International Airlines Group (IAG) has moved into a profit for the first half of the year following an improved performance from Spanish carrier Iberia.
The group posted an operating profit of EUR230m for the six months, compared to a EUR33m loss last year, while its profit after tax was EUR96m compared to a loss of EUR503m.
Iberia still made an operating loss of EUR95m but has gone through several cost-cutting initiatives including reduced capacity and selling its stake in Amadeus. Last week the airline signed an agreement for another 1, 427 people to lose their jobs.
However IAG’s chief executive Willie Walsh announced 16 new long-haul aircraft for Iberia. The group has converted eight Airbus A350-900 options into firm orders and secured another eight A330-220 for the Spanish carrier, which will replace long-haul aircraft from 2015.
The group’s load factors dipped slightly to 78.9% while revenue was up 6.7% to EUR5.086m. The group is expected to increase its operating profit by at least EUR500m in the full year from a EUR770m base in 2013, resulting in more than EUR1.27bn.
“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,” said IAG chief executive Willie Walsh. “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.”