International Airlines Group has reported an operating profit of €245 million before exceptional items in the three months to June 30th, based on strong passenger unit revenues and non-fuel unit cost improvements.
The company – which operates British Airways, Iberia and Vueling – reported a loss of €4 million for the same period of 2012.
Excluding figures from the newly acquired Vueling, and at constant currency, second quarter passenger unit revenue was up 4.8 per cent and non-fuel unit costs down 0.2 per cent.
However, IAG reported an operating loss for the half year to June 30th of €33 million, before exceptional items.
IAG chief executive Willie Walsh said: “Several factors have contributed to the improvement.
“Firstly, the benefits of Iberia’s restructuring are beginning to show.
“Having reduced capacity at Iberia in the first quarter, costs began to be taken out in the second quarter following the implementation of the mediator’s proposal.
“Nearly 1,700 employees have left the airline so far with remaining staff taking salary reductions of 18 per cent for flight and cabin crew and 11 per cent for all other employees.
“This is the first step in the restructuring but it is already bearing fruit with Iberia’s losses down from €93 million last year to €35 million reversing the negative trend of the last 11 quarters.”
Revenue at IAG for the half year was up 2.1 per cent to €8,707 million, including a 1.7 per cent adverse currency impact.
Passenger unit revenue was up 2.8 per cent (4.6 per cent at constant currency), on capacity increase of 1.2 per cent, for the period.
“British Airways’ performance has improved with operating profit up from €94 million in 2012 to €247 million,” added Walsh.
“The London market and transatlantic traffic remains strong, legacy costs from the bmi integration have ended and the airline remains focused on cost control.”
Vueling joined IAG on April 26th, 2013 and in the rest of the quarter achieved an operating profit of €27 million.