August 2 2013

British Airways parent company IAG has reported a return to profit in the last quarter.

IAGIAG, parent company of British Airways, Iberia and Vueling, reported an operating profit of 245 million euros (£214) for the second quarter of the year, a significant improvement on the 4 million euro loss reported for the same period last year.

The turn-around in fortunes is partly down to an improvement in trading at Iberia, with losses at 35 million euros, down from 95 million previously, but mainly a result of an increase in profits at British Airways , up from 94 million euros to 247 million euros. Vueling, which finally came under the control of IAG in April also contributed 26 million euros in profits for the quarter.

A poll tax on flying


Commenting on the results, IAG CEO Willie Walsh stated: “This is the first step in the restructuring but it is already bearing fruit with Iberia’s [second quarter] losses down from €93m last year to €35m, reversing the negative trend of the last 11 quarters”.

He went on to advise that more than 1,700 staff have now left Iberia since re-structuring of the airline begun, with remaining staff seeing signifcant cuts in their salary ranging from 11% to 18%.

With IAG’s results beating market expectations, IAG was this morning biggest rises on the FTSE 100 with the share price up 3.5% at 307.80.