IAG off to flying start

25th Feb 2011 07:21

The first set of results from International Airlines Group (IAG), the company formed by the merger of British Airways and Iberia, showed the group made a profit last year, despite higher fuel costs.The pro-forma results for 2010 are based on full year figures from Iberia and nine-month figures from British Airways, and showed 2010 revenue rose 10% to €14,798m from €13,456m in 2009.Profit before tax was €84m, compared to a loss of €1,158m in 2009.The filled seat percentage rose to 79.0% from 78.6% the year before. Looking at just the fourth quarter, operating profit was €6m, compared to an operating loss of €114m the year before, but would have been €196m the company said, were it not for disruptions caused by strikes and bad weather, plus charges for non-recurring items."The quarterly profit was affected by severe weather in the UK and a Spanish air traffic controllers' strike which disrupted the airlines' operations and reduced revenue by €71 million. There were also a number of non-recurring costs totalling €119 million including provision for Iberia restructuring costs, impairment charges associated with the decision to scrap two British Airways Boeing 747 aircraft and merger completion costs. In addition, there was a €43 million bonus provision after performance criteria were met," explained IAG chief executive, Willie Walsh.Profit before tax for the fourth quarter was €21m versus a loss the year before of €208m.Fourth quarter revenue rose by 13.4% to €3,812m from €3,362m in the fourth quarter of 2009.Fuel costs jumped 5.2% year on year to €989m."The combined group figures for the final quarter of 2010 show a return to profitability, versus last year, with a good revenue performance based on strong yields and a small capacity increase," Walsh said."The current political instability in the Middle East and its impact on fuel prices is being monitored closely," Walsh added.