British Airways owner IAG reveals profits hit by rising fuel costs as more details of cyber attack emerge

Thousands of BA customers had to cancel their cards after data breach was revealed earlier this year

Caitlin Morrison
Friday 26 October 2018 09:34 BST
BA data breach: 'Name, email, address and credit card information' stolen, says CEO

International Airlines Group, the owner of British Airways, has reported a drop in profits due to higher fuel costs, in the same week it revealed that a data breach earlier this year affected more customers than previously believed.

The Spain-based company said pre-tax profits fell 0.4 per cent to €1.42bn (£1.26bn) in the three months to September.

Operating profit rose 0.7 per cent to €1.46bn, while revenue increased by 8.5 per cent to hit €7.14bn. The group said profits had been hit by a 14.3 per cent rise in fuel costs over the quarter.

IAG chief executive said: “These were strong results despite significant fuel cost and foreign exchange headwinds.”

On Thursday, IAG revealed that a further 185,000 customers might have had their personal details stolen during a cyber attack that was first reported in September.

Thousands of BA customers had to cancel their credit cards after the airline admitted that a 15-day data hack had compromised 380,000 payments, prompting a criminal inquiry led by specialist cyber officers from the National Crime Agency.

This week, the airline group said that of the 380,000 payment card details identified, 244,000 were affected.

“While British Airways does not have conclusive evidence that the data was removed from its systems, it is taking a prudent approach in notifying potentially affected customers, advising them to contact their bank or card provider as a precaution,” IAG said.

“Since the announcement on 6 September 2018, British Airways can confirm that it has had no verified cases of fraud.”

George Salmon, equity analyst at Hargreaves Lansdown, said: “There are a few encouraging points in IAG’s results. Not only is the group adding more flights, it’s managing to fill more seats on its planes while also getting a benefit from pricing. That’s helping the top line grow smoothly.

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“The fly in the ointment is solid progress on revenues is being undone by a sharp jump in operating costs. However, that’s really just a product of rising fuel costs, which are of course well out of IAG’s control.”

If the impact of fuel prices and unfavourable currency moves are removed, Mr Salmon said, it is clear that IAG is making improvements.

However, he warned: “It shouldn’t be forgotten business and leisure travel are both sensitive to the fortunes of the wider economy. IAG remains vulnerable to any economic downturn on the back of a disorderly Brexit.”

Shares in IAG were up 2.3 per cent in early trading on Friday.

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