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.