British Airways parent company IAG group has managed to increase revenue from passengers despite intense competition in the industry, but operating profits have been pushed lower by the rising fuel costs, AFP reported on Sunday, August 4th.
While net profits fell to 806 million euros ($894 million), that was entirely due to an exceptional gain that the operator of airlines including Aer Lingus, Iberia and Veuling had booked last year.
Operating profits have slid, dropping 145 million euros from the same period last year to 1.1 billion, due in part to a 20.5% jump in IAG's fuel costs and failure to profit from hedging operations.
Despite the rising competition in the airline industry, IAG managed to increase passenger numbers by six% and managed to take in slightly more revenue from them per kilometres flown.
IAG said that at current fuel prices and exchange rates it expects 2019 annual operating profits to be similar to the 3.2 billion euros generated in 2018. Moreover, IAG's shares shot 3.4% higher in London in morning trading, while the FTSE 100 index was down 1.7%.
Late last year, IAG reported an unexpected profit increase as strong demand in Europe helped shield it from rising fuel prices that have hit the industry, according to Reuters.