IAG’s First Quarter Net Drops 74 Percent
International Airlines Group (IAG) announced a 74 percent fall in first quarter net profit, with currency exchange rates contributing to the drop.
Net profit came in at EUR€27 million, down from last year’s €104 million. IAG said currency exchange had a net drag of €32 million on operating profit during the quarter to end March.
Revenue for the period was down 2.8 percent to €4.93 billion, as passenger revenue dropped 4.2 percent. Operating costs also dropped, to €4.78 billion from €4.91 billion a year ago. Operating profit came in at €151 million after exceptional items, a 9.7 percent boost from 1Q16.
“This is a record performance in Q1, traditionally our weakest quarter, with the improving trend in passenger unit revenue continuing,” IAG chief executive Willie Walsh said.
IAG group airlines carried 21.1 million passengers during the quarter, a 3.8 percent increase. RPK (revenue passenger km) traffic and ASK (available seat km) capacity were both up by 3.3 percent, with load factor edging up 0.1 of a percentage point to 79.0 percent.
Capacity grew in all regions, particularly Aer Lingus’ North Atlantic routes and Vueling in Spain, IAG said.
Fuel costs dropped 10.8 percent, on fuel unit costs down 16.1 percent at constant currency, as a result of hedging.
IAG said it expects operating profit for 2017 to show an improvement year-on-year at current fuel prices and exchange rates.
IAG is the parent company of Aer Lingus, British Airways, Iberia and Vueling. In March it announced the launch of a new low-cost long-haul carrier LEVEL with flights from Barcelona to the US and South America starting from June.
Walsh last month called the LEVEL launch “incredible”, and indicated after Friday’s results announcement that its fleet would be expanded next year and another European city added to its schedules.