IAG, the parent company of British Airways, has recorded a first-quarter profit for the first time, helped by lower fuel costs and a strong performance in North America.
In a trading update, IAG said it had turned a €150m (£109m) loss in the first three months of 2014 into an operating profit of €25m for the same period this year.
The result beats analysts’ forecasts and is the first time the group, formed in 2011 through BA’s merger with the Spanish airline Iberia, has made a profit in the quietest period for European airlines.
A €3m loss had been predicted, according to Reuters. IAG shares rose 3.4% in early trading.
Fuel costs fell 11% excluding currency fluctuations, while non-fuel costs also dropped. IAG stuck to its forecast of more than €2.2bn operating profit for the year and said the rate of improvement would slow in the second quarter because of the timing of Easter and higher fuel prices.
BA and Iberia formed IAG to compete with bigger airlines and buy up smaller operators. The company also owns the Spanish budget carrier Vueling and wants to buy Aer Lingus.
Willie Walsh, IAG’s chief executive, said: “This is IAG’s first ever quarter-one operating profit in what is traditionally the weakest quarter of the year. There was a strong improvement both at a group level and with all three airlines.
“In particular, there was a consistent positive performance in our key North American market. Fuel costs benefited by operating more efficient aircraft and lower fuel prices though hedging and significant currency headwinds reduced the positive impact of lower oil prices.”
This article was written by Sean Farrell, for theguardian.com on Thursday 30th April 2015 10.07 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010