INTERNATIONAL AIRLINES GROUP (IAG), the parent group of British Airways and Spanish carrier Iberia, reported on Friday (10) a collapse in first-quarter net profit amid soaring fuel costs and fierce competition.
Profit after tax nosedived 91 per cent to just €70 million in the first three months of the year from €794m in the first quarter of 2018, IAG revealed in a results statement.
Fuel costs rose 15.8 per cent in the reporting period and revenues were up nearly six per cent to €5.3 billion.
A key industry measure of performance, passenger unit revenue per available seat kilometre, slid 0.8 per cent on the back of increased market capacity.
Demand was also dented by the later timing of Easter compared with 2018.
IAG, which also owns Irish airline Aer Lingus, added that operating profit before exceptional items slid 60 per cent to €135m.
Chief executive Willie Walsh said: “In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable.”
The airline repeated that it expects operating profit to be flat in 2019, owing partly to the high cost of kerosene or jet fuel.
The IAG results came one week after Dutch-French carrier Air France-KLM logged deepening first-quarter net losses as it also buckled under the pressure of higher fuel costs and competition.