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July/August 2017
For Business, Corporate Travel & Meeting Buyers & Arrangers

IAG profits up despite British Airways IT crash

British Airways’ owner IAG increased its operating profit by 45 per cent to €805 million for the second quarter of 2017, despite the costs of BA’s high-profile IT failure in May.

IAG was boosted by a 4.3 per cent rise in revenue to €5.95 billion during the three months up to June 30, as well as a 10.4 per cent drop in fuel unit costs. Operating profit for the first half of 2017 also rose by 37.3 per cent to €975 million.

The company said that BA’s power failure in May, which forced the cancellation of nearly 700 flights, had cost €65 million in compensation fees and baggage claims.

Willie Walsh, chief executive of IAG, called it “a very strong performance” during the second quarter.

“The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year,” added Walsh.

“Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure, which affected British Airways’ customers."

Walsh added that British Airways had enjoyed “record breaking” bookings in June in the immediate aftermath of the IT failure.

“In June, Level started long-haul flights from Barcelona to four destinations," he added. "Sales continue to be well ahead of our expectations. We've ordered three additional aircraft and are considering other European bases for the operation.”

IAG said that its operating profit is expected to increase by a “double-digit percentage” in 2017 compared with last year.

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