Cheaper fuel helps profits soar at British Airways owner IAG despite major IT failure in May
- Credit: PA
British Airways owner IAG has reported a surge in profits, despite taking a hit from a major IT failure that caused travel chaos for tens of thousands of passengers in May.
International Airlines Group (IAG) said operating profit before exceptional items rose 37% to 975 million euros (£871 million) in the six months to June 30 as it was helped by lower fuel costs and a strong Easter.
Revenue edged up 0.9% to 10.9 billion euros (£9.7 billion).
IAG also said it doled out 65 million euros (£58 million) in additional compensation fees and baggage claims related to the IT meltdown over the spring bank holiday weekend.
Boss Willie Walsh said: “We’re reporting a very strong performance in quarter two.
“The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year.”
The firm also was forced to stomach 44 million euros (£39.3 million) hit from the collapse in the value of the Brexit-hit pound.
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IAG issued a profit warning after the referendum on June 23, and in October warned that ticket prices may have to rise as a result of sterling’s slump.
In March, the group, which also owns the Aer Lingus and Iberia airlines, launched Level, a new long-haul, low-cost airline brand.
Mr Walsh said Level was proving a success and the group plans to expand the operation.
“In June, Level started long-haul flights from Barcelona to four destinations. Sales continue to be well ahead of our expectations. We’ve ordered three additional aircraft and are considering other European bases for the operation.”