The owner of British Airways International Airlines Group (IAG) has posted higher than expected profits for the year ending 2015, Its put down to marginally cheaper fuel prices and increased customer demand and contributions from acquisitions.
Fuel accounts for some 30 per cent of overall operating costs, IAG buy fuel 3 years forward so recent fuel price drop will not be realised for some while, perversely the US dollar was strong against the Euro and Sterling during this period. So that dampened results, although they stand at a year-on-year increase of 125% !!
IAG , which includes British Airways, Aer Lingus, Iberia, and other brands, reported an operating profit before exceptional items of €2.34bn (£1.84bn) last year – a year-on-year increase of 125 per cent. The firm predicted an operating profit of €2.29bn for the year, so easily beat that target.
Profits were marginally helped by the falling price of oil and gas, and fixed for three years ahead, which led to a 17.2 per cent reduction in fuel unit costs over the course of the year. Passenger unit revenue eased by 3.5 per cent and non-fuel unit costs were down 3.9 per cent in the 12 months to 31 December 2015.
IAG CEO Willie Walsh commented: "These results are in line with our recent target and have exceeded our original 2015 operating profit target of €1.5bn that we set in 2011.
“It's undoubtedly been a good year but it's also been challenging with extreme volatility in the currency and fuel markets. The benefits gained from lower fuel prices have been partially offset by the stronger US dollar.”
He added that the board is proposing a final dividend to shareholders of €0.10 per share, which will bring the full year dividend to €0.20 per share, subject to shareholder approval at the AGM in June.
Shares fell 1.8 per cent to 548p in early trading.
Speaking later to the BBC,l on the EU Referendum, Willie Walsh, IAG's chief executive said he didn't think it would make much difference one way or the other to his business: "We've undertaken a risk analysis and we don't believe a vote will have a material impact on our business."
He also repeated his previous view on the chances of a third runway at Heathrow, saying he did not think one would be built because the government continued to delay decision making.
JULIAN BRAY +44(0)1733 345581 Aviation Expert, Journalist & Broadcaster, Aviation Security & Airline Operations Expert, Travel / Maritime & Cruise Industry, NUJ, EQUITY, LIVE ISDN LINK, Broadcast ISDN COOBE ++44 (0)1733 345020 e&oe Old faithful NOKIA: 07944 217476 www.aviationcomment.com
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