Operating profits rise at British Airways owner
International Airlines Group benefits from recovery at Spanish airline Iberia
British Airways owner International Airlines Group reported a 55 per cent rise in second-quarter operating profit today, mainly due to a recovery at Spanish airline Iberia. Photograph: Steve Parsons/PA Wire
IAG, Europe’s second-largest airline by market value led by former Aer Lingus chief executive Willie Walsh, posted operating profit before exceptional items of €380 million, ahead of a company-supplied consensus forecast of €354 million.
IAG, which also owns Spain-based budget airline Vueling, reiterated its target to increase 2014 operating profit by at least €500 million from the €770 million it made last year. The outlook shows IAG is weathering an increasingly competitive European airline market better than rival former state-owned carriers, such as Lufthansa and Air France-KLM, helped by low-cost Vueling which it acquired last year. The rival airlines have both issued profit warnings in recent weeks and said they are focusing on ramping up their presence in Europe’s low-cost short-haul market, dominated by easyJet and Ryanair.
IAG said it would trim capacity in the winter by around 3 percentage points. Its shares, which have fallen 19 per cent over the last three months, gained 3 per cent.