IAG's third quarter profit soars as Iberia improvesFriday 08 November 2013 16.53
Profit at International Airlines Group more than doubled in the third quarter as Spanish carrier Iberia began to recover.
This added to another strong performance from British Airways and boosting its shares.
Europe's third-biggest airline group by market value said today that restructuring at Iberia, which has suffered from labour disputes and the loss of once-loyal Spanish consumers to budget rivals during an economic slump, was starting to bear fruit.
IAG, owner of BA and Spain's Iberia and Vueling, posted an operating profit of €690m for the three months to September compared with profit of €270m the same time last year.
IAG was expected to report a third-quarter operating profit, before exceptional items, of €600m, according to a company-supplied consensus forecast.
"The airlines within the group are performing well, underlying market conditions remain unchanged, and the profit target for the year indicates that we expect to be profitable," IAG boss Willie Walsh said.
IAG is targeting 2013 operating profit of around €740m. Willie Walsh declined to update longer-term targets which he said would be provided at an investor day next week.
Other legacy European airlines such as Lufthansa and AirFrance-KLM are slashing jobs and revising growth plans as they grapple with soaring jet fuel prices and a weak economy, leaving gaps that budget carriers have been quick to exploit.
The appearance of low-cost airlines and high-speed trains in Spain have been particularly harsh on Iberia's business during five years of economic recession or stagnation that just ended in the third quarter.
Profit at Iberia rose to €74m in the third quarter from €1m the same time a year ago, while BA made a quarterly operating profit of €477m, up from €268m a year ago.
Group revenues rose by an annual 6.9% to €5.4 billion in the three month period.