British Airways parent International Airlines Group (IAG) warned fuel costs are the “big challenge” facing airlines as it revealed a fall in first-quarter operating losses.
Formed from the merger of BA and Iberia in December, IAG reported its operating loss more than halved to €102 million from €238 million in the combined pro forma results for the same quarter last year.
The pre-tax loss for the three months to the end of March came in at €47 million, down from €273 million a year earlier, helped by a rise in high-yield business travel.
It was achieved despite fuel costs rising by 31%, from €862 million to €1.128 billion, year on year.
IAG chief executive Willie Walsh said: “These first-ever IAG results show an improved performance compared to last year. Revenue is up due to increased volumes, particularly in premium cabins, and improved yields which also showed good premium growth.
“We have also achieved a significant reduction in controllable costs, with unit costs excluding fuel down 5.2%. At constant currency rates, unit costs are down 7.6%." Walsh said supplier and employee costs were both down by 4.7%.
He added: “The continued focus on cost control has been achieved while we have seen some measured increases in capacity.
“We have been able to increase capacity without additional aircraft and employees, highlighting the good work that has been done in previous years.”
However, Walsh added: “Fuel costs remain the big challenge facing the industry. We have seen a 31% rise in the quarter and, on a unit cost basis, fuel is up 20.1%."
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