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Interim Results

IAG after-tax profits up after very strong Q2

28 July 2017 07:26

International Consolidated Airlines Group's after-tax profits rose to €567m in the six months to the end of June - 2.3% up on last time.

IAG's operating profit was €975 million before exceptional items, an improvement of €265 million from last year.

British Airways made a profit of €741 million before exceptional items (2016: €631 million); Iberia made a profit of €84 million (2016: loss €6 million); Aer Lingus made a profit of €59 million (2016: €42 million) and Vueling's loss was €6 million (2016: loss €54 million).

On 17 March IAG launched LEVEL, a new longhaul low cost airline brand that started its operations in June with flights from Barcelona to Los Angeles, San Francisco, Buenos Aires and Punta Cana.

IAG said LEVEL was flying two new Airbus A330 aircraft fitted with 293 economy and 21 premium economy seats.

LEVEL's trading performance for the period was positive.

In the first half of 2017 fuel commodity prices rose versus last year however the Group's fuel price net of hedging was positive.

Exchange rates were net adverse for the Group.

The pound sterling devalued against the euro and the US dollar.

The euro was also weaker against the US dollar, although to a lesser extent.

Chief executive Willie Walsh said: "We're reporting a very strong performance in quarter 2 with an operating profit of €805 million before exceptional items which is up from €555 million last year.

"The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year.

"Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure which affected British Airways' customers.

"In June, LEVEL started longhaul flights from Barcelona to four destinations. Sales continue to be well ahead of our expectations. We've ordered three additional aircraft and are considering other European bases for the operation."

IAG said that at current fuel prices and exchange rates, it expected its operating profit for 2017 to show a double-digit percentage improvement year-on-year.

The group expected second half passenger unit revenue (passenger revenue per ASK) to show an increase versus last year, at constant currency.

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