British Airways-ownerInternational Airlines Group said today its seasonal first-quarter loss narrowed by 46%, beating forecasts, as a turnaround at its Iberia unit started to take effect.
The company posted an operating loss before exceptional items of €150m in the three months to March 31, compared to the €278m loss it made in the year earlier period.
It also compared to analyst expectations for a loss of €162m from a company-compiled consensus.
Like most airlines and tour operators, IAG generally reports a loss in the traditionally weaker first part of the year and makes the bulk of its profits in the summer months.
IAG also said cost cutting would help it grow 2014 operating profit by at least €500m from the €770m it made in 2013, putting it on track to meet analyst expectations for the year. The group has a target to double profit over the next two years.
IAG said a restructuring at Iberia, the Spanish airline that has dragged on group earnings since its merger with British Airways in 2011, helped that business's quarterly losses halve this year compared to last year.
The group said in February that loss-making Iberia would return to profit in 2014, weeks after a deal was agreed with pilots to cut labour costs.
IAG said its British Airways and Vueling units posted losses of €5m and €30m respectively, adding that Vueling, its low-cost carrier, had kept losses flat while growing capacity.