IAG 2015 profit comes in at top end, sees more growth this year
LONDON – British Airways-owner International Airlines Group reported a 65 percent rise in annual profit, at the top end of guidance, and said profit would grow by a similar 910 million euros this year, helped by the lower oil price.
For 2015, IAG, whose portfolio of airlines also includes Iberia, Vueling and Aer Lingus, posted operating profit of 2.3 billion euros ($2.5 billion), the highest end of its 2.25 billion euros to 2.3 billion euros forecast.
Profit was boosted by strong demand for summer travel and cheaper fuel, and the group also reduced costs through renegotiating contracts with suppliers and consolidating some back-office operations.
IAG said this year it expected to grow profit by 910 million euros again, putting it on course to post a result of 3.2 billion euros, slightly ahead of a current 3.1 billion euro analyst forecast.
Like many European airlines, IAG is expected to be helped by an oil price which has almost halved over the past 12 months. A pre-existing fuel hedging strategy has stopped all of the benefits of lower prices being fully felt to date.
The challenge for IAG will be to retain all of the hold onto the benefits of cheaper fuel amid pressure on ticket prices as operators like budget airline Ryanair (RYA.I) slash fares. -Reuters