logo
Share SHARE
FONT-SIZE Plus   Neg

IAG Q1 Pre-tax Loss Widens As Fuel Costs Climb 25% - Update

International Consolidated Airlines Group (BAY.L, BAIRY.PK,IAG.L), the combined entity of British Airways Plc and Spanish carrier Iberia Airlines, on Friday reported a wider pre-tax loss for the first quarter amid a 25 percent climb in fuel costs and a cost associated with the Iberia pilots' strike.

Pre-tax loss for the quarter widened to 263 million euros ($339.5 million) from 47 million euros loss in the prior year.

In April, British Airways settled a fine with the Office of Fair Trading in the UK relating to investigations into passenger fuel surcharging dating back to 2004 - 2006.

A fine of 70 million euros was agreed, leading to a 35 million euros release of the provision held. This benefit was recognised in the first quarter as an exceptional item. In the prior year, there was an 83 million euros gain on the step acquisition of Iberia.

Excluding exceptional items, pre-tax loss amounted to 300 million euros, compared to 130 million euros loss in the prior-year quarter.

Loss after tax totaled 146 million euros, compared a profit of 33 million euros in the comparable period in 2011.

Iberia's overall operating loss for the quarter was 170 million euros, in comparison with a loss of 100 million euros last year. The Iberia pilots' strike cost 25 million euros in the quarter.

British Airways' operating loss was 62 million pounds before exceptional items much wider than the 5 million pounds loss last year.

Total revenue increased 7.8 percent to 3.92 billion euros from 3.64 billion euros a year ago, and included 1.1 per cent of favourable currency impact.

Passenger unit revenue was up 8.5 percent on capacity increase of 0.6 percent. Cargo revenue edged up 0.3 per cent with yield up 2.6 per cent and volume down 2.2 per cent.

Total expenditure on operations climbed 11.5 percent to 4.13 billion euros amid a nearly 25 percent increase in fuel, oil costs and emissions charges to 1.41 billion euros.

In late April, the airline completed the purchase of Lufthansa' bmi unit in the U.K. The year one operating profit dilution from the acquisition and integration of bmi is expected to be around 240 million euros, including non-recurring restructuring costs of 90 million euros to be booked this year.

IAG expects its operating result to be around breakeven for the full year, after exceptional items, including the non-recurring bmi restructuring cost.

The company expects a fuel cost increase of over 1 billion euros this year. The year-over-year impact of this should be less severe in the second half.

IAG.L is currently trading at 159 pence, down 4 pence or 2.45 percent, on a volume of 1.27 million shares.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Chinese conglomerate Dalian Wanda is in talks to buy Dick Clark Productions, as the company aims to expand in to the US entertainment industry. According to reports, Dalian Wanda Group has started preliminary talks to buy Dick Clark Productions for a price of about $1 billion. Dick Clark Productions... Mortgage applications in the U.S. dropped 0.7 percent from last week. According to data from the Mortgage Bankers Association, market composite index, a measure of mortgage loan application volume, declined 0.7 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis,... LendUp, an online lending startup, had to pay $6.3 million in fine for charging illegal fees and miscalculating higher interest rates. LendUp, which was earlier known as Flurish Inc., is supported by Google's venture capital arm GV and other venture capital firms in Silicon Valley. The California...
comments powered by Disqus
Follow RTT