IAG Boosts Profit Despite Currency Weakness
IAG, the parent of British Airways and Iberia, released its full-year results for 2016, showing a 29 percent rise in net profit to EUR€1.95 billion (USD$2.06 billion).
Operating profit before exceptional items for the year to end December 2016 came in at €2.53 billion, an 8.6 percent rise on 2015.
Total revenue was €22.57 billion, a 1.3 percent dip, but operating costs were also down at €20.08 billion, a 2.4 percent improvement. Fuel unit costs before exceptional items were down 26.8 percent.
IAG chief executive Willie Walsh said it “was a good performance in a challenging environment,” but it was “affected by an adverse currency impact of €460 million. In particular, this was due to the weak pound following the UK's EU referendum.”
IAG, which comprises Aer Lingus, British Airways, Iberia and Vueling carried 100.6 million passengers, the first time it has surpassed 100 million. It was also the first full year of Aer Lingus contributing to the number after joining the group in August 2015.
RPK (revenue passenger km) increased 9.7 percent on an ASK capacity rise of 9.4 percent. Group seat factor edged up 0.2 percentage points to 81.6 percent.
During the year IAG added capacity on UK domestic and Europe routes, and also to Africa, the Middle East and South Asia. Latin America and the Caribbean saw no growth in capacity and North America contracted by slightly over one percent.
The group increased its fleet size by 19 aircraft, mostly Airbus A330s and Boeing 787s as it moved away from thirstier 747-400s and A340s.
IAG said it would buy back €500 million of stock during 2017.