BA parent company surges to US$1.5bn profit

IAG, the parent company of British Airways and Iberia, has reported a sharp rise in profits for 2014.

The group generated an operating profit of EUR1.39 billion (US$1.56bn) last year, 80.5% higher than 2013, as revenues climbed 8.0% to EUR20.17bn. Even after tax, IAG’s profits still exceeded EUR1bn.

BA was the main contributor of the positive result, generating an operating profit of EUR1.22bn, up 59.4% year-on-year.

But it was the performance of Iberia that will be most satisfying to IAG. The Spanish national carrier recovered from an operating loss of EUR166m in 2013 to record a profit of EUR50m last year – a turnaround that IAG’s chief executive, Willie Walsh, called “remarkable”. IAG’s Spanish low-cost carrier, Vueling, saw operating profit rise 1.4% to EUR141m.

“We’re reporting strong full-year results,” said Walsh. “[Iberia’s] turnaround has been remarkable, both financially and operationally, and we’re very proud of its achievement especially its strong cost discipline. In 2013 we said our intention was for Iberia to breakeven in 2014 and it has fulfilled that promise.”

Walsh added that the group’s performance was “boosted by the introduction of more efficient aircraft into our fleet and lower fuel prices”, which helped reduce its unit costs by 4.1″.

IAG’s airlines carried a total of 77.3m passengers in 2014, up 15.0% year-on-year, and filled an average of 80.4% seats per aircraft.

The growth was driven by domestic traffic in the UK, Spain and Italy (+21.4% to 19.9m passengers) and European international traffic (+18.3% to 36.7m). Long-haul traffic on routes to and from Asia Pacific climbed 9.7% to 1.8m.

sourced:traveldailymedia.com