IAG profits fall as fuel prices rise and currency exchanges prove difficult.

Photo British Airways

The International Airlines Group has released its April 2019 and year to date figures this week, which demonstrated some good positive results, including a 24% increase in passengers on Latin America and Caribbean routes. 

The group also released its first-quarter results,  showing a fall in profits while fuel prices rose, by over 15% affecting the group's bottom line.  

First quarter operating profit €135 million before exceptional items (2018 €340 million), passenger unit revenue for the quarter down 0.8 % down 1.4. Non-fuel unit costs before exceptional items for the quarter up 0.8 per cent, fuel unit costs for the quarter up 15.8%, up 11.1 % at constant currency

Cash of €7,481 million at March 31, 2019, was up €1,207 million on December 31, 2018 and net debt to EBITDA improved by 0.2 to 1.0 times.  Profit after tax before exceptional items €70 million down 62.6 per cent, and adjusted earnings per share down 57.5 % on a pro forma basis.

Willie Walsh, IAG Chief Executive Officer, said: “In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of €135 million.

 “At constant currency, non-fuel unit costs were down 0.6 per cent while passenger unit revenue decreased by 1.4%.”

Performance summary:

	Three months to March 31
	Statutory		Pro forma		Statutory
Highlights € million	2019		20181	Higher / (lower)	2019	20182
Passenger revenue	4,646		4,415	5.2 %	4,646	4,415
Total revenue	5,318		5,022	5.9 %	5,318	5,022
Operating profit before exceptional items	135		340	(60.3)%	135	280
Exceptional items	-		639	(100.0)%	-	639
Operating profit after exceptional items	135		979	(86.2)%	135	919
Available seat kilometres (ASK million)	75,423		71,093	6.1 %
Passenger revenue per ASK (€ cents)	6.16		6.21	(0.8)%
Non-fuel costs per ASK (€ cents)	5.06		5.02	0.8 %
Alternative performance measures	2019		20181	Higher / (lower)
Profit after tax before exceptional items (€ million)	70		187	(62.6)%
Adjusted earnings per share (€ cents)	3.7		8.7	(57.5)%
Net debt (€ million)3,4	5,225		6,430	(18.7)%
Net debt to EBITDA3,4	1.0		1.2	(0.2x)
Statutory results € million	2019		2018	Higher / (lower)
Profit after tax and exceptional items	70		794	(91.2)%
Basic earnings per share (€ cents)	3.7		38.5	(90.4)%
Cash and interest-bearing deposits	7,481		7,442	0.5 %
Interest-bearing long-term borrowings	12,706		6,953	82.7 %
For definitions refer to the IAG Annual report and accounts 2018.

April 2019 and year to date results

IAG traffic in April, measured in revenue passenger kilometres, increased by 7.7 per cent versus the same period last year; IAG capacity measured in available seat kilometres rose by 5.8 per cent versus the same period last year. Group performance Month of April Year to date 2019 2018 yoy 2019 2018 yoy Passengers carried (’000s) 9,852 9,183 7.3% 34,234 32,137 6.5% Domestic 2,323 2,181 6.5% 8,244 7,739 6.5% Europe 5,232 4,929 6.1% 17,638 16,699 5.6% North America 1,064 1,007 5.7% 3,546 3,326 6.6% Latin America & Caribbean 502 405 24.0% 1,977 1,653 19.6% Africa, Middle East & S,Asia 523 476 9.9% 2,044 1,991 2.7% Asia Pacific 208 185 12.4% 785 729 7.7% Revenue passenger km (m) 23,443 21,759 7.7% 84,321 78,979 6.8% Domestic 1,687 1,540 9.5% 6,018 5,495 9.5% Europe 5,967 5,662 5.4% 19,518 18,675 4.5% North America 6,998 6,713 4.2% 23,548 22,222 6.0% Latin America & Caribbean 4,128 3,498 18.0% 16,310 14,114 15.6% Africa, Middle East & S,Asia 2,665 2,492 6.9% 11,384 11,122 2.4% Asia Pacific 1,998 1,854 7.8% 7,543 7,351 2.6% Available seat km (m) 28,103 26,561 5.8% 103,526 97,654 6.0% Domestic 1,963 1,836 6.9% 7,124 6,709 6.2% Europe 7,371 6,898 6.9% 24,445 23,386 4.5% North America 8,495 8,416 0.9% 29,923 28,648 4.5% Latin America & Caribbean 4,805 4,110 16.9% 19,164 16,470 16.4% Africa, Middle East & S,Asia 3,108 3,061 1.5% 13,807 13,639 1.2% Asia Pacific 2,361 2,240 5.4% 9,063 8,802 3.0% Passenger load factor (%) 83.4 81.9 +1.5 pts 81.4 80.9 +0.5 pts Domestic 85.9 83.9 +2.0 pts 84.5 81.9 +2.6 pts Europe 81.0 82.1 -1.1 pts 79.8 79.9 -0.1 pts North America 82.4 79.8 +2.6 pts 78.7 77.6 +1.1 pts Latin America & Caribbean 85.9 85.1 +0.8 pts 85.1 85.7 -0.6 pts Africa, Middle East & S,Asia 85.7 81.4 +4.3 pts 82.5 81.5 +1.0 pts Asia Pacific 84.6 82.8 +1.8 pts 83.2 83.5 -0.3 pts Cargo tonne km (m) 471 480 -1.9% 1,862 1,836 1.4% * Domestic includes routes within UK, Spain, Ireland and Italy * Group figures include Openskies in 2018 Photo British Airways   Strategic developments In April, British Airways opened its new Club lounge at New York’s JFK airport Terminal 7. It completes a £50 million investment following the unveiling of a new space for First customers in autumn last year.     Performance by airline Month of April Year to date 2019 2018 yoy 2019 2018 yoy Aer Lingus Passengers carried (’000s) 997 915 9.0% 3,193 2,958 7.9% Revenue passenger km (m) 2,072 1,842 12.5% 6,327 5,645 12.1% Available seat km (m) 2,580 2,437 5.9% 8,384 7,520 11.5% Passenger load factor (%) 80.3 75.6 +4.7 pts 75.5 75.1 +0.4 pts Cargo tonne km (m) 15 15 0.0% 54 52 3.8% British Airways Passengers carried (’000s) 4,007 3,855 3.9% 14,479 14,027 3.2% Revenue passenger km (m) 12,897 12,400 4.0% 47,772 46,608 2.5% Available seat km (m) 15,618 15,301 2.1% 59,451 58,492 1.6% Passenger load factor (%) 82.6 81.0 +1.6 pts 80.4 79.7 +0.7 pts Cargo tonne km (m) 362 371 -2.4% 1,424 1,427 -0.2% Iberia Passengers carried (’000s) 1,817 1,711 6.2% 6,763 6,258 8.1% Revenue passenger km (m) 5,093 4,610 10.5% 19,059 17,153 11.1% Available seat km (m) 5,811 5,350 8.6% 22,236 20,129 10.5% Passenger load factor (%) 87.6 86.2 +1.4 pts 85.7 85.2 +0.5 pts Cargo tonne km (m) 93 93 0.0% 380 356 6.7% Level Passengers carried (’000s) 152 24 533.3% 441 88 401.1% Revenue passenger km (m) 584 226 158.4% 2,111 824 156.2% Available seat km (m) 732 249 194.0% 2,650 932 184.3% Passenger load factor (%) 79.8 90.8 -11.0 pts 79.7 88.4 -8.7 pts Cargo tonne km (m) 1 1 0.0% 4 1 300.0% Vueling Passengers carried (’000s) 2,879 2,669 7.9% 9,358 8,772 6.7% Revenue passenger km (m) 2,797 2,630 6.3% 9,052 8,549 5.9% Available seat km (m) 3,362 3,165 6.2% 10,805 10,323 4.7% Passenger load factor (%) 83.2 83.1 +0.1 pts 83.8 82.8 +1.0 pts Cargo tonne km (m) n/a n/a n/a n/a n/a n/a * British Airways includes BA CityFlyer; Iberia includes Iberia Express; LEVEL includes Spain, France and Austria * British Airways figures exclude Openskies in 2018

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