IAG, the holding company for the merger of British Airways and Iberia, booked a net profit last year of 151 million euros after a loss of 658 million a year earlier, with the return to profitability aided by the absorption of low-cost carrier Vueling, restructuring at Iberia and improved revenues for BA.
Operating profit before extraordinary items amounted to 770 million euros, compared with an operating loss of 23 million euros a year earlier. The turnaround reflects improved revenues for BA, cost savings by Iberia and organic growth in the domestic and European markets by Vueling.
Iberia booked an operating loss of 166 million euros, compared with a loss 351 million a year earlier. “Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved,” IAG’s chief executive Willie Walsh said in a statement. “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.”
BA made an operating profit of 651 million pounds (794 million euros), 377 million pounds (459 million euros) more than a year earlier. The British carrier benefited from additional Heathrow slots and greater network flexibility created by the integration of bmi.
Vueling booked an operating profit of 137 million euros, an improvement of 101 million on the previous year and increased its capacity by 21.9 percent. “To increase capacity while improving profit margins is a tremendous achievement and underlines Vueling’s value to the group,” Walsh said.