International Airlines Group (IAG) said its operating profit jumped more than five times to 155 million euro (£121 million) in the three months to the end of March compared with a year ago, boosted by the purchase of Irish flag carrier Aer Lingus completed last September.
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Sticking by its forecast for 2016 profit, IAG, whose portfolio also includes Iberia, Vueling and Aer Lingus, said that trading was affected by the aftermath of the Brussels terrorist attacks and by some softness in demand for business-class travel.
IAG still expects to generate an absolute operating profit increase in 2016 similar to previous year.
The group posted a pre-tax profit of €104m (£81m) for the first quarter, compared to a loss of €26m (£20m) for the same period previous year, as passenger revenue climbed 8% to €4.5bn. “As a result, IAG has moderated its short-term capacity growth plans”.
Profit before tax, before exceptional items, was 111 million euros in the latest quarter.
Chief executive Willie Walsh said: “We’re reporting an operating profit of €155 million before exceptional items which is up by €130 million compared to previous year”.
Last year IAG spent 1.4 billion euro (£1.1 billion) to acquire Aer Lingus.
Passenger unit revenue (passenger revenue per ASK) was down 4.7 per cent at constant currency (‘ccy’) from lower yields (passenger revenue/revenue passenger kilometre) partially offset by higher volumes. February’s leap year also contributed to increased capacity in the quarter prior to the attack.
Fuel costs decreased 14.3 percent, with fuel unit costs down 23.4 percent from lower average fuel prices net of hedging.
IAG chief executive Willie Walsh added that the effect of the Brussels attacks had continued from the first quarter into the second quarter of the group’s year.
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In London, IAG shares were trading at 524.50 pence, down 4.81 percent.
