International Airlines Group — British Airways, Iberia, Aer Lingus, Vueling and LEVEL — has announced a 75% increase in operating profit for the three months to 31st March 2018.
International Airlines Group (IAG) has announced a 75% increase in operating profit (€280m before exceptional items) for the three months to 31st March 2018. The IAG group includes British Airways, Iberia, Aer Lingus, Vueling and LEVEL, the low-cost long-haul operation launched in March 2017.
Profit after tax and exceptional items for the quarter was €794m, an increase of €737m versus the previous year.
The group reported a significant increase in fuel prices in the three-month period but says that this was partially offset by a weaker U.S. dollar against both the euro and the pound sterling. Fuel costs increased 4.7%, with fuel unit costs up significantly at 10.4% at constant currency from average fuel prices net of hedging.
Capacity, measured in available seat kilometres (ASKs), rose 4.1% with increases across all regions except Asia-Pacific.
Passenger revenue rose 3.4%, while passenger unit revenue (passenger revenue per ASK) increased 3.5% at constant currency from both higher yields (passenger revenue/revenue passenger kilometre) and passenger load factor. The passenger unit revenue increase was partially due to the timing of Easter, but also a continuation of the improvements which began in 2017. Passenger trafic was up 8.5%, at just under 23 million.
At current fuel prices and exchange rates, IAG says it expects its operating profit for 2018 to show an increase year-on-year. Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.