British Airways owner IAG beats profit expectations with record first quarter

The group said it continues to expect operating profit for 2017 to show year-on-year improvement

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The Independent Online

British Airways owner IAG has posted a nearly 10 per cent rise in operating profits for the first three months of the year, beating analysts forecasts during what is traditionally the weakest quarter for the group.

Operating profits before exceptional items came in at €170m (£144.6m) for the three months to 31 March – an increase of 9.7 per cent from €155m for the same period last year.

The average forecasts in a Reuter’s poll of analysts had seen an operating profit of €140m.

Total revenue for the group, which also owns Iberia in Spain and Aer Lingus in Ireland, dropped almost 3 per cent to €4.9bn, held back by the timing of Easter, which fell later this year, and the impact of a weak pound.

The impact of currency exchange was €32m in the quarter due to the translation of sterling profit into euros, according to the group.

Willie Walsh, chief executive of IAG, said: “This is a record performance in Q1, traditionally our weakest quarter, with the improving trend in passenger unit revenue continuing.

“In March we launched Level, our new longhaul low-cost airline brand, which starts flights from Barcelona to Los Angeles, San Francisco, Punta Cana and Buenos Aires in June. It’s already been extremely successful with sales running well ahead of expectations.”

Mr Walsh added that at current fuel prices and current rates, IAG expect its operating profit for 2017 to show an improvement year-on-year.