British Airways parent IAG posts profit rise
Published: Feb 26, 2016 3:01 a.m. ET
By
ROBERT
WALL
LONDON--British Airways parent International Consolidated Airlines Group SA reported a 77% rise in full-year profit and should see further gains in 2016 on a sharp drop in fuel costs and improved operational performance.
Net income in the year in which IAG bought Irish carrier Aer Lingus rose to EUR1.54 billion ($1.7 billion) from EUR1 billion a year earlier, after sales advanced 13% to EUR22.9 billion.
The company's closely watched operating profit, excluding Aer Lingus, was EUR2.3 billion compared with guidance of EUR2.25 billion to EUR2.3 billion, the London-based airline said. Including the Irish carrier operating profit rose to EUR2.34 billion.
Fuel is among the airline industry's biggest costs, so the plunge in oil costs since mid-2014 has driven the industry to deliver record profits. IAG also benefited from deep restructuring measures at its Spanish unit Iberia and strong travel demand on key routes such as on trans-Atlantic flights.
"It's undoubtedly been a good year but it's also been challenging with extreme volatility in the currency and fuel markets," said Chief Executive Willie Walsh. The strong dollar has offset some of the benefit of lower fuel, he said.
Operating profit, which rose about EUR1 billion last year, should rise a similar amount in 2016, the airline said.
IAG proposed a 20 cent dividend per share for the full year.
The airline also announced that Javier Sánchez-Prieto would become chairman and CEO of Spanish budget unit Vueling, replacing Alex Cruz, who the company last year said would take over as chief of British Airways. Mr. Sánchez-Prieto is currently Iberia's chief financial officer.
Write to Robert Wall at
robert.wall@wsj.com