IAG 'clearly making progress' after Q1, says Hargreaves Lansdown

9th May 2014 09:26

British Airways and Iberia owner IAG is 'clearly making progress', according to Hargreaves Lansdown Stockbrokers which said that reduced losses in the first quarter were better than forecast.For the three months ended March 31st, the group reported an operating loss of €150m before exceptional items, compared with a loss of €278m the year before. Meanwhile, revenue rose to €4,203m from €3,939, while fuel unit costs fell 8.9%, or 7.4% at constant currency. "Cost reduction at the company remains central, with areas such as handling, catering, property and IT still very much in focus. Increased staff productivity, particularly at Iberia, is playing its part, whilst it and the broader industry's move to more fuel efficient aircraft remains a key theme," said Hargreaves Equity Analyst Keith Bowman.He said that hopes of a return to a payment of a dividend "are moving onto the agenda"."For now, with the group's restructuring ongoing and the recovery in the global economy still broadly intact, analyst consensus opinion remains highly favourable in tone (strong buy)."However, Bowman did note that the stock's 140% jump over the last 18 months "provides some room for caution". Meanwhile, IAG's cyclical natures means that it is dependent on an improving global economy and uncontrollable fuel costs remain an uncertainty.The stock was 1% lower at 400.5p by 09:53, having erased an early gain.BC