Jul 28, 2017

IAG shrugs off power outage to post double-digits profits jump

International Airlines Group has posted a double-digit rise in first-half profits, shrugging off the effects of a massive power outage at British Airways that grounded hundreds of flights in May. The group, which owns BA and Iberia, said operating profit before exceptional items rose 37.3 per cent to €975m for the first half of the year, up from €710m a year ago. Total revenues edged up slightly by 0.9 per cent to €10.9bn. IAG on Friday said it expected full-year operating profit to show a double-digit percentage improvement compared with a year ago, driven by a stronger outlook for ticket prices. Non-fuel costs rose 3.5 per cent at a constant currency level in the second quarter, reflecting the effects of the power outage at BA. Willie Walsh, IAG's chief executive, said the group had a "Very strong performance" in the second quarter. "The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year. Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure which affected British Airways' customers," he said. Within the group, BA made a first-half profit of €741m before exceptional items, up from €631m a year ago, while Iberia, the Spanish carrier, saw profits rise to €84m, up from a loss of €6m. Vueling, the group's low-cost airline, saw its losses improve from €54m a year ago to a loss of €6m..

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