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Profits soar at BA owner IAG as fuel costs fall Profits soar at BA owner IAG as fuel costs fall
(35 minutes later)
British Airways’ parent company IAG saw its full-year profits soar 64% in 2015 to €1.8bn (£1.4bn), helped in part by falling fuel prices.British Airways’ parent company IAG saw its full-year profits soar 64% in 2015 to €1.8bn (£1.4bn), helped in part by falling fuel prices.
The group, which consists of Iberia, Vueling and the recent addition of Aer Lingus as well as BA, said it expected to drive up operating profits by around another billion euros in 2016. The group, which consists of Iberia, Vueling and the recent addition of Aer Lingus as well as BA, said it expected to drive up operating profits by about another €1bn in 2016.
Chief executive Willie Walsh said the results far exceeded the targets originally set in 2011 when BA merged with Iberia.Chief executive Willie Walsh said the results far exceeded the targets originally set in 2011 when BA merged with Iberia.
He said: “It’s undoubtedly been a good year but it’s also been challenging with extreme volatility in the currency and fuel markets. The benefits gained from lower fuel prices have been partially offset by the stronger US dollar.”He said: “It’s undoubtedly been a good year but it’s also been challenging with extreme volatility in the currency and fuel markets. The benefits gained from lower fuel prices have been partially offset by the stronger US dollar.”
Fuel unit costs - calculated by distance and seats flown - have dropped 17%, he said, after the impact of hedging. Fuel unit costs – calculated by distance and seats flown – have dropped 17%, he said, after the impact of hedging.
Walsh said that the British EU referendum would not affect IAG: “We have conducted a risk analysis of a decision to leave the EU and we don’t asee any material risk to our business.” Walsh said the British EU referendum would not affect IAG: “We have conducted a risk analysis of a decision to leave the EU and we don’t see any material risk to our business.”
He added: “We’re a global business and have global ambition. It’s not going to alter how we look at the world.”He added: “We’re a global business and have global ambition. It’s not going to alter how we look at the world.”
While he said IAG acknowledged that consumers had benefited from open aviation in the EU, “We think there is unlikely to be an impact on fares.”While he said IAG acknowledged that consumers had benefited from open aviation in the EU, “We think there is unlikely to be an impact on fares.”
He said that IAG would not, unlike Ryanair, be taking a stance on the vote: “We believe this is a position best determined by the electorate and we’re not giving advice.”He said that IAG would not, unlike Ryanair, be taking a stance on the vote: “We believe this is a position best determined by the electorate and we’re not giving advice.”
However, Walsh said he himself was for Europe but believed it needed to be reformed. “I am pro Europe from a personal point of view - and I am Irish and see the benefits that it has brought. However, Walsh said he himself was for Europe but believed it needed to be reformed. “I am pro-Europe from a personal point of view – and I am Irish and see the benefits that it has brought.
“But I have significant experience of dealing with the European commission for business and Europe needs to be reformed, definitely - the concept of being part of trading area is a positive one, but it needs to change.“ “But I have significant experience of dealing with the European commission for business and Europe needs to be reformed, definitely – the concept of being part of a trading area is a positive one, but it needs to change.“
Meanwhile, Walsh repeated his warning to the new Canadian owners of London City Airport that they should not look to raise landing charges following their £2bn acquisition from GIP: “I’m only concerned [by the deal] if they put up their prices - and they should be concerned that we won’t operate so many flights from City. Meanwhile, Walsh repeated his warning to the new Canadian owners of London City airport that they should not look to raise landing charges following their £2bn acquisition from GIP: “I’m only concerned [by the deal] if they put up their prices – and they should be concerned that we won’t operate so many flights from City.
“If they are looking to make a return on their investment they should not rely on us having the same amount of activity ... We’re not a captured customer, and our customers are very clear they have choices too.”“If they are looking to make a return on their investment they should not rely on us having the same amount of activity ... We’re not a captured customer, and our customers are very clear they have choices too.”
IAG announced that Javier Sánchez-Prieto has become the new chairman and chief executive of Vueling, replacing Alex Cruz, who will become chairman and chief executive of BA in April, replacing Keith Williams in charge of the British flag-carrier.IAG announced that Javier Sánchez-Prieto has become the new chairman and chief executive of Vueling, replacing Alex Cruz, who will become chairman and chief executive of BA in April, replacing Keith Williams in charge of the British flag-carrier.