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Owner of British Airways and Iberia Beats Expectations in Latest Financial Results

Owner of British Airways and Iberia Beats Expectations in Latest Financial Results

Owner of British Airways and Iberia Beats Expectations in Latest Financial Results

The European airline group, IAG has beat market expectations, posting a profit of €1,460 million for the third quarter.  IAG is the Madrid-based owner of British Airways and Iberia, as well as low-cost Spanish carrier Vueling and Aer Lingus.  The group also owns the new low-cost carrier, LEVEL – which was created as a way for the group to compete directly with the likes of Norwegian, and now Ryanair-funded Laudamotion.

IAG hasn’t released individual figures for how well each airline has performed but it’s believed British Airways has once again been a star performer – despite a massive data breach in September.  The airline yesterday said a forensic review of the hacking incident revealed that details from 77,000 more payment cards than previously thought had been stolen in the breach.

At the time British Airways said it would offer anyone affected by the hack credit checking services for free – although since alerting customers to the hack, the airline says there have been no cases of fraud.  The matter was immediately reported to police but it’s still not known who was responsible or exactly how the data was stolen.

Results have increased across the IAG group despite a summer full of disruption from strike action across Europe, bad weather and aircraft issues.  “These were strong results despite significant fuel cost and foreign exchange headwinds,” explained Wille Walsh, IAG’s chief executive.

Walsh was commenting on the effect the strong U.S. Dollar has had on the results, as well as fuel price increases of 15%.  Despite those cost increases, IAG still anticipates its profits for 2018 to be €200 million higher than originally expected.

In the first nine months of 2018, the group has carried 86 million passengers across its portfolio of airlines – IAG says it has managed to increase passenger revenue 5.3% compared to the same period in 2017, in part by improving its yield per passenger.  Load factor across the group came in at a reasonable, although not amazing, 84%.

Yesterday, low-cost long-haul carrier, Norwegian reported a profit for the same period of $1.55 million on the back of revenue totalling $1.53 billion.  Norwegian’s colourful chief executive Bjørn Kjos said the airline was offering a “solid result this quarter” but warned, “tough competition, high oil prices and a strong dollar will affect the entire aviation industry.”

The European aviation industry is going through a significant period of consolidation as smaller airlines fail in what’s becoming an ever tougher competitive environment.  In the last couple of months we’ve seen Nordic low-cost airline Primera fall into liquidation and Cypriot carrier, Cobalt Air was forced to end its operations last week.

Ryanair boss, Michael O’Leary has only recently speculated on the failure of another Nordic airline at some point this winter.  O’Leary wouldn’t be drawn on what airline he was referring to, although it’s believed he was talking about Iceland’s WOW Air or even Norwegian.

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