International Airlines Group has returned to profit as attempts to turn around the struggling Spanish flag-carrier Iberia start to pay dividends.
IAG, which also owns British Airways, said it made an operating profit of €770 million before exceptional items in the year to December 31st, compared to a loss of €23 million in 2012.
Fourth quarter operating profit stood at €113 million.
Revenue for the year was up 3.1 per cent to €18,675 million and passenger unit revenue for the year up 0.6 per cent.
“Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved,” explained Willie Walsh, IAG chief executive.
“It has reduced its losses in the year, reporting an operating loss of €166 million.
“The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.”
British Airways continued its solid revenue performance, resulting in an operating profit of €762 million.
Walsh continued: “This is the first full year that it’s benefited from the additional Heathrow slots and greater network flexibility created by bmi’s integration.
“Both the A380 and Boeing 787 were introduced into the airline’s fleet successfully.
“The new aircrafts’ economic and environmental performance has been excellent and customers love them.”
IAG also acquired Spanish carrier Vueling in 2013.
“Vueling is a great asset and provides a new cultural dimension to IAG,” continued Walsh.
“The airline reported an operating profit of €168 million from April 2013, when we acquired it, and expanded its network across continental Europe.
“To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling’s value to the group.”
Across IAG fuel costs for the year were down 2.5 per cent to €5,951 million.
Non-fuel costs before exceptional items for year were down 0.7 per cent at €11,954 million.
In 2014 IAG said it expected to make steady progress towards its 2015 group operating profit target of €1.8 billion, with relatively flat unit revenue growth, and margin expansion driven by falling unit costs.