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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:

Strikes against Iberia are cancelled for this month, Iberia to drop three more Madrid routes

Iberia (Madrid) will not be dealing with any strikes this month. The unions have called off their December strikes and will readjust their strategy against the company in January. Iberia issued the following statement:

For Iberia, “calling off the strike can and should be a first step along the necessary path of dialogue and negotiation, which is the sole reasonable way to resolve the company’s problems without harming customers.”

The unions decided to call off the strike after meeting with Iberia Management under the auspices of the mediation and arbitration service. No agreement was reached at the meeting, despite Iberia’s undertaking to be flexible in considering the proposals advanced by the unions. However, though the opportunity to move forward was missed, the meeting could be another step towards future negotiations. Iberia hopes that in the future the possibilities of dialogue and negotiations will be exhausted before any new strikes are called since they inflict great harm on the company and its customers.

Iberia is delighted that its customers may now look forward to travelling without problems, though it regrets the damage already caused to company’s public image and to its business.

Iberia also thanks the mediation and arbitration service for its herculean efforts two bring the tow side closer together. Though no agreement was reached, its efforts had very positive results for Iberia’s customers.

Meanwhile Iberia will drop three more routes from Madrid in January: Athens (January 9), Cairo (January 21) and Istanbul (January 21) per Airline Route.

Iberia: