The owner of British Airways moved back into profit today after the business reported “huge progress” in the turnaround of Spanish carrier Iberia.
International Airlines Group (IAG), which was formed from the merger of the two airlines in 2011, posted an operating profit of €770m (£631m) last year, against the €23m loss seen a year earlier.
The company said British Airways continued its solid performance as it benefited from additional Heathrow slots and flexibility offered by the integration of bmi. BA’s profits were £651m, an improvement of £377m.
Iberia made an operating loss of €166m (£136m) but chief executive Willie Walsh said: “Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved.”
He added that recent pay and productivity agreements between Iberia and its pilot and cabin crew unions were key to reducing the airline’s costs further. Mr Walsh now expects the group to make steady progress towards its 2015 operating profit target of €1.8bn (£1.5bn), driven by falling costs.
Revenues for the year rose 3.1% to €18.7bn (£15.3bn) while fuel costs were down 2.5% to €5.95bn (£4.9bn).
Capacity increased by 5.2%, primarily in its domestic and European markets after the acquisition of Barcelona-based Vueling, which has 12 further bases in Spain and also operates out of Amsterdam, Paris, Florence and Rome.