BA and Iberia owner IAG returns to annual profit

28th Feb 2014 07:00

The owner of Spanish flag carrier Iberia and British Airways, International Airlines Group (IAG), hailed the success of its turnaround strategy as it returned to annual profit.IAG said the acquisition of Spanish budget carrier Vueling, an overhaul of Iberia and improved revenue at BA had led to an annual operating profit of €770m against losses of €23m a year ago.Vueling has expanded its across Europe while reporting an operating profit of €168m from April 2013, when it was bought by IAG.Chief Executive Willie Walsh said: "To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling's value to the group."Iberia reduced its annual losses to €166m after a restructuring drive including job cuts and deals with pilots and cabin crew to improve productivity.Walsh said BA, which made an operating profit of €762m, benefited from cost-cutting and extra take-off and landing slots at Heathrow provided by IAG's acquisition of rival carrier BMI.Pre-tax profits from ongoing operations were €227m versus losses of €774m a year ago.IAG said it expected in 2014 to make steady progress towards its 2015 group operating profit target of €1.8bn.Walsh said: "In 2013, we strengthened the group by acquiring Vueling, embarking on Iberia's transformation and enhancing BA's revenue performance. This has led to a strong financial recovery and return to profitability."PW