British Airways, Iberia parent body reports profits for H1

International Consolidated Airlines Group (IAG), the holding company of merged carriers British Airways and Spain's Iberia, said it expects significant growth in operating profit for the year, after swinging into profit in the first half.

Chief executive Willie Walsh said, "IAG is on target to deliver its year one synergies."

The Group also said the European economic outlook remained uncertain and the company's short-haul network remained under pressure in a highly competitive environment, especially from low-cost carriers.

Operating profits for the full year will dip between $128.50 million to $142.78 million because of the nuclear disaster in Japan and political upheavals in North Africa and the Middle East.

IAG, the third-largest airline group in Europe after Air France-KLM and Lufthansa, swung to a pre-tax profit of $55.68 million for the six months to end-June, after registering a $588.23 million loss a year ago on a pro-rata basis.

Revenue was up 17.9 per cent to $11.09 billion. It posted an operating profit, before $79.95 million of exceptional items, of $125.64 million from a $441.18 million loss a year earlier.

The previous year's results were affected by disruptions from volcanic ash clouds and industrial action at BA.

Fuel costs for the six months rose 34.8 per cent to $3.48 billion. It achieved 50 per cent recovery of fuel costs during the first-half through revenue initiatives, but said this would become "progressively harder" through the year.