Currency tailwinds help lift BA owner IAG higher in first quarter

British Airways owner International Consolidated Airlines Group (IAG) reported first quarter operating profit of €280m before exceptional items on Friday, an improvement from its restated 2017 figure of €160m.

The FTSE 100 company, which also owns the carriers Iberia, Vueling, Level and Aer Lingus and has a minority shareholding in Norwegian Air Shuttle, said its net foreign exchange operating profit impact for the quarter was a favourable €58m.

Passenger unit revenue for the quarter was down 0.7%, but up 3.5% at constant currency.

Non-fuel unit costs before exceptional items for the quarter dropped 5.7%, or 0.9% at constant exchange rates, while fuel unit costs rose 0.6%, or 10.4% at constant currency.

IAG had cash of €7.44bn as at 31 March - down €53m compared to 31 March 2017 - while its adjusted net debt-to-EBITDAR ratio improved by 0.3 to 1.2x.

“We're reporting another strong quarter performance with an operating profit of €280m before exceptional items, up from €160m last year,” commented IAG CEO Willie Walsh.

“Our positive passenger unit revenue trend continued with an increase of 3.5% at constant currency,” he explained, adding that the trend “benefitted partially from the timing of Easter”.

“Non-fuel unit costs before exceptional items were down 0.9% at constant currency.”

Walsh also noted that despite higher market prices, IAG’s fuel unit costs went up by just 0.6% in euros.

“This quarter British Airways put in place a new flexible defined contribution pension scheme.

“It replaces the existing New Airways Pension Scheme (NAPS) and British Airways Retirement Plan (BARP).”