£211 loss for BA owner International Airlines Group

Rising fuel costs and the impact of Spain's economic crisis left the owner of British Airways and Iberia nursing big quarterly losses today.

International Airlines Group was also hit by industrial action by pilots at Iberia as it recorded losses of 263 million euro (£211 million) for the three months to March 31, against a deficit of 47 million euro a year earlier.

Strong demand in London and for transatlantic travel lifted revenues at British Airways but the airline's mounting fuel bill meant its operating losses widened to £62 million from £5 million last time.

Iberia's operating loss of 170 million euro (£136.3 million) reflected the airline's worsening performance from its Madrid hub and the strike action, which cost 25 million euro (£20 million) in the quarter but has now been called off.

Fuel costs for the group were up by 25 per cent on a year earlier to 1.4 billion euro (£1.1 billion) and at current levels are on track to increase by more than one billion euro (£802 million) in this financial year.

IAG also highlighted the impact of government taxes, with the UK increasing air passenger duty by double the inflation rate and Spain announcing plans to increase departure taxes by up to 10 euro (£8) per passenger.

The group, which recently acquired BMI, said it now expected to break even for the financial year.

PA