IAG reports better-than-expected Q1 results

IAG, the owner of British Airways (BA), has reported better-than-expected results for the quarter ended March 31 this year.

The airline operators announced that losses at troubled Spanish airline Iberia nearly halved to €150 million in the January-March quarter of 2014, from losses of €278 million in the corresponding quarter of 2013. Analysts had projected losses of €162 million for the Spanish airline.

Iberia managed to settle various employee disputes on salary and work conditions, which is expected to bring the Spanish carrier back to profit. IAG said that Iberia was on track to generate an operating profit of €1.8 billion in 2015.

Announcing the results, group chief executive officer Willie Walsh said, "The performance, so far this year, has been one that has pleased us significantly given the reduction in operating losses in the first quarter. We're particularly pleased with the continued progress being made in Iberia."

IAG also reported that group passenger traffic in the January-April period of 2014 grew 5.5 per cent on a like-for-like basis, while average loadings marginally slipped 0.1 per cent at 77.7 per cent of capacity.

The company added that its cost-cutting measures would help increase its operating profits by at least €500 million this year, from the €770 million it reported last year. It expressed hope that that it would be able to meet analysts' forecasts for around €1.3 billion.

It may be noted here that IAG, like many other carrier operators, typically report losses in the conventionally weaker first three months and make the bulk of their profits in summer months of the year.