BA parent forecasts €500 million profit

BA parent forecasts €500 million profitInternational Airlines Group today forecast a €500 million boost in annual profits but is cutting winter capacity.

This came as second quarter operating profits for the British Airways, Iberia and Vueling group rose by €135 million to €380 million.

Revenue for the quarter to June 30 was up 6.7% to €5,086 million

IAG’s half year operating profit came in at €230 million against a loss of €33 million before exceptional items in the same period last year.

IAG expects the full year operating profit to increase by at least €500 million, from a 2013 base of €770 million at current fuel prices and foreign exchange rates.

While passenger revenues should remain “relatively flat,” margin growth will be driven by cost cuts.

IAG chief executive Willie Walsh said: “In the quarter, we made an operating profit of €380 million which is up from €245 million last year.

“This performance shows that we are making further solid progress. Our disciplined approach to capacity continues and we will make reductions where it makes sense as we go through the year.

“We are, therefore, trimming planned IAG capacity by around three percentage points for the winter 2014 season.

“All of our airlines had their highest second quarter operating result since 2007.

“British Airways’ operating profit was €332 million in the quarter, up from €247 million last year while Iberia made an operating profit of €16 million, compared to an operating loss of €35 million last year. Vueling’s operating profit was €30 million, up from €27 million last year.

“Iberia’s restructuring continues to have a positive impact and last week Iberia signed an agreement that could lead to an additional reduction of up to 1,427 jobs. This will create new opportunities for Iberia to enhance its profitability further in the next two or three years.”

Sourced from Travel Weekly

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