IAG reports strong results in 2017 as profits rise

posted on 23rd February 2018 by Jordan Newton
IAG reports strong results in 2017 as profits rise

The International Consolidated Airlines Group (IAG) posted an increase in profits during 2017 and is optimistic for this year.

The airline group which includes British Airways, Iberia, Aer Lingus, Vueling and Level, reported its consolidated results for the year to 31 December today.

Passenger revenue was up 1.6 per cent to €20.2 billion on 2016, total revenue was up 1.8 per cent to €22.9 billion, profit after tax before exceptional items was up 12.7 per cent to €2.2 billion, and operating profit rose 19 per cent to €3.02 billion.

Available seat kilometres (ASK) was 306,185 million, up 2.6 per cent on the 298,431 in 2016, while the seat factor was 82.6 per cent, up one percentage point.

IAG chief executive officer, Willie Walsh said: “Passenger unit revenue improved 1.5 per cent at constant currency and we benefitted from reduced fuel costs for most of 2017 though our fuel bill started to rise in quarter 4.

“All our airlines performed extremely well with their best-ever individual financial results, strong operational performances and commitment to customer service. The turnaround in Vueling, following the challenges of 2016, has been particularly outstanding.

“In quarter 4 we reported an operating profit of €585 million, down from €620 million last year. Our strong performance continued with passenger unit revenue up 2.4 per cent at constant currency. The operating profit was impacted significantly by changes in the employee bonus provision in the quarter compared to the previous year.

“We’re pleased to confirm that the board is proposing a final dividend of 14.5 euro cents per share. This brings the full year dividend to 27.0 euro cents per share, subject to shareholder approval at our AGM in June. With the dividend and share buyback, we returned more than €1 billion to our shareholders last year.

“Our confidence in IAG’s future remains undaunted and today we’re announcing our intention to undertake a share buyback of €500 million during 2018.”

As for the future, IAG forecasted at current fuel prices and exchange rates, operating profit for 2018 will show an increase year-on-year while both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.