IAG: Half Yearly Report

International Consolidated Airlines Group (IAG) today (August 1, 2014) presented Group consolidated results for the six months to June 30, 2014.

IAG period highlights on results:
Second quarter operating profit €380 million (2013: operating profit of €245 million before exceptional items), €135 million better than last year
At constant currency, second quarter passenger unit revenue down 0.4 per cent (excluding Vueling up 0.1 per cent) and non-fuel unit costs down 4.4 per cent (excluding Vueling down 2.5 per cent)
Revenue for the quarter up 6.7 per cent to €5,086 million, up 8.2 per cent at constant currency
Fuel unit costs for the quarter down 9.3 per cent, 5.4 per cent at constant currency
Operating profit for the half year €230 million (2013: operating loss €33 million before exceptional items), €263 million better than last year
Cash of €4,904 million at June 30, 2014 was up €1,271 million on 2013 year end
Adjusted gearing down 4 points to 46 per cent

Willie Walsh, IAG Chief Executive Officer, said:
“In the quarter, we made an operating profit of €380 million which is up from €245 million last year.

“This performance shows that we are making further solid progress. Our disciplined approach to capacity continues and we will make reductions where it makes sense as we go through the year. We are, therefore, trimming planned IAG capacity by around three percentage points for the winter 2014 season.

“All of our airlines had their highest second quarter operating result since 2007.

“British Airways’ operating profit was €332 million in the quarter, up from €247 million last year while Iberia made an operating profit of €16 million, compared to an operating loss of €35 million last year. Vueling’s operating profit was €30 million, up from €27 million last year.

“Iberia’s restructuring continues to have a positive impact and last week Iberia signed an agreement that could lead to an additional reduction of up to 1,427 jobs. This will create new opportunities for Iberia to enhance its profitability further in the next two or three years. Based on the progress made at Iberia, we’re pleased to announce today that eight Airbus A350-900s and eight Airbus A330-200s will be joining its longhaul fleet as replacement aircraft.
“In the half year, the Group made an operating profit of €230 million compared to an operating loss of €33 million last year. Revenue was up 6.7 per cent with non-fuel costs up 4.9 per cent. We have also improved our cash and adjusted gearing position since the end of last year”.

Trading outlook
At current fuel prices and foreign exchange rates, we expect to improve operating profit for the 2014 full year by at least €500 million, from a 2013 base of €770 million. Passenger unit revenues should remain relatively flat, with margin expansion driven by a reduction in unit costs.