Rise in profits at British Airways owner IAG
IAG, which also owns Spain’s Iberia, reported pre-tax profits of €449 million (£315m) for the three months to the end of June helped by a 12 per cent fall in fuel costs at constant currency.
But revenue per passenger was 6.6 per cent lower, with analysts at Cantor Fitzgerald saying it suggested “stiff price competition” and that the market was forcing the business to pass on the benefits of plunging oil prices.
It comes as the group is on course for a takeover of Aer Lingus in a deal valuing the Irish carrier at some €1.4 billion – after gaining agreement from the Irish government and Ryanair, which both have major stakes.
IAG’s earnings growth for the second quarter was slower than it had been at the start of the year, which it said it had previously warned.
But chief executive Willie Walsh said: “We are on track to reach our full-year targets.” He added that employee and supplier costs continued to be cut.
IAG expects to post an operating profit “in excess of €2.2bn” for the year. Profits at British Airways for the quarter rose 36 per cent to €453m.