Turbulence for BA, Iberia as fuel bills rise by a third
Saturday 07 May 2011
The airline formed by the merger of Iberia and British Airways yesterday laid bare the industry's battle to combat soaring oil prices, saying its fuel costs had rocketed by nearly a third in its first quarter.
Concerns about its fuel burden overshadowed the inaugural results from International Airlines Group's (IAG). However, the company more than halved its pro-forma losses and struck an upbeat tone about its prospects, driven by plans to make annual cost savings of €400m (£354m) within five years.
IAG, which was formed in January, said its fuel bill surged by 31.9 per cent, or €266m, to €1.3bn in the quarter to 31 March. Willie Walsh, the chief executive, said: "It is a huge increase in price. [The oil price] is a real challenge not just for BA and Iberia but for the airline industry." IAG expects a fuel bill of €5.2bn for the year, up by €100m from an earlier forecast.
It has absorbed about half of the most recent spike in its fuel bill, but the remainder was passed on to customers. British Airways itself has recovered some of this increase in costs by raising its fuel surcharge three times in the past four months but IAG warned that this will be more difficult to do going forward.
IAG slashed its operating losses to €102m over the three months, compared to €238m last year. It grew revenues by 15.4 per cent to €3.64bn. The group's premium business boasted yields up 4.4 per cent, on volumes higher by 11.9 per cent. Mr Walsh said transatlantic routes had performed "very strongly".
- 1 Nigel Farage: Me vs Russell Brand on Question Time – he's got the chest hair but where are his ideas?
- 2 Harry Potter fans can apply to the Hogwarts-inspired College of Wizardry
- 3 Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
- 4 Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
- 5 Orange Wednesdays are no more
Weather bomb in pictures: Storms cuts power for tens of thousands – and snow is on the way
Jessica Chambers: 19-year-old woman 'doused with lighter fluid and burned alive' in the US
Russell Brand calls Nigel Farage 'poundshop Enoch Powell' in BBC Question Time debate
Russell Brand was rendered speechless on Question Time by this man
Fury at Airbus after it hints the super-jumbo may be mothballed
Disgruntled RBS worker writes hilarious open letter to Russell Brand after anti-capitalist publicity stunt leaves him hungry
Nigel Farage defends Kerry Smith 'ch***y' comment: 'If you are going for a Chinese, what do you say you’re going for?'
Nigel Farage's approval rating hits 'record low' as popularity suffers in wake of Ukip sex scandal
Pakistan school attack live: Taliban kill at least 132 children in 'horrifying' massacre
Sony hack: Angelina Jolie branded 'seriously out of her mind' in further embarrassing leaked email saga
Panic Saturday: 13 million Britons spend £1.2bn – while 13 million others across the country live in poverty unable to afford food
iJobs Money & Business
$200 - $350 per annum: Carlton Senior Appointments: Managing Producer Office...
$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...
Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...
Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...