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| Version 1 | Version 2 |
|---|---|
| BA-Iberia's International Airlines Group cuts losses | BA-Iberia's International Airlines Group cuts losses |
| (about 4 hours later) | |
| International Airlines Group has seen its losses narrow on rising revenues in the company's first results since the British Airways-Iberia merger. | International Airlines Group has seen its losses narrow on rising revenues in the company's first results since the British Airways-Iberia merger. |
| The firm lost 47m euros ($68m; £42m) in the first quarter of the year, down from a 273m euro loss a year ago. | The firm lost 47m euros ($68m; £42m) in the first quarter of the year, down from a 273m euro loss a year ago. |
| The improved result came as the airline's revenues rose 15.4% on the year as business volumes recovered, and despite a 31% jump in fuel costs. | The improved result came as the airline's revenues rose 15.4% on the year as business volumes recovered, and despite a 31% jump in fuel costs. |
| The two national flag carriers completed their merger in January. | The two national flag carriers completed their merger in January. |
| "Fuel costs remain the big challenge facing the industry," said Willie Walsh, the former BA chief executive who has stepped up to run the newly formed group, commenting on the results. | "Fuel costs remain the big challenge facing the industry," said Willie Walsh, the former BA chief executive who has stepped up to run the newly formed group, commenting on the results. |
| However, he said the firm had gone a long way in bringing down its non-fuel costs, with unit costs excluding currency changes down 7.6%. | However, he said the firm had gone a long way in bringing down its non-fuel costs, with unit costs excluding currency changes down 7.6%. |
| "The continued focus on cost control has been achieved while we have seen some measured increases in capacity," he said. | "The continued focus on cost control has been achieved while we have seen some measured increases in capacity," he said. |
| "We have been able to increase capacity without additional aircraft and employees." | "We have been able to increase capacity without additional aircraft and employees." |
| Middle East unrest | Middle East unrest |
| The results were better than expected. International Airlines Group reported an operating loss of 102m euros, whereas analysts had anticipated a number closer to 125m euros. | The results were better than expected. International Airlines Group reported an operating loss of 102m euros, whereas analysts had anticipated a number closer to 125m euros. |
| IAG's share price rallied 2% in morning trading in London, despite a broader market sell-off prompted by general fears over the health of the global economy that saw further falls in commodity prices. | |
| Passenger numbers at the group were up a modest 3.2%, but passenger revenues jumped 15% as customers spent more and a larger proportion went for higher class seats. | |
| The firm's cargo business also picked up strongly, with tonnage up 9% and revenues 25% higher. | The firm's cargo business also picked up strongly, with tonnage up 9% and revenues 25% higher. |
| Looking ahead, the firm said that it expected business for the year to suffer to the tune of 90m-100m euros because of the Japan earthquake and the civil unrest in North Africa and the Middle East. | Looking ahead, the firm said that it expected business for the year to suffer to the tune of 90m-100m euros because of the Japan earthquake and the civil unrest in North Africa and the Middle East. |
| The airline also said it expected higher fuel prices to cost it 100m euros more than previously thought. | The airline also said it expected higher fuel prices to cost it 100m euros more than previously thought. |
| However, crude oil prices fell sharply in world markets on Thursday, just before the results were released. | However, crude oil prices fell sharply in world markets on Thursday, just before the results were released. |
| The airline also flagged up continued tough competition in the European short-haul market, but added that its long-haul business was "stable, with strength in the premium sector". | |
| The challenges ahead are still numerous, according to Keith Bowman, equity analyst at stockbrokers Hargreaves Lansdowne. | |
| "Fuel costs remain elevated, acts of terrorism have raised the cost of security, whilst geopolitical tensions and upheaval in the Middle East provide uncertainty over safety and passengers' desire to travel," he said. | |
| "The sell-off in oil over recent days poses its own dilemma, with the benefits of lower fuel costs weighed against the potential danger signals which a lower oil price sends, given its implied barometer status for the health of the global economy." |