BA profits soar despite foreign exchange rate impact and surge in fuel prices

Fuel costs rose 30 per cent last year, and the company was also hit by net foreign exchange impact of €129m 

Caitlin Morrison
Thursday 28 February 2019 09:48 GMT
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The owner of British Airways reported a jump in sales and profits for 2018, despite challenges including higher fuel costs and the negative impact of foreign exchange rates.

International Consolidated Airlines Group (IAG) posted a 6.7 per cent increase in revenue, from €22.9bn (£19.6bn) to €24.4bn, while pre-tax profit increased by 11.2 per cent, rising from €2bn to €2.9bn.

The company said the improved numbers came in spite of a jump in fuel costs, which were up 30 per cent over the year. IAG was also hit by a net foreign exchange impact of €129m in 2018.

The group said it was continuing to “evaluate and prepare for the potential changes following the UK’s decision to leave the EU”.

“As we move into 2019, there is continued political uncertainty, fuel-price volatility and the ongoing risk of impact to our operations and reputation as the frequency, nature and sophistication of cyberattacks increases,” IAG said.

Chief executive Willie Walsh told the BBC on Thursday: “There are issues from Brexit that we need to address, but these are issues that the industry at large – and certainly IAG – can address without too much concern.”

He added: “We remain confident that there will be a comprehensive air transport agreement between the EU and the UK. If you go back a year, people were saying, ‘will we be able to fly at all?’ I dismissed all of that and I think I’ve been proven correct.”

Earlier this month, IAG placed a limit on non-EU shareholders, but said UK residents would be treated in the same way as those from the EU even after Brexit.

Mr Walsh said: “This is nothing to do with Brexit. It’s actually been in our articles since we created IAG back in 2011. It was in all of the merger documentation that we issued to shareholders and was approved by shareholders.”

Shares in IAG rose 2.4 per cent in early trading.

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