Category Archives: IAG

IAG converts eight Airbus A330-200 options into firm orders for Iberia

IAG (British Airways and Iberia) (London) has decided to convert eight A330-200 options, previously announced, into firm orders for Spain’s flag carrier Iberia, which will become a new operator of the A330-200. The aircraft will be delivered from the end of 2015 and will be equipped with GE CF6 engines. Iberia’s all Airbus fleet already includes eight A330-300s.

Iberia today operates an all Airbus fleet, including 13 A319, 12 A320, 18 A321, 8 A330-300, 8 A340-300 and 17 A340-600. On August 1, 2014, the new A330s were announced alongside an order for eight Airbus A350-900 aircraft. In total they will replace 16 A340 family aircraft in Iberia’s long-haul fleet. The airline flies to more than a 100 destinations in 38 countries.

Image: Airbus.

Iberia:

IAG has its best second quarter since 2007

International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London) reported second quarter net income of €280 million ($376 million) up from €127 million ($170.5 million) net income for the same period a year ago. This is the best second quarter results since 2007.

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Copyright Photo: Tony Storck/AirlinersGallery.com. Boeing 767-336 ER G-BNWD (msn 24336) of British Airways arrives at Baltimore/Washington.

British Airways:

Iberia:

Vueling Airlines:

IAG reduces its first quarter loss to $206.3 million

International Consolidated Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London) today (May 9, 2014) presented Group consolidated results for the first quarter and the three months to March 31, 2014.

IAG period highlights on results:

. First quarter operating loss €150 million ($206.3 million) (2013: operating loss of €278 million – $382.3 million) before exceptional items
. Revenue for the quarter up 6.7 per cent to €4,203 million, up 7.6 per cent at constant currency
. Non-fuel costs up 3.8 per cent, up 4.8 per cent at constant currency
. At constant currency, first quarter passenger unit revenue down 1.4 per cent (excluding Vueling down 0.5 per cent) and non-fuel unit costs down 6.2 per cent (excluding Vueling down 4.2 per cent)
. Fuel unit costs for the quarter down 8.9 per cent, 7.4 per cent at constant currency
. Cash of €4,004 million at March 31, 2014 was up €371 million on 2013 year end
. Adjusted gearing remains at 50 per cent

Willie Walsh, IAG Chief Executive Officer, said:

“We’re pleased that our quarterly operating loss has reduced significantly from €278 million last year to €150 million, especially as Vueling’s quarterly losses were not included last year as they weren’t in the Group. At constant currency, revenue was up 7.6 per cent and non-fuel costs rose 4.8 per cent.

“Iberia has almost halved its losses from quarter one last year with an operating loss of €111 million compared to €202 million. The airline continues to benefit from restructuring and these figures don’t reflect the impact of recent pay and productivity agreements which took effect in April. While the restructuring remains work in progress, Iberia is gradually resuming some routes including longhaul services to Santo Domingo and Montevideo.

“British Airways made an operating loss of €5 million in the quarter, compared to a €72 million operating loss in 2013. The airline has increased capacity within a controlled cost environment and benefited from the efficiency of its new Airbus A380 and Boeing 787 aircraft.

“Vueling made an operating loss of €30 million and has managed to keep its losses flat while growing capacity. The airline continues to grow with its main focus in southern Europe”.

Copyright Photo: Antony J. Best/AirlinersGallery.com. British Airways’ Airbus A380-841 G-XLEB (msn 121) approaches the runway at London’s Heathrow Airport.

British Airways:

Iberia:

Vueling Airlines:

International Airlines Group returns to profitability for 2013

International Airlines Group (IAG) (British Airways, Iberia and Vueling Airlines) (London and Madrid) today (February 28, 2014) presented Group consolidated results for the year to December 31, 2013.

IAG period highlights on results:

Fourth quarter operating profit €113 million (2012: operating loss of €40 million) before exceptional items
At constant currency and excluding Vueling and one-offs, fourth quarter passenger unit revenue up 2.7 per cent, and non-fuel unit
costs down 2.7 per cent
Operating profit for the year to December 31, 2013 of €770 million (2012: operating loss of €23 million) before exceptional items
Revenue for the year up 3.1 per cent to €18,675 million and passenger unit revenue for the year up 0.6 per cent (3.7 per cent at constant currency)
Fuel costs for the year down 2.5 per cent to €5,951 million (2012: €6,101 million). Fuel unit costs down 5.0 per cent at constant currency
Non-fuel costs before exceptional items for year down 0.7 per cent at €11,954 million. Non-fuel unit costs down 5.6 per cent, down 2.7 per cent at constant currency

Cash of €3,633 million at December 31, 2013 was up €724 million on 2012 year end (December 2012: €2,909 million).
Adjusted gearing down 1 point to 50 per cent

Willie Walsh, IAG chief executive, said:

“In 2013, we strengthened the Group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability with a turnaround of nearly €800 million. Our operating profit was €770 million before exceptional items, with passenger revenue up 5.8 per cent and non-fuel costs down 0.7 per cent.

“British Airways continued its solid revenue performance this year and we’re seeing cost improvements, resulting in an operating profit of €762 million. This is the first full year that it’s benefited from the additional Heathrow slots and greater network flexibility created by bmi’s integration. Both the A380 and Boeing 787 were introduced into the airline’s fleet successfully. The new aircrafts’ economic and environmental performance has been excellent and customers love them.

“Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved. It has reduced its losses in the year, reporting an operating loss of €166 million. The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.

“Vueling is a great asset and provides a new cultural dimension to IAG. The airline reported an operating profit of €168 million from April 2013, when we acquired it, and expanded its network across continental Europe. To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling’s value to the Group.

“We have shown strong financial management this year. Despite buying Vueling and increasing our capital expenditure, cash was up €724 million versus last year and adjusted gearing was down 1 point to 50 per cent.

“Quarter 4 saw an improved financial performance from all our airlines and we are reporting an operating profit of €113 million before exceptional items. Passenger revenue was up 4.0 per cent and non-fuel costs were down 4.1 per cent”.

Trading outlook:

In 2014 we expect to make steady progress towards our 2015 Group operating profit target of €1.8 billion, with relatively flat unit revenue growth, and margin expansion driven by falling unit costs.

Copyright Photo: Keith Burton/AirlinersGallery.com. Vueling has been a good buy for IAG. Formerly operated by Belle Air Europe, Airbus A320-214 EI-LIS (msn 3492) has been repainted at Southend.

British Airways:

Iberia:

Vueling Airlines:

British Airways to return three GSS Boeing 747-8 freighters to Atlas Air Worldwide Holdings in April

Atlas Air Worldwide Holdings, Inc. (Atlas Air) (New York) has announced it intends to pursue new ACMI (aircraft, crew, maintenance and insurance) placement opportunities for three 747-8 Freighter aircraft currently operated for British Airways plc by Atlas Air Worldwide’s 49%-owned UK subsidiary, Global Supply Systems Limited (GSS).

The action follows notice from British Airways, a unit of International Consolidated Airlines Group, S.A., regarding British Airways’ strategic decision to exit dedicated cargo-freighter service and to return the aircraft to GSS in April 2014 pursuant to the terms of the existing ACMI agreement between the parties.

Effective with the termination of the agreement, the three 747-8Fs will be redelivered to the company by GSS. Through GSS, the company also will receive contractual early termination fees from British Airways.

Meanwhile Qatar Airways (Doha) will operate five Boeing 777F freighter flights between Hong Kong and London for IAG Cargo (British Airways) starting on May 1. IAG Cargo issued this statement:

IAG Cargo has announced it has signed a long-term commercial agreement with Qatar Airways to purchase capacity on Qatar Airways-operated air cargo freighters, effective from May 1, 2014.

Qatar Airways will operate five Boeing 777F flights a week between Hong Kong and London on behalf of IAG Cargo, providing continuity of service for IAG Cargo customers.

The agreement marks a transition for IAG Cargo and follows the company’s decision to transfer freighter operations from its current provider, Global Supply Systems.

IAG Cargo connects 350 destinations worldwide, serving the world’s economic hubs with cargo-friendly wide-bodied planes. Through its Constant Climate network, it has one of the largest networks globally for handling temperature-sensitive air cargo.

Qatar Airways is already a partner with IAG through the oneworld global alliance which it joined in October 2013. The airline is taking delivery of a further three Boeing 777F aircraft during 2014.

Top Copyright Photo: Rainer Bexten/AirlinersGallery.com. This decision will end British Airways World Cargo and Global Supply Systems. GSS operated Boeing 747-87UF G-GSSD (msn 37562) in British Airways World Cargo colors departs graceful from Cologne/Bonn.

British Airways World Cargo (GSS):

Qatar Airways:

Video: Flying the Boeing 747-800F freighter:

Bottom Copyright Photo: Ton Jochems/AirlinersGallery.com. Boeing 777-FDZ A7-BFA (msn 36098) of Qatar Airways Cargo taxies at Amsterdam.

IAG orders 30 Airbus A320ceo and 32 A320neo aircraft for Vueling Airlines

International Airlines Group (IAG) (London) has secured firm orders and options for up to 220 Airbus A320 family short-haul aircraft – up to 120 of these for its subsidiary Vueling Airlines (Barcelona). The new aircraft will enable the airline to replace some of its existing Airbus A320 fleet and expand its business.

The Vueling agreement comprises 62 firm orders – 30 A320ceo and 32 A320neo – plus 58 options. The firm orders will be delivered to Vueling between 2015 and 2020.

In addition, IAG has secured 100 A320neo options which could be used for any of the airlines in the Group – British Airways, Iberia or Vueling – for aircraft replacement requirements.

IAG chief executive, Willie Walsh, said: “Vueling has managed to successfully expand its business profitably by targeting both growth markets and those areas where weak competitors are reducing capacity. These new aircraft will enable Vueling to continue that expansion and replace some of its older fleet with modern, fuel efficient aircraft, leading to further unit cost reductions.

“The benefits that the merger brings to all our airlines are highlighted once again. In addition to the Vueling order, we have also been able to secure a further 100 A320neo options for all the airlines in the Group”.

The Vueling firm orders are subject to approval by IAG’s shareholders. This order will be reviewed alongside the recent IAG long-haul orders for Boeing 787s and Airbus A350s, at a shareholder meeting later this year.

Copyright Photo: Rolf Wallner/AirlinersGallery.com. The pictured Airbus A320-232 EC-LVT (msn 5612) with Sharklets was handed over to Vueling on May 31, 2013.

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International Airlines Group loses $43.7 million in the first half, British Airways brings the new Airbus A380 to Frankfurt

British Airways (London) brought its new Airbus A380 to Frankfurt (above) on August 2 as the flag carrier continues to test out the new type on its short haul European routes before it is introduced on longer international routes.

In other news, parent International Airline Group (IAG) lost $43.7 million in the first half of 2013. However IAG had a good second quarter as it managed to cut losses at Iberia in the second quarter to $39.7 million. IAG has cut 1,700 jobs at Iberia (Madrid) and plans to cut another 1,700 by 2015.

IAG issued this financial statement:

International Consolidated Airlines Group (IAG) presented Group consolidated results for the six months to June 30, 2013.

IAG period highlights on results:

Second quarter operating profit €245 million (2012: loss €4 million) before exceptional items, based on strong passenger unit revenues and non-fuel unit cost improvements
Before Vueling at constant currency, second quarter passenger unit revenue up 4.8 per cent and non-fuel unit costs down 0.2 per cent
Operating loss for the half year €33 million (2012: loss €253 million) before exceptional items
Revenue for the half year up 2.1 per cent to €8,707 million including 1.7 per cent adverse currency impact
Passenger unit revenue for the half year up 2.8 per cent (4.6 per cent at constant currency), on capacity increase of 1.2 per cent
Fuel costs for the half year down 3.7 per cent to €2,864 million (2012: €2,973 million). Fuel unit costs down 4.7 per cent at constant currency
Non-fuel costs before exceptional items for the half year up 1.1 per cent at €5,876 million. Non-fuel unit costs down 0.2 per cent, up 0.9 per cent at constant currency
Cash €3,627 million at June 30, 2013, up €718 million including €549 million of Vueling cash
Adjusted gearing up 3 points to 54 per cent including Vueling

Willie Walsh also stated subsidiary Vueling Airlines (Barcelona) would be expanding again and would be taking on a larger role in intra-European routes. Higher-cost Iberia will be reducing its presence in Europe.

Copyright Photo: Bernhard Ross/AirlinersGallery.com. British Airways’ Airbus A380-841 G-XLEA (msn 095) taxies to the gate at Frankfurt.

British Airways:

Video: British Airways has introduced this new “A Ticket to Visit Mum” video for the Indian market:

Boeing launches the 787-10, ALC, GECAS, IAG-British Airways, Singapore Airlines and United Airlines place orders

Boeing (Chicago) announced today at the 2013 Paris Airshow that it has launched the 787-10 Dreamliner, the third member of the super-efficient 787 family. Commitments for 102 airplanes from five customers across Europe, Asia and North America provide a strong foundation to support development and production of the newest Dreamliner.

Customer launch commitments for the 787-10 include Air Lease Corporation, with 30 airplanes; GE Capital Aviation Services, with 10; International Airlines Group / British Airways, with 12 subject to shareholder approval; Singapore Airlines, with 30 and United Airlines, with 20 airplanes.

The new 787-10 will fly up to 7,000 nautical miles (12,964 km) — covering more than 90 percent of the world’s twin-aisle routes — with seating for 300-330 passengers, depending on an airline’s configuration choices. The second member of the family, the 787-9, is in final assembly in Everett, Wash., and is set to make its first flight later this year.

“The 787-10 Dreamliner will be the most-efficient jetliner in history. The airplane’s operating economics are unmatched and it has all the incredible passenger-pleasing features that set the 787 family apart as truly special,” said Boeing Commercial Airplanes President and CEO Ray Conner. “The 787-10 is 25 percent more efficient than airplanes of its size today and more than 10 percent better than anything being offered by the competition for the future.”

Design of the 787-10 has already started at Boeing, and international partners will be involved in detailed design in the months ahead. Final assembly and flight test of the 787-10 are set to begin in 2017, with first delivery targeted for 2018.

“Our ongoing investment in the 787 family is well-founded,” said Conner. “With the 787-10, we’ve designed an exceptional airplane supported by an efficient and integrated production system that can meet increasing demands and create new opportunities for us. Our team and our customers are excited about growing the product line and expanding our presence with this family of airplanes.”

The 787 family’s unique interior offers passengers technologies that make their flights more enjoyable, including large, dimmable windows; cleaner air; higher humidity; lower cabin altitude; bigger stowage bins; soothing LED lighting and a smoother ride. The 787-10 will share a common type rating not only with the 787-8 and 787-9 but also with the popular Boeing 777, giving airlines additional flexibility in scheduling and training flight crews.

United Airlines issued this statement:

United Airlines today increased its 787 Dreamliner order to 65 aircraft (including six previously delivered aircraft) with an order for 20 787-10s.United is the North American launch customer for the 787-10 and it expects delivery of its first aircraft in 2018. United ordered 10 incremental 787-10 aircraft and will convert 10 existing 787s on order to 787-10s, enabling the airline to further modernize its international widebody fleet by replacing older, less efficient aircraft. The advanced technology and composite construction of the 787 reduce fuel burn and carbon emissions, while providing a superior customer experience.

United is currently the only U.S. airline to operate the 787. United has six new 787-8 aircraft in service and had previous orders for an additional 49 Dreamliners consisting of both the -8 and -9 variants. The 787-10 is a stretched version of the 787-9 and will offer the lowest fuel burn per seat of any aircraft in its size category. The 787 offers up to 20 percent better fuel efficiency per seat than similarly sized aircraft, due in part to the more than 50 percent composite makeup of its structure. The 787 also boasts an enhanced inflight experience including larger windows, larger overhead bins and lower cabin altitude with enhanced ventilation systems that reduce the effects of jet lag.

The 787-10 order is the latest in United’s commitment to improve the efficiency of its fleet. In July of last year, United announced a narrowbody order for 100 Boeing 737 MAX 9 aircraft and 50 Boeing 737-900ER aircraft. In addition, United has an order for 25 Airbus A350 aircraft. The airline is also modernizing its United Express fleet by adding 70 76-seat Embraer aircraft that will be operated by United Express regional partners.

Images: Boeing.

IAG converts 18 Boeing 787 options to firm order for British Airways, total now 42

International Airlines Group (IAG) (London) has reached agreement with Boeing for new longhaul aircraft for the group’s fleet.

IAG plans to convert 18 existing Boeing 787s options into firm orders for British Airways (London). They will be used to replace some of the airline’s Boeing 747-400 aircraft between 2017 and 2021.

For Iberia, IAG has reached agreement with Boeing to secure commercial terms and delivery slots that could lead to an order for Boeing 787s. Firm orders will only be made when Iberia has restructured and reduced its cost base and is in a position grow profitably.

British Airways’ 787s will be powered by Rolls-Royce Trent 1000 engines. The engine order includes a comprehensive maintenance package with total care agreement.

Willie Walsh, IAG chief executive, said: “British Airways has 24 Boeing 787s on order already and we plan to boost this by a further 18 aircraft by exercising our options.

“The aircraft offers a step change in fuel burn efficiency versus our existing aircraft with improvements in fuel cost per seat of more than 20 per cent. New technology engines and improved aerodynamics will lower fuel burn leading to reduced carbon and NOx emissions.

“The creation of IAG has resulted in greater buying power for both airlines through joint procurement and we have been able to obtain delivery slots for Iberia as part of British Airways’ order”.

British Airways has 118 wide-bodied longhaul aircraft in its fleet with 42 aircraft (12 Airbus A380s, 24 Boeing 787s, six 777-300 ERs) already ordered.

Iberia has 31 wide-bodied longhaul aircraft in its fleet with six A330 aircraft already ordered.

The fleet order is subject to approval by IAG shareholders.

British Airways:

IAG sinks to a pretax loss of $1.29 billion due to Iberia

International Consolidated Airlines Group (IAG) (British Airways and Iberia) (London) presented the Group’s consolidated results for the year to December 31, 2012. In addition, IAG presented combined results for the comparative year to December 31, 2011, including Iberia’s first 21 days of January in 2011.

IAG period highlights on combined results:

· Operating loss for the year to December 31, 2012 of €23 million before exceptional items ($29.8 million) (2011: operating profit €485 million). After exceptional items operating loss for the year not including Iberia restructuring and impairment was €68 million, compared to our guidance in November of €120 million

· Before exceptional items, British Airways made an operating profit of €347 million in the year to December 31, 2012 and Iberia made an operating loss of €351 million

· Non-operating charges for the year were €384 million, including €266 million related to non-cash pensions accounting requirements

· Loss before tax for the year of €997 million ($1.29 billion) (2011: profit before tax of €503 million), including restructuring charge of €202 million for the Iberia transformation plan and €343 million impairment of Iberia intangible assets

· Revenue for the year up 10.9 per cent to €18,117 million (2011: €16,339 million), including €872 million or 5.4 per cent currency impact. Passenger unit revenue for the year up 9.4 per cent, on top of volume increases of 2.8 per cent

· Fuel costs up 20.4 per cent to €6,101 million (2011: €5,068 million before exceptional items). Fuel unit costs up 16.8 per cent, or 8.4 per cent at constant currency

· Non-fuel costs before exceptional items, up 11.6 per cent at €12,039 million, including €543 million of adverse currency translation. Non-fuel unit costs up 8.5 per cent, or 3.8 per cent at constant currency

· Capital investment of €1,239 million (2011: €1,071 million) including over €400 million on pre-delivery payments for future aircraft

· Cash of €2,909 million at December 31, 2012 was down €826 million on 2011 year end (December 2011: €3,735 million). Group net debt up €741 million to €1,889 million (December 2011: €1,148 million)

Many will now question what was British Airways thinking when it merged with Iberia to form the IAG? Mergers are not always the answer.

Copyright Photo: With its continued employee strikes, lack of labor peace and a soft economy in Spain, Iberia is a bleeding airline bringing down British Airways and the IAG. Iberia’s Airbus A340-313X EC-KSE (msn 170) climbs away from the MAD hub.

British Airways: