British Airways and Iberia’s parent company IAG announced its first set of results today which showed a profit despite snow and strikes.
The results comprise IAG three month and full year results, Iberia’s full year results and BA’s nine month results. They reflect €119 worth of non-recurring costs such as Iberia restructuring, BA’s scrapping of two Boeing 747s and merger completion costs of €26 million
Operating profit for the quarter to December 31 stood at €6 million, compared to an operating profit loss of €114 million in 2009.
IAG says the €6 million would have been €196 million if it excluded disruption and non-recurring items.
The results show profit before tax for the quarter at €21m. In 2009, there was a loss before tax of €208m. Revenue for the quarter rose by 13.4% to €3,812 million. In 2009, it was €3,362 million. Meanwhile fuel costs rose 5.2% and other operating costs went up by 11.1% at €2,817 million.
IAG chief executive Willie Walsh said: “The combined group figures for the final quarter of 2010 show a return to profitability, versus last year, with a good revenue performance based on strong yields and a small capacity increase.
“The quarterly profit was affected by severe weather in the UK and a Spanish air traffic controllers’ strike which disrupted the airlines’ operations and reduced revenue by €71 million.
“There were also a number of non-recurring costs totalling €119 million including provision for Iberia restructuring costs, impairment charges associated with the decision to scrap two British Airways Boeing 747 aircraft and merger completion costs. In addition, there was a €43 million bonus provision after performance criteria were met.”
In reference to the Middle East uprisings and oil-rich Libya’s current state of virtual civil war, Walsh added: “The current political instability in the Middle East and its impact on fuel prices is being monitored closely”.
The group’s chairman Antonio Vázquez added: “Last year, the IAG airlines recovered from the previous years’ losses and returned to profit despite a number of significant external events. The combined operating profit was €225 million with revenue up by 10 per cent while capacity levels were down. IAG’s cash position remains very strong at €4,352 million with net debt falling by €430 million to €895 million.
“We are confident that we are on track to deliver our synergy targets”.
by Dinah Hatch
