Category Archives: International Airlines Group

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:

Iberia aircraft slide show:

Vueling Airlines aircraft slide show:

Is IAG’s seduction of Aer Lingus working?

International Airlines Group’s (IAG) (British Airways, Iberia and Vueling Airlines) (London) continued seduction of Irish flag carrier Aer Lingus (Dublin) seems to be finally working, as the airline is revealing the positives of a takeover by the owner of British and Spanish flag carriers British Airways (London-Heathrow) and Iberia (Madrid).

In a statement to The Guardian, Christoph Mueller, the clover-tailed carrier’s outgoing CEO says that Ireland’s entire economy will benefit if the International Airlines Group takes over Aer Lingus.

Mueller, who steps down as CEO of the airline this week, said IAG’s £1.02 billion (€1.4 billion) ($1.57 billion) offer to buy Aer Lingus would be the biggest single foreign investment in the Republic since the financial crash.

He continued that there was “a great deal of excitement” that Aer Lingus would be able to create jobs on a much larger scale if IAG took charge of the former state-run airline.

Mueller also stressed that talks between IAG and the Aer Lingus trade unions had been “very constructive”.

Aer Lingus announced on Tuesday that its profits had risen by almost 18% to €72 million ($81.6 million) from the previous year. Total revenue was up by 9.2%. For the first time in the airline’s history the number of passengers has exceeded 11 million.

On the hike in profits and the IAG take-over proposal, Mueller added: We profitably expanded our long-haul network utilizing our cost advantage and favorable geographic position and helped establish Dublin as the 7th largest European hub for transatlantic connections.

“Our short-haul business continued to demonstrate its resilience despite a highly competitive market. Commercial initiatives, in addition to cost control, led to the highest operating profit since the financial crisis and 17.8% above last year.”

Qatar Airways acquires a stake in IAG

Qatar Airways (Doha) has bought a 9.99 per cent stake in British Airways’ owner International Airlines Group (IAG), becoming the company’s largest shareholder.

The move will cement a close commercial relationship between BA and the airline, whose owner, the Qatari government, is a significant investor in Britain.

Willie Walsh, chief executive of International Airlines Group, the BA owner, said in : “We’re delighted to have Qatar Airways, one of the world’s premier airlines, as a long-term supportive shareholder. We will talk to them about what opportunities exist to work more closely together and further IAG’s ambitions as the leading global airline group.”

BA sponsored Qatar’s entry into the Oneworld airline alliance, and they also have a cargo partnership. Qatar has indicated it would seek to extend ties following the investment, which could include codeshares on flights via the Gulf state, allowing the airlines to sell tickets on each other’s planes.

Akbar Al Baker, the Qatar airline’s CEO said: “IAG represents an excellent opportunity to further develop our westwards strategy.”

Qatar Airways is prohibited from owning more than a minority stake in IAG under EU ownership rules and said it does not currently intend to increase its 9.99% shareholding.

Report by Assistant Editor Oliver Wilcock from Manchester.

Copyright Photo: SPA/AirlinersGallery.com. Qatar Airways’ second Airbus A380, the pictured A380-861 A7-APB (msn 143) completes its final approach to London’s Heathrow Airport, the home of IAG’s British Airways.

Qatar Airways aircraft slide show:

http://airlinersgallery.smugmug.com/Airlines-Asia-3/Airlines-Asia3-QZ/Qatar-Airways

Will Aer Lingus now accept IAG’s new raised cash bid to acquire the Irish carrier?

Aer Lingus (Dublin) is now expected to recommend a takeover by the International Airlines Group-IAG (London) (British Airways, Iberia and Vueling Airlines) according to a report today by The Irish Times. This change of heart comes after the IAG raised its bid for the flag carrier to a €2.50 ($2.80) a share cash bid. The offer could face opposition from the Irish government. If accepted and approved, Aer Lingus would join the Oneworld alliance.

Read the full report: CLICK HERE

Copyright Photo: SPA/AirlinersGallery.com. Aer Lingus controls valuable slots at London’s Heathrow Airport. Airbus A320-214 EI-DEF (msn 2256) completes its final approach to Heathrow.

Aer Lingus aircraft slide show:

http://airlinersgallery.smugmug.com/Airlines-Europe-1/Airlines-Europe-1/Aer-Lingus

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: