International Airlines Group reports robust results despite slump in sterling

International Airlines Group reports robust results despite slump in sterling

International Consolidated Airlines Group has reported second quarter operating profit €555 million before exceptional items for the six months to June 30th, 2016.

This compared to an operating profit of profit of €530 million for the same period last year.

Removing recently acquired Aer Lingus from the figures would have left IAG with operating profits of €487 million.

IAG – which owns British Airways and Iberia among other carriers – said it had also suffered from the falling value of sterling following the British decision to leave the EU.

Willie Walsh, IAG chief executive, said: “Our performance this quarter saw a negative currency impact of €148 million, primarily due to the weak pound.

ADVERTISEMENT

“Numerous external factors affected our airlines including the impact of terrorism, uncertainty around the UK’s EU referendum and Spain’s political situation and increased weakness in Latin American economies.

“This led to a softer than expected trading environment, especially in June.

“In addition, the airlines’ operations have been considerably disrupted by 22 air traffic control strikes in Europe so far this year.

“This has impacted our passenger revenues.

“Our non-fuel unit costs fell 1.1 per cent but are up 0.8 per cent at constant currency, following the significant cost reductions achieved last year.”

Revenues at IAG rose 4.1 per cent to €10.8 billion for the period.

This comes despite passenger unit revenue per available seat kilometres at the group falling 7.2 per cent.

Fuel unit costs fell 31.2 per cent, or 29.3 per cent at constant currency.

IAG said it expected to see €80 million in further losses due to air traffic control strikes for the rest of the year, with Vueling hit particularly hard.