British Airways owner International Airlines Group (International Airlines Group - the parent company of British Airways and Spain's Iberia which was created by the merger of the two carriers in 2010) has reported a 60 per cent drop in profit for the first quarter, blaming higher fuel prices and “foreign exchange headwinds”.
The group, which owns BA, Level, Aer Lingus, Iberia and Vueling, recorded an operating profit of €135 million, down from €340 million in the first quarter of 2018. Passenger revenue per available seat kilometre fell 0.8 per cent year-on-year.
A 15.8 per cent increase in fuel costs and an adverse net foreign exchange operating impact of €61 million hit IAG’s airlines, though CEO Willie Walsh remains positive about the group’s outlook.
Walsh said: “In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of €135 million.”
The drop in profit comes as IAG’s airlines reported a 6.5 per cent increase in passenger numbers to more than 34.2 million across the quarter. Latin America and the Caribbean proved to be especially successful, seeing 19.6 per cent growth in traffic.
In the first quarter, the group placed an order for 18 Boeing 777-9 aircraft for BA to replace 14 B747-400s and four B777-200s between 2022 and 2025.
The carrier will move to New York John F Kennedy airport’s Terminal 8 with partner American Airlines in 2022 following a joint investment that will include additional aircraft stands and new baggage systems, lounges, premium check-in areas and upgraded concessions.
In addition, Level established a new base at Amsterdam Schiphol airport with three A321s, with flights to Luton launching in April.
Looking ahead, International Airlines Group - the parent company of British Airways and Spain's Iberia which was created by the merger of the two carriers in 2010 says it expects its 2019 operating profit to be in line with 2018, with passenger revenue predicted to improve for the remainder of the year.