British Airways owner International Airlines Group (IAG) has seen its first-quarter profit climb as the timing of Easter provided a welcome lift.
Operating profit in the three months to the end of March soared 75 per cent to €280 million (£247m), traditionally the weakest quarter of the year for the industry.
Revenues were up 2.1 per cent at €5 billion as the group benefited from Easter falling within the reporting period this time round.
IAG chief executive Willie Walsh said: “We’re reporting another strong quarter performance with an operating profit of €280m before exceptional items, up from €160m last year.
“Our positive passenger unit revenue trend continued with an increase of 3.5 per cent at constant currency. This trend benefited partially from the timing of Easter. Despite higher market prices, our fuel unit costs have gone up by just 0.6 per cent in euros.”
The group said revenues were further boosted by service improvements, with a particularly strong showing in North America, Europe and Latin America. Profits were aided by the stronger pound during the period, which bounced back against the dollar and the euro.
IAG expects operating profit for 2018 as a whole to show an improvement year-on-year.
George Salmon, equity analyst at financial services group Hargreaves Lansdown, said: “IAG is adding more passengers, and its planes are taking off with fewer empty seats. That’s helping the top line grow nicely.
“But we think the really impressive part of these results is the group’s tighter grip on controllable costs. Total operating costs actually fell year-on-year, despite headwinds from higher fuel costs.
“IAG is confident of delivering further improvements in its cost base over the remainder of the year, and if passenger revenue keeps rising, that’ll represent a juicy combination for shareholders.”
Last month, IAG revealed that it is exploring a potential acquisition of low-cost carrier Norwegian Air Shuttle.
IAG said at the time that it had acquired a 4.61 per cent stake in the airline, which is “intended to establish a position from which to initiate discussions with Norwegian”, including the possibility of a full takeover offer.
But in an analyst presentation, the firm said that it had so far failed to reach an agreement with the carrier.
“IAG confirms that it has had contact with the Norwegian board regarding a possible offer, without reaching an agreement,” it noted.