The International Consolidated Airlines Group (IAG) has reported first quarter (Q1) operating profit of €280 million before exceptional items – a 75 per cent increase on the €160 million in Q1 last year.
IAG which today had two bids for Norwegian rejected, includes British Airways, Iberia, Aer Lingus, Vueling and Level, beat an analysis forecast for Q1 of €206 million in the period from from 1 January to 31 March.
Net profit rose to €794 million from €57 million in Q1 last year. This included a €639 million exceptional gain driven by a reduction in pension liabilities.
Total revenue in Q1 rose to €5,022 million, up 2.1 per cent on Q1 2017 and passenger revenue was €4,415, down 3.4 per cent. Available seat kilometres was 71,092 million, up 4.1 per cent. Passenger unit revenue per available seat kilometre fell 0.7 per cent but was up 3.5 per cent in constant currency.
IAG chief executive officer, Willie Walsh said: “We’re reporting another strong quarter performance with an operating profit of €280 million before exceptional items, up from €160 million last year.
“Our positive passenger unit revenue trend continued with an increase of 3.5 per cent at constant currency. This trend benefitted partially from the timing of Easter. Non-fuel unit costs before exceptional items were down 0.9 per cent at constant currency.
“Despite higher market prices, our fuel unit costs have gone up by just 0.6 per cent in euros.
“This quarter British Airways put in place a new flexible defined contribution pension scheme. It replaces the existing New Airways Pension Scheme (NAPS) and British Airways Retirement Plan (BARP).”
As for the future, IAG said at current fuel prices and exchange rates, it still expects its operating profit for 2018 to show an increase year-on-year. Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.