Strong demand on transatlantic routes boosted profits at British Airways owner International Airlines Group today, despite another jump in fuel costs.
The company - formed from BA’s merger with Iberia last year - saw profits jump to 503m euros (£426m) from 84m euros a year earlier after passenger revenues increased 11% to 13.6bn euros (£11.5bn).
IAG said fuel costs were up by nearly 30% in 2011 to 5.1bn euros (£4.3bn) and that at current prices it expects the bill will rise this year by a further one billion euros (£850m).
It also warned that BA’s performance this summer may be impacted by the Olympics, with past experience suggesting that demand could be dampened.
The group added that ongoing developments in the eurozone will be a major factor in its growth this year, especially for its Iberia operation.
However, it said demand in London remained strong, with the encouraging trends seen in the second half of last year continuing in long-haul premium cabins, particularly on North Atlantic routes.
British Airways paid almost £500m in air passenger duty last year and IAG warned that a further 8% rise due in April will limit the number of new jobs it will be able to create this year.