British Airways owner IAG upgrades profit guidance after strong third quarter
- Credit: PA
British Airways owner International Airlines Group (IAG) upgraded its annual guidance after growing passenger numbers and lower fuel costs led to strong third quarter results.
IAG, which in August added Ireland’s Aer Lingus to its stable of airlines, said that its full-year operating profit would range from 2.25 billion euro (£1.6 billion) and 2.3 billion euro (£1.7 billion), having previously forecast 2.2 billion euro (£1.6 billion).
The group said that, excluding Aer Lingus, it posted a third-quarter operating profit of 1.21 billion euro (£869 million), beating analysts forecasts of 1.19 billion euro (£855 million).
The group, which also includes Iberia and Vueling airlines, said in its third quarter to the end of September passenger unit revenue lifted by 6.5% and fuel costs fell by 8.6%, compared to a year ago.
The price of crude oil has fallen by more than half since last summer to around 49 US dollars (£32) a barrel due to a production glut.
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Germany’s Lufthansa and Air France-KLM also both reported better than expected quarterly results earlier this week.
IAG chief executive Willie Walsh said: “We’re reporting strong quarter results with a positive contribution from all of our airlines.
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“Our passenger unit revenue showed a better trend than in the second quarter of the year and our cost performance remained strong.”
Analysts at Liberum said: “The figures provide further evidence of IAG’s outperformance of its network carrier peers.”
However, shares in IAG fell around 5% in early trading, with brokers citing profit-taking in an industry which is notoriously cyclical.
In August IAG agreed a takeover of Aer Lingus in a deal valuing the Irish carrier at 1.4 billion euro (£1 billion) - after gaining agreement from the Irish government and Ryanair, which both have major stakes.