British Airways owner IAG lifted its 2015 profit outlook after third-quarter results beat expectations, citing strong demand for summer travel and cheaper fuel, and promised more progress on its cost base next year.
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IAG, which in August added Ireland’s Aer Lingus to its stable of airlines, said that its full-year operating profit would range from 2.25 billion euro (£1.6 billion) and 2.3 billion euro (£1.7 billion), having previously forecast 2.2 billion euro (£1.6 billion).
Operating profit before one-time gains or costs rose to 1.25 billion euros ($1.37 billion) from 900 million euros a year earlier, Europe’s third-largest airline operator said Friday in a statement.
Aer Lingus has contributed an operating profit of €45 million since it joined IAG on August 18.
This is higher than its previous forecast of €2.2 billion.
The company’s key traffic measures, available seat kilometres, also increased in the first nine months of the year, up to 203.38 billion from 190.23 billion a year earlier. Vueling’s profit was €178 million, up from €140 million. North Atlantic passenger unit revenues were broadly flat for the nine months, down 1 per cent.
IAG’s non-fuel unit costs were 3.5 percent lower in the quarter on a constant currency basis and Chief Executive Willie Walsh told reporters there was more to come.
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IAG’s results followed its announcement on Thursday that the board had approved an interim dividend, which it had said would be triggered by it meeting 2015 financial targets. The group said it expects to pay out 25 per cent of its underlying profit after-tax in dividends for the full-year. It is payable from December 7 to shareholders who are on the register at December 4. The update comes after the blue-chip company, which recently acquired Aer Lingus, yesterday announced its first dividend since the merger between British Airways and Iberia in 2011.
