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Interim Results

Record first quarter performance for IAG

05 May 2017 07:19

International Consolidated Airlines Group's first quarter operating profits before exceptional items rose to €170m up from €155m last time - a record performance in what is traditionally its weakest quarter.

The group said the period had seen increasing fuel prices and a stronger US dollar against both the euro and sterling.

Sterling had also devalued significantly against the euro.

It said the transactional foreign exchange impact for the group was net nil, while translation exchange was significant.

The group's reported revenues and expenses were lower by €406 million and €374 million respectively with a net adverse impact on operating profit of €32 million.

Passenger revenue decreased 4.2% compared to the same period last year.

Passenger unit revenue (passenger revenue per ASK) was down 3.1 per cent at constant currency from lower yields (passenger revenue/revenue passenger kilometre) impacted by the timing of Easter.

At constant currency, passenger yields decreased on leisure routes with the shift in Easter from March last year to April this year, partially offset by improvements in corporate bookings.

IAG said: "Although passenger yields are down in the quarter, the passenger revenue performance trend improved versus the previous quarter. Passengers carried by the Group rose to 21,147 thousand, an increase of 3.8 per cent.

"Cargo revenue for the period decreased 2.3 per cent, 2.1 per cent at constant currency.

"The Cargo premium mix remained strong partially offsetting overall yield decreases while cargo tonnes carried were broadly flat. "Other revenue was up 13.7 per cent or €64 million excluding currency impacts, from an increase in activity at Iberia's third party maintenance (MRO) business, BA Holidays and Avios.

Chief executive Willie Walsh said: "We're reporting an operating profit of €170 million before exceptional items which is up from €155 million compared to last year.

"This is a record performance in Q1, traditionally our weakest quarter, with the improving trend in passenger unit revenue continuing. "The impact of currency exchange was €32 million in the quarter due to the translation of sterling profit into euros. "In March we launched LEVEL, our new longhaul low cost airline brand, which starts flights from Barcelona to Los Angeles, San Francisco, Punta Cana and Buenos Aires in June. It's already been extremely successful with sales running well ahead of expectations."

Separately, IAG said group traffic in April, measured in revenue passenger kilometres, increased by 10.0 per cent versus April 2016; group capacity measured in Available Seat Kilometres rose by 4.0 per cent.

Group premium traffic for the month of April increased by 7.0 per cent compared to the previous year.

Story provided by StockMarketWire.com

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