IAG generates 90 million euro profit in last quarter

Hotel News - 28/02/2011

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International Airlines Group says it generated a pro-forma net profit for the quarter ending in December of €90 million. The aviation powerhouse was created last month by merging British Airways with Spanish carrier Iberia.

The positive result compares very well with the same period a year earlier, when the airlines lose €130 million. The gains come on the back of a big rise in revenue and yields as capacity grew only slightly.

Will Walsh, CEO of the group, said IAG is paying very close attention to the political developments in the Middle East as well as their effect on fuel prices. He conceded that the groups’ airlines would be forced to adjust or even cut capacity if demand was hit by increasing oil prices.

In the past, both BA and Iberia have made passengers bear the brunt of an average of half of the increases in fuel costs through the use of fuel surcharges. Walsh maintained that the use of fuel surcharges continues to be a valid option.

Walsh went on to note that demand on long-haul routes operated by BA and IB had so far not been harmed by recent increases in the carriers’ fuel surcharges. He added that the prospect of a collapse in traffic to and from the Middle East did not concern him too much as the region accounts for just six per cent of the group’s capacity.

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