IAG, the owner of British Airways, on Friday posted a pre-tax profit from continuing operations, after exceptional items, of £186m, a significant turnaround from making a big loss last year. Total revenue grew 3.1%, despite a near 12% decline in cargo revenue. Passenger revenue grew almost 6%.
One of the reasons for the return to profitability has been the reduced losses at its Spanish airline, Iberia, and the acquisition of the budget carrier, Vueling.
Willie Walsh, IAG’s chief executive, said Britsh Airways has also benefited from cost improvements and the additional Heathrow take-off and landing slots it acquired through its 2012 takeover of the loss-making UK carrier, BMI.
British Airways made a large operating profit for the 12 months to December 31, and Iberia, while remaining in the red, reduced its losses. Vueling has made an operating profit since April.
Mr Walsh said: “In 2013, we strengthened the group by acquiring Vueling, embarking on Iberia’s transformation and enhancing British Airways’ revenue performance. This has led to a strong financial recovery and return to profitability.”
The company expects to make “steady progress” this year towards its target of generating a group operating profit of approximately £1.5bn by the end of 2015.
Willie also said “I think the report is excellent, the commission has done some really good work. The problem is political, the failure to embrace the findings of the report. I don’t see any sign that politicians have changed their view,” “I think the politicians will try to avoid this issue and they’ll be sitting here in several years debating this issue and we’ll be losing ground. The economy will suffer as a result of lack of runway capacity in general,”.
Amazingly, the last full-length runway in the South East of England was opened in 1946.