IAG losses widen in Q1
IAG, which operates British Airways and Iberia, saw its losses widen in the first quarter of 2013, as exchange rates and restructuring costs hit the group.
The Anglo-Spanish company posted a net loss of EUR630 million (US$820m) for the January-March 2013 period – significantly worse than the EUR129m loss it registered in the same period last year. The group’s total revenue actually increased 0.5% to EUR3.94 billion, but expenses also climbed, rising 1.2% to EUR4.53bn, including a EUR311m bill relating to Iberia’s ongoing restructuring. Without this, the airline’s loss would have amounted to EUR319m. The company’s operating loss for the quarter was EUR278m.
IAG has made progress recently however, placing new aircraft orders for BA and sealing the takeover of Spanish low-cost carrier, Vueling.
“We’re reporting an operating loss of EUR278m this quarter before exceptional items, which at constant currency was EUR38m better than last year,” said Willie Walsh, IAG’s chief executive. “These results are encouraging with underlying revenue strength in strategic markets however while the first step towards restructuring Iberia has been taken, there is more work to be done.
“Non-fuel unit costs have risen due to two short term activities which will benefit the group in the long term. Iberia cut capacity in the quarter however its reduction in headcount and labour costs began in earnest in April. British Airways has increased its headcount in advance of the new aircraft arriving this year,” he added.
While the group did not provide guidance for its full-year profits, it did say that trading is “in line with our expectations” and that it expects to reduce capacity by 1.8% in 2013.