International Consolidated Airlines Group S.A. (IAG.L,BAIRY.PK,BAY.L), parent of British Airways Plc and Spanish flag-carrier Iberia Lineas Aereas de Espana S.A., Friday reported a wider loss for the first quarter, hit by an exceptional charge related to Iberia's restructuring and higher expenditure. The company said the current trading is in line with its expectations.
The company reported a pre-tax loss of 670 million euros that widened from last year's loss of 247 million euros. Last-year results have been restated.
The latest results included an exceptional charge of 311 million euros, principally relating to restructuring at Iberia.
Excluding items, loss before tax was 359 million euros compared with 284 million euros loss in the prior year.
Loss after tax widened to 630 million euros or 34.3 euro cents per share from 129 million euros 7.2 euro cents per share in the previous year.
Total revenue rose 0.5 percent to 3.939 billion euros from 3.919 billion euros in the prior year. At constant exchange rates, total revenue was up 1.7 percent.
Passenger revenue advanced 1.7 percent to 3.35 billion euros. However, cargo revenue dropped 7.2 percent.
Total expenditure on operations increased nearly 10 percent to 4.528 billion euros, mainly due to higher employee costs and increased Handling, catering and other operating costs. For the quarter, capacity, measured in Available seat kilometres, dropped 2.1 percent to 50.359 billion. Traffic, or Revenue passenger kilometres, slid 0.5 percent to 38.975 billion. Seat factor advanced 1.3 percentage points to 77.4 percent.
Last month, IAG had reached an agreement with Boeing Co. (BA) on new long-haul aircraft for the group's fleet, including conversion of some existing Boeing 787 Dreamliners options into firm orders. The company said today that it is no longer giving guidance at the operating profit level for 2013, as it has to seek shareholder approval for this fleet replacement orders and consequently report on any outstanding profit forecast as part of that process.
Willie Walsh, IAG chief executive, said current trading is in line with the company's expectations. For 2013, excluding recently acquired Spanish discount carrier Vueling SA, the firm expects to reduce group capacity by 1.8 percent, and keep non-fuel unit cost flat with last year.
IAG.L is falling 2.6 percent in early morning trade at 273.20 pence.
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