IAG first-half profits jump, sees double-digit rise in FY profit

British Airways and Iberia parent International Consolidated Airlines Group reported a 14% jump in first-half operating profit on Friday and said it expects profit for the year to rise by a double-digit percentage.

Operating profit in the six months to the end of June rose to €898m from €789m in the same period a year ago, as total revenue increased 0.9% to €10.9bn. Meanwhile, pre-tax profit came in at €706m, up 28.6%.

Passenger unit revenue per available seat kilometre slipped 2.6% to €6.50 and non-fuel costs were up 3.5% at constant currency, reflecting the impact of the power failure that hit British Airlines. The company said it forked out €65m in additional compensation fees and baggage claims related to operational disruption at BA due to the power failure over the second May bank holiday weekend.

Chief executive Willie Walsh said: The underlying trend in unit revenue improved, benefitting partially from Easter and a weak base last year.

"Non-fuel unit costs before exceptional items are up, at constant currency. These costs include the financial impact of the power failure which affected British Airways' customers."

The airline said that at current fuel prices and exchange rates, it expects its operating profit for 2017 to show a double-digit percentage improvement year-on-year. Second-half passenger unit revenue, meanwhile, is expected to show an increase versus last year at constant currency.