IAG profit up 9.7pc to US$1 billion, but IAG Cargo earnings fall 7pc

IAG profit up 9.7pc to US$1 billion, but IAG Cargo earnings fall 7pc

INTERNATIONAL Consolidated Airlines Group’s (IAG) third quarter net profit increased 9.7 per cent year on year to EUR930 million (US$1 billion) drawn on revenues of EUR6.5 billion, down four per cent.

Meanwhile, IAG Cargo reported third quarter revenue of EUR240 million, down seven per cent year on year.

IAG encompasses Irish flag carrier Aer Lingus, British Airways, Spain’s flag carrier Iberia and Spanish low-cost carrier (LCC) Vueling.

IAG’s combined quarterly cargo revenue was EUR240 million, down seven per cent while passenger revenue fell 5.4 per cent to EUR5.8 billion.

“Yields decreased at British Airways and Iberia with continued fare pressure on oil related routes and lower demand from economic uncertainty related to the UK referendum vote,” IAG said.

The group’s third quarter operating profit came to EUR1.2 billion, down 4.9 per cent. “While strong, these results were affected by a tough operating environment with a negative currency impact of EUR162 million, due to sterling’s weakness, and continued disruption due to air traffic control strikes,” said IAG chief executive Willie Walsh.

Combined traffic for the IAG airlines increased 9.4 per cent year on year during the third quarter to 71.4 billion RPKs.

Combined capacity grew 9.6 per cent to 83.4 billion ASKs.

IAG Cargo chief Drew Crawley recalled withdrawing the companies fleet of freighters, “This has enabled us to offset some of the yield pressures and grow our revenue share in these challenging market conditions,” he said.

“Last month, we announced a EUR5 million investment in a new premium facility at London Heathrow. On October 3 we also launched a new emergency solutions product, Critical, which has already been well received by customers across our network.

“We have also continued to launch new routes this quarter. Tehran commenced operation on September 1, and just last week we announced a new service to New Orleans, making us the first carrier to directly connect London to Louisiana,” Mr Crawley said.

“In October, IAG Cargo launched its accelerator programme, Hangar 51, an “initiative that will find and scale some of the best aviation and logistics tech start-ups who will help us digitise our business”.

Said Mr Crawley: “This is something the cargo industry has long overlooked and I am excited to see how we can make IAG Cargo a leader in this area.”

IAG Cargo is the single business created following the merger of British Airways World Cargo and Iberia Cargo in April 2011. Following the integration of additional airlines into the business, including Aer Lingus, bmi and Vueling, IAG Cargo now covers a network of over 350 destinations.

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