British Airways-owner International Airlines Group said on Friday its seasonal first-quarter loss narrowed by 46 per cent, beating an consensus forecast, as a turnaround at its Iberia unit started to take effect.
The company posted an operating loss before exceptional items of €150 million in the three months to March 31st, compared to the €278 million loss it made in the year earlier period, and against analyst expectations for a loss of €162 million 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 €500 million from the €770 million 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 €5 million and €30 million respectively, adding that Vueling, its low-cost carrier, had kept losses flat while growing capacity.
Reuters