28th February 2014
British Airways owner International Consolidated Airlines Group (IAG) has bounced back to post a profit for 2013 writes Philip Scott.
The boost comes on the back of reduced losses at its Spanish airline group Iberia, and the acquisition of budget carrier, Vueling. The business said it was on track to meet its 2015 targets and reported a profit of 527m euros (£433m) in 2013, up from losses of 613m euros the previous year.
Established by merger of British Airways and Iberia in January 2011, IAG is now one of the world’s largest airline groups with more than four hundred aircraft, flying 55m passengers to some 200 destinations.
On the back of the management’s efforts to restructure the firm, the shares have rocketed by no less than 103% in the past 12 months.
The current consensus among brokers is that the stock is a ‘buy’, with analysts at groups including Deutsche and Nomura currently upbeat on the group.
In a statement, Willie Walsh, IAG chief executive said: “British Airways continued its solid revenue performance this year and we’re seeing cost improvements, resulting in an operating profit of €762m.
“This is the first full year that it’s benefited from the additional Heathrow slots and greater network flexibility created by bmi’s integration.
“Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved. It has reduced its losses in the year, reporting an operating loss of €166 million. The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.”