BA owner IAG's profits hit by weak pound
- Author: Zachary Reyes Feb 25, 2017,
Feb 25, 2017, 4:26
Aer Lingus saw its operating profits soar by nearly double in 2016, as parent company International Airlines Group (IAG) announced a 8.6% rise in its own annual operating profits.
Aer Lingus was purchased by airline conglomerate IAG in 2015 and the group reported that capacity on Aer Lingus increased by 9.6pc past year.
International Airlines Group has reported pre-tax profits of €2.5 billion before exceptional items for the year to December 31st, 2016.
Total revenue was up 2.8% to €1.78bn.
The company, which also owns airlines Aer Lingus and Iberia, said it had benefitted from a 20 per cent fall to €4.9bn (£4.1bn) for fuel, oil and emissions costs.
Although the weak pound hit profits, IAG had continued to make good progress, according to Walsh. Adding such flights would help counter the introduction of groundbreaking long-distance narrow-body services by rivals including Norwegian Air Shuttle ASA, even as IAG slows overall capacity growth. Mr. Walsh promised the new business would be profitable and said, "we believe it can achieve all the financial targets we have set for the group". British Airways also is adding seats to some of its long-haul planes to lower cost and better compete with carriers such as Norwegian Air.
Aer Lingus made an operating profit of €233m for last year, an improvement of €109m over the previous year on a like for like basis. The group further proposed a final dividend of 12.5 euro cents per share, taking the full-year dividend to 23.5 euro cents per share. British Airways' operating profit was up 17.8% and Iberia's up 22.6%, while bottom-of-the-class Vueling's corresponding figure nosedived 62.4%. The Irish carrier, acquired by IAG in August 2015, saw its full-year operating profit rise by 86.9%. Walsh said that Vueling should return to significant profit growth after the division was the only one to suffer a slide in earnings a year ago.