Aer Lingus parent sees huge hike in operating profit

Aer Lingus parent IAG achieved a massive 520 per cent rise in operating profit in the first quarter, in what is traditionally the group's weakest quarter

IAG, which also includes British Airways, Iberia and Vueling, said first quarter operating profit jumped to €155 million from €25 million for the same period a year earlier.

However, the group moderated its short-term capacity growth plans due to second quarter revenues being impacted by the aftermath of the Brussels terrorist attacks and some softness in demand for business class travel. IAG also said it expects to reduce its underlying ex-fuel unit costs for the full year by around one per cent.

The group, which reported a 7.9 per cent in first quarter revenues, expects to generate a full-year operating profit increase similar to 2015.

Turnover rose to €5.1 billion in the quarter, up from €4.7 billion a year earlier with passenger revenue up 8 per cent to €4.46 billion from €4.14 billion.

Passenger unit revenue for the quarter was down 3.5 per cent and at constant currency down 4.7 per cent, the group said.

Non-fuel unit costs were up 1.3 per cent, and at constant currency up 0.6 per cent, while fuel costs were down 23.4 per cent and by 30.4 per cent at constant currency.

The group said it had cash of €6,824 million at the end of March, up €968 million versus the end of December.

"January and February's revenue was in line with Q4 2015 trends. March revenue was affected by the timing of Easter and the Brussels terrorist attacks with the latter continuing into quarter two," said chief executive Willie Walsh.

“Our productivity has improved 5.9 per cent and the underlying non-fuel unit costs performance continued to show improvement across our companies,” he added.