bn by 2015, and claimed: “We continue to prove the critical logic of merging British Airways and Iberia through the cost and revenue synergies we are achieving.”
Last week IAG said it returned to profit after reducing losses at Iberia. IAG competed the takeover of BMI in 2012 and also bought the profitable Spanish budget carrier Vueling, which helped improve IAG’s trading.
Pre-tax profit reported by IAG stood at €227 million excluding ‘exceptional items’, a significant improvement in the €774 million loss the previous year.
Sourced from Travel Weekly
If Scotland breaks away from the union he expects to see passengers favouring flying from airports in a newly independent nation to avoid Air Passenger Duty charged by the Westminster government.
“Absolutely without question it will happen,” IAG chief executive told The Telegraph, dismissing claims that APD represents only a fraction of a flight’s cost.
“It is that much money to avoid that it is a factor. Anyone who thinks otherwise is a fool,” said Walsh.
“An independent Scottish government has made clear they would abolish APD because they see it as damaging to the economy and that is exactly what we will see – a million people drive to Dublin from Northern Ireland every year to avoid APD.”
Walsh believes airports in the north of England such as Newcastle would suffer as passengers head north, should Scotland become independent.
But he said British Airways would be unlikely to shake up its flag-carrying services to capitalise on this.
“We would look at it but [flights from Scotland] are a small part of the business,” he said, though he added that IAG’s recently acquired low-cost carrier Vueling could move in to take advantage.
Sourced from Travel Weekly
IAG competed the takeover of BMI in 2012 and also bought the profitable Spanish budget carrier Vueling, which helped improve IAG’s trading.
Pre-tax profit reported by IAG today stood at €227 million excluding ‘exceptional items’, a significant improvement in the €774 million loss the previous year.
Revenue was up3.1% to €18.6bn, despite a near 12% slump in cargo revenue. Passenger revenue grew €16.2bn – almost 6%.
BA made an operating profit of €762m for the 12 months to December 31.
Iberia remained in the red but reduced its losses to €166m. Vueling made a €168m operating profit since being bought by IAG in April.
Walsh said: “In 2013, we strengthened the group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability.”
Sourced from Travel Weekly
IAG said it would result in a “new positive” working relationship between Iberia and SEPLA after years of conflict.
“This landmark agreement provides a strong foundation to put Iberia on the path towards sustainable profitable growth,” IAG said. “It will also enable Iberia to become more competitive and reduce its cost base. “
The main impacts of the agreement are:
- Fundamental productivity improvements within Iberia.
- Salaries to remain frozen until 2015. After that date, increases will be subject to the airline’s profitability.
- An agreement providing a 14% salary reduction for pilots and an additional 4% cut linked to the productivity agreement. With these productivity improvements, the 4% will be returned.
- The faciliation of growth of Iberia and Iberia Express.
The agreement in principle is subject to the approval of SEPLA’s general assembly.
Iberia executive chairman Luis Gallego said: “This groundbreaking deal reduces the cost structure and provides the foundation for the airline to grow profitably.
“A strong and profitable Iberia can protect jobs in the long term and boost tourism, which is a key driver in Barajas’ [Madrid airport] and Spain’s economic recovery.
“Iberia is the natural airline choice for Latin America and this agreement will enable it to be a formidable competitor and build on its new brand, providing customers with great service and an extensive network.
“This agreement also enables the growth of Iberia Express with a competitive cost base and provides promotion opportunities for current Iberia and Iberia Express first officers.
“Iberia Express will help make Iberia profitable and stronger, by providing short-haul feed, and will provide Spanish competition to low-cost carriers.”
IAG chief executive Willie Walsh said: “‘Luis Gallego, his team and SEPLA deserve congratulations for striking a bold deal that will mark the turning point in Iberia’s future.
“Luis has deservedly won the respect of the industry, his colleagues and the trade unions.
“Permanent structural change was the only way to save Iberia from slow decline. This agreement marks the beginning of its future.”
Sourced from Travel News
By Roger Baird,
Shares in British Airways-owner IAG have been one of the top performers of 2013 and investors are betting the airline group has further to rise next year.
At the start of this year the firm, which also owns Portuguese flag carrier Iberia and low-cost Spanish airline Vueling, traded at 194p. Yesterday it closed up 1.6p to 402.4p.
Analysts began covering this stock earlier this month with a buy recommendation, setting a target price of 450p, while brokers at Deutsche Bank and Goodbody Stockbrokers both reiterated their buy ratings on IAG in December.
The business has also benefited from staff cuts, wage restraint and more flexible working practices that Walsh introduced at British Airways before the financial crisis.
IAG, Germany’s Lufthansa and Franco-Dutch outfit Air France-KLM have built strong market positions in Europe on the back of their legacy airline status, consolidation of rivals and control of key take-off and landing slots at major airports such as Heathrow.
However, brokers argue IAG is well placed to do well in 2014 on the strength of its joint venture with US rival American Airlines. The broker says the group should also benefit as it rejigs its airline slots at Heathrow as it converts bmi short-haul slots to more profitable long-haul destinations.
IAG completed its acquisition of UK airline bmi in April 2012 for £172.5million for Lufthansa.
Scribes also like the recent expansion of IAG’s budget carrier Vueling.
The airline recently moved into Brussels Zaventem airport and Rome’s Fiumicino, and Liberum said these moves are ‘unlikely to be the last’.
IAG – like Lufthansa and Air France-KLM – is in a good position to deliver profits on long-haul routes between Europe and North and South America.
But brokers warn these legacy flag carriers will continue to face stiff competition from Middle Eastern rivals – such as Emirates, Eithad and Qatar Airways – on routes between Europe and Asia and Australasia.
However, many analysts tip IAG for continued growth in 2014 – despite a landscape that includes high fuel prices, rising airport charges and low-cost airline competition.
The FTSE 100 lifted 56.70 points to 6750.87, a sixth straight day of gains as investors took their cue from all-time highs on Wall Street to notch up the longest winning streak in London since October.
The session’s gains left the FTSE 100 1.5 per cent off the 2013 closing high at 6,840, which was a 13-year high and only just over 100 points from the all-time peak.
Investors in London also had their first chance to react to a strong fall in US jobless figures released on Boxing Day.
US unemployment claims fell 42,000 to 338,000 in the week ended December 21, according to the Labour Department. Investors took this as a sign that the world’s largest economy is strong enough to withstand the gradual withdrawal of monetary stimulus by its Federal Reserve central bank.
In New York the Dow Jones Industrial Average was up 34.75 points to 16,514.63 in early trading as the market continued to digest a stronger-than-expected fall in US jobless figures.
Back in London sectors sensitive to optimism over the economy, such as miners, were among the top gainers.
Fresnillo advanced 25.5p to 735p. Antofagasta, the copper company controlled by Chile’s billionaire Luksic family, gained 25.5p to 830.5p. Anglo American lifted 34p to 1309.5p, while Glencore Xstrata rose 7.65p to 315.7p.
Monitise lifted 2.5p to 65.5p, a record high. Consumers are estimated to have spent around £400million online yesterday, according to the Centre for Retail Research in Nottingham. Shares of the London-based online payment firm have more than doubled in 2013.
Broadcaster BSkyB was up 11.5p to 844.5p after the Daily Mail reported trader speculation that it might be a target for Vodafone, in part as a defensive manoeuvre to fend off the attentions of AT&T. Vodafone closed up 1.55p at 237.95p.
International Personal Finance slumped 84.8p to 455.2p, having chosen the last thirty minutes of Christmas eve’s shortened session to warn investors of problems in Poland, its largest and most profitable market.
The doorstep money lender said it had been handed a £2.4million fine by the Polish Office of Consumer Protection and Competition for excluding set-up and collection fees from its annual rates of interest. IPR said it would appeal the decision.
Speaking at the Centre for Aviation (CAPA) conference in Amsterdam on Tuesday, Walsh hit out at the European Commission, accusing it of allowing governments to breach rules on state aid. He also slammed the UK government over its handling of visas for Chinese visitors.
Walsh said: “The EU has strict rules on state aid, but it’s weak. Its terrible governments intervene to support airlines which don’t deserve to survive.” He did not refer to Alitalia by name but appeared to have the carrier in mind when he said: “Europe would benefit from consolidation due to failure.”
He described BA sister carrier Iberia, where IAG has overseen major job losses and restructuring, as “a classic example of an airline that hadn’t faced up to structural changes in the industry”.
Walsh said: “Iberia will return to profit next year. We’re making good progress. But it won’t be profitable enough to justify investment so there will be further restructuring.” He added:
“We have to continue to transform BA, but BA will grow at about 3% a year. Iberia won’t grow unless we see structural change.”
Asked about growth to China, he said: “BA’s ambition is to serve several destinations in China. There are a lot of cities where we see opportunities if we get a [UK] visa regime that is fit for purpose.
“The UK attitude to China is old fashioned. The government prioritises trade with China but makes it so difficult to visit Britain from China … There is much more freedom at the Chinese end [of the route] than ours.”
Sourced from Travel Weekly
Press Release by Cardiff Airport
All flights from Cardiff operated by Vueling, which is part of British Airways’ parent company IAG, can now be booked on http://www.britishairways.com.
Cardiff Airport’s Chief Executive, Jon Horne, said: “It’s great news that passengers from Wales and the West can now access flights through the British Airways booking system, along with all the associated benefits, such as 23kg hold luggage included in the cost and the ability for BA Executive Club members to collect Avios loyalty points.”
Also, following a second successful year at Wales’ national airport for the leading Spanish airline, Vueling has launched the second phase of its Summer 2014 programme from Cardiff and re-launched direct flights to Barcelona. It has also launched its first winter programme from Cardiff, with additional flights to Malaga and Alicante, in response to demand from winter sun seekers and holiday home owners travelling from Wales and the West.
The first flight from the Welsh capital to Barcelona will leave on Friday 11th April and will run every Friday and Sunday from April until October, with an additional Wednesday flight during August to meet the demand of travellers keen to sample Gaudi, cava and tapas. Flights are already on sale at www.britishairways.com and www.vueling.com, with single fares from €34.99.
These new flights to Barcelona-El Prat follow an increase in Vueling’s services during summer 2013 which saw the airline flying from Cardiff to Alicante, Malaga and Palma Majorca as well as Barcelona.
“We are delighted to be continuing to offer flights from Cardiff Airport to Barcelona, a city of art, culture and some of the most beautiful and lively beaches on the Spanish mainland”, said Jon Horne, “and it’s pleasing to see that Vueling’s passenger numbers are increasing in line with the overall upward trend we’re experiencing at the Airport.
“We’ve been listening to what our passengers have been saying about where they want to go and at what times of the year, so we’re expecting flights with Vueling to be extremely popular. The added benefits and convenience of being able to book via the British Airways website will no doubt appeal to a lot of people too.”
By Patrick Whyte
The parent company of British Airways has raised its earnings target for 2015 by 12.5% on the back of improved performances in its UK and Spanish units.
International Airlines Group is now targeting and operating profit of €1.8 billion up from €1.6 billion.
It said that an improved performance at struggling Spanish airline Iberia and growth at both BA and Vueling would help fuel the increase.
IAG’s guidance was due to be presented at a capital markets day.
Earlier this month, the company announced that operating profit in its third quarter rose by 156% to €690 million, which helped increase overall pre-tax profits by 148% to €606 million.
Sourced from TTG Digital
By Rob Gill,
Vueling is likely to open more bases around Europe in the next few months, according to the boss of parent company IAG.
The Barcelona-based carrier, which was purchased by IAG earlier this year, last week announced it would be opening a new base in Brussels from May 2014.
IAG chief executive Willie Walsh hinted that Vueling was likely to take advantage of “opportunities in other parts of Europe”.
“Do not be surprised if you see more Vueling bases announced in the months ahead,” added Walsh during a conference call with analysts.
“Vueling has great flexibility and speed of reaction to market opportunities. Vueling also has a product that’s superior against its principal low-cost competitors.”
But Walsh suggested that Vueling was not looking at Madrid as a potential new airport base.
“I don’t think Vueling needs to create a hub at Madrid – there are plenty of other opportunities that are more attractive than Madrid,” he said. “We already have a presence at Madrid in any case.”
Vueling is planning to expand at Seville from April 2014 with new routes to Palma, Asturias, Nantes and Lyon.
Meanwhile rapidly expanding carrier Norwegian, which is planning to fly from Gatwick to the US from next summer, is also to establish a base at Madrid from June 2014.
The airline will operate six routes from Madrid including daily flights to Gatwick, as well as services to Oslo, Warsaw, Hamburg, Helsinki and Stockholm.
Sourced by bbt
By Patrick Whyte
British Airways parent company, International Airlines Group has seen its profits more than double on the back of an improved performance at Spanish airline Iberia and a rebound from last year’s Olympics.
Operating profit in its third quarter rose by 156% to €690 million, which helped increase overall pre-tax profits by 148% to €606 million.
IAG has been battling to turnaround Iberia and last November instigated a transformation plan to return it to profitability. In the three months to the end of September, the Madrid-based airline recorded an operating profit of €74 million.
Profits at BA rose by €209 million to €477 million, which the IAG chief executive Willie Walsh put down to strong London and transatlantic markets and a “€100 million revenue bounce-back from the Olympic effect last year”.
“These are strong results with an operating profit in the quarter of €690 million. The Group’s revenue was up 6.9 per cent and overall costs were down 1.5 per cent. At constant currency, passenger unit revenue was up 6.7 per cent and non-fuel unit costs were down 4.3 per cent,” said Walsh
The improved set of figures has led IAG to boost its outlook for the full year. It now expects “an operating profit for 2013, before exceptional items, of around €740 million.”
Sourced by TTG Digital