Mateusz Maszczynski is a serving international flight attendant with experience…
The owner of British Airways and Iberia has become the only airline group in Europe (not including the new Ryanair Group) to report a profit in the first quarter of 2019 (from January to March). The IAG Group, which also owns low-cost carriers Vueling and LEVEL, as well as Aer Lingus reported a combined profit of €135 million for the period – down over 60% on the same period in 2018.
Unfortunately, IAG doesn’t break down its financial performance by airline brand so there’s no way of knowing whether there were particularly strong performers in the IAG portfolio – or for that matter, whether there were weak links that have been dragging the group down.
In comparison, the Lufthansa Group (which also includes Austrian, SWISS and Eurowings) reported a loss of €336 million in the first quarter. The Air France-KLM Group reported a Q1 loss of €303 million. The first quarter is typically a low-performance period in the aviation industry and this was particularly acute this year because of the late timing of the Easter break.
Like most other airlines, IAG has blamed rising fuel prices, along with currency fluctuations for the fall in profits. IAG claims that it’s still on track to hit its full-year profit forecast but passenger unit revenue is expected to be flat – a similar situation has already been reported by both Lufthansa and Air France-KLM.
“In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of €135 million,” commented Willie Walsh, the group’s chief executive.
Main take outs from the report include:
- Fuel costs were up 22%
- Passenger revenue rose 5.2% but yields (how much an airline makes per passenger) dropped by 1.4%
- Seat load factor averaged out at nearly 81%
Clearly, IAG hasn’t performed as well as last year but it’s doing a far better job at dealing with significant headwinds than many other airlines. It’s a shame, though, that IAG hasn’t revealed the individual figures by airline and one has to wonder whether that would reveal some very telling information.
Full-year results which do include individual brand performance showed that British Airways was by far the strongest airline in the group with a total profit of nearly €2 billion. The Spanish low-cost short-haul brand, Vueling was the smallest contributor with a reported profit of €200 million.
The LEVEL brand, which is largely seen as IAG’s way of competing against Norwegian, is expected to be spun off from Iberia and this will give a much clearer idea of how this upstart is performing.
The IAG group was formed in 2011 when British Airways and Iberia merged. The group is registered in Spain but shares are traded in both Madrid and London and the head office is also in London.
Mateusz Maszczynski is a serving international flight attendant with experience at a major Middle East and European airline. Mateusz is passionate about the aviation industry and helping aspiring flight attendants achieve their dreams. Cabin crew recruitment can be tough, ultra-competitive and just a little bit confusing - Mateusz has been there and done that. He's got the low down on what really works.