British Airways owner IAG has reported a significant jump in annual profits and raised its forecast for 2015.
IAG, which also includes Iberia and Vueling, said it expects to generate an operating profit of €2.2 billion this year. This is 20 per cent higher than previous forecasts and has been helped by the drop in oil prices bringing down fuel costs.
IAG CEO Willie Walsh said other factors such as more fuel-efficient aircraft were also responsible for the strong results.
“We achieved a strong unit cost performance, down 4.1%, through increased productivity, supplier cost savings and lower fuel unit costs. The latter was boosted by the introduction of more efficient aircraft into our fleet and lower fuel prices in the last quarter of the year.
“However, the positive effect of the oil price reduction has been partly offset by hedging and significant currency impact,” he said.
The airline group reported pre-tax profits €828 million for the year ending December 31, from €227 million the previous year.
All three airlines performed strongly last year: British Airways operating profit was £975 million, a £324 million improvement over last year, Iberia’s was €50 million, a rise of €216 million on 2013 and Vueling’s operating profit was €141 million, a €2 million improvement over the previous year.
Walsh hailed the “remarkable” turnaround in fortunes for Iberia. “We’re very proud of its achievement especially its strong cost discipline. In 2013 we said our intention was for Iberia to break even in 2014 and it has fulfilled that promise.”
Aer Lingus takeover
Last month, IAG launched a €1.36bn takeover bid for Irish airline Aer Lingus, but it gave no further details on the progress of the takeover in its results statement.
The Irish government, which holds a 25% stake in Aer Lingus, is believed to have concerns over the deal and trades unions have warned over jobs cuts.
Walsh told the BBC today that the group will have discussions shortly with the Irish government.
"I'm very much focused on the fantastic results that we've announced today and looking forward to developing IAG with the existing airlines and with opportunities to expand with other airlines."