IAG flies back into black
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British Airways’ parent company International Airlines Group (IAG) has moved back into profits as it makes ‘steady progress’ on its 2015 target.
The airline group, which also owns Spanish carriers Iberia and Vueling, climbed out of a EUR23 million (GBP18.9m) loss in 2012 to reach an operating profit of GBP635m, with its fourth quarter results coming in at a profit of GBP93m from a GBP32m loss in 2012.
Its load factor remained steady at 80.8%, while fuel costs were down 2.5% to GBP4.8m.
British Airways saw a 2% rise in capacity with its load factors up 1.4%, citing a “solid performance’ in non-premium seats as the carrier introduced hand baggage-only fares.
The carrier’s operating profit improved GBP377m to GBP651m.
Vueling now makes up 6.1% of the group’s revenue with its operating profit up to GBP311m, while Iberia made progress with its turnaround strategy to improve its loss by GBP152m to a loss of GBP136m.
“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 with a turnaround of nearly GBP659m,” said IAG chief executive Willie Walsh. “We have shown strong financial management this year. Despite buying Vueling and increasing our capital expenditure, cash was up GBP597m versus last year and adjusted gearing was down one point to 50%.”
The group is looking to make ‘steady progress’ to reach its target of operating profit of GBP1.4bn in 2015, driven by lowering unit costs.
Its strategy will focus on strengthening its Asia and Africa connections and intra-Europe profitability.
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