International Airlines Group reports higher earnings in 2014 due to Iberia turnaround

International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London and Madrid) presented Group consolidated results for the year to December 31, 2014:

IAG period highlights on results:

Fourth quarter operating profit €260 million (2013: operating profit of €113 million) before exceptional items

Revenue for the quarter up 9.9 per cent to €5,015 million, up 5.8 per cent at constant currency

Non-fuel unit costs for the quarter down 0.8 per cent at constant currency

Operating profit for the year to December 31, 2014 of €1,390 million (2013: operating profit of €770 million) before exceptional items

Revenue for the year up 8.0 per cent to €20,170 million and passenger unit revenue for the year down 0.4 per cent at constant currency

Fuel unit costs for the year down 7.8 per cent also down 7.8 per cent at constant currency.

Non-fuel unit costs before exceptional items for the year down 1.9 per cent, down 3.9 per cent at constant currency

Cash of €4,944 million at December 31, 2014 was up €1,311 million on 2013 year end

Adjusted gearing up 1 point to 51 per cent and adjusted net debt to EBITDAR improved 0.6 to 1.9 times

Willie Walsh, IAG Chief Executive Officer, said:

“We’re reporting strong full year results with an operating profit before exceptional items of €1,390 million which is up 80.5 per cent. Total revenue was up 8.0 per cent with non-fuel costs up 7.0 per cent and fuel costs up 0.6 per cent on capacity growth of 9.3 per cent.

“Iberia made an operating profit of €50 million compared to an operating loss of €166 million last year. The airline’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.

“British Airways’ operating profit increased to €1,215 million up from €762 million last year which shows significant progress towards its long term targets. Vueling made an operating profit of €141 million, compared to an operating profit of €139 million in 2013, with the airline focusing on flexible growth.

“We achieved a strong unit cost performance, down 4.1 per cent, through increased productivity, supplier cost savings and lower fuel unit costs. The latter was boosted by the introduction of more efficient aircraft into our fleet and lower fuel prices in the last quarter of the year. However, the positive effect of the oil price reduction has been partly offset by hedging and significant currency impact.

“In the quarter, we made an operating profit before exceptional items of €260 million which is up from €113 million last year. Revenue for the quarter was up 9.9 per cent. Non-fuel costs were up 10.5 per cent and fuel costs decreased by 0.4 per cent on capacity growth of 5.8 per cent.”

British Airways aircraft slide show: