International Airlines Group (IAG) has posted a strong profit for the opening months of 2015.
The organisation, which includes the likes of British Airways and Iberia, announced a €25 million (£18 million) operating profit for the January to March period. It is a significant improvement on the loss of €150 million recorded at the same time last year. Officials explained that the results were boosted by lower costs and a reduction fuel prices.
In IAG's latest trading update, it stated that revenue for the period was up 12 per cent and was up to €4.7 billion with a 3.7 per cent constant currency rate. Passenger unit revenue had increased by 6.9 per cent while fuel unit costs had fallen by 4.5 per cent.
The company explained that should fuel prices and exchange rate remain at their current level then it expects to make an operating profit in excess of €2.2 billion by the end of the year. It remains to be seen whether Easter will boost figures for the second quarter.
Willie Walsh, IAG chief executive officer, said: "IAG made an operating profit of €25 million compared to a €150 million operating loss last year. This is IAG's first ever quarter 1 operating profit in what is traditionally the weakest quarter of the year. There was a strong improvement both at a Group level and with all three airlines."
Aer Lingus takeover in the air
IAG has long been in negotiations to purchase Irish carrier Aer Lingus. The deal is currently in limbo as the Irish government has stalled on its decision to grant the British Airways owner a 25 per cent stake in the company.
The acquisition is in regards to Aer Lingus' prominence at Heathrow Airport. Only British Airways, Lufthansa and Virgin Atlantic has more take-off and landing slots at London's largest airport than Aer Lingus and IAG wants to tap into this.
IAG made no comment on its attempt to buy the firm.
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.