IAG 1Q Pretax Profit Fell on Higher Fuel Costs; Revenue Increased -- Update
10 Maio 2019 - 07:15AM
Dow Jones News
By Anthony O. Goriainoff and Robert Wall
International Consolidated Airlines Group SA (IAG.LN) Friday
said that higher fuel costs and stiff competition shrank
first-quarter pretax profit, but that improving unit revenue and
cost control should allow it to meet full-year targets.
IAG, the parent of British Airways and Iberia, also said the
airline group is cutting capacity, particularly to weaker markets
such as Brazil, Argentina and South Africa. Full-year capacity will
grow by 5.3% compared to 5.9% previously projected, Chief Executive
Willie Walsh said Friday.
The airline group, which also includes Aer Lingus and budget
units Vueling and Level, said that for the quarter ended March 31,
statutory pretax profit was 86 million euros ($96.3 million)
compared with EUR885 million a year earlier.
IAG's closely watched operating profit before exceptional items
came in at EUR135 million, compared with EUR340 million a year
earlier on a pro-forma basis.
Total revenue for the period was EUR5.32 billion, compared with
EUR5.02 billion the year prior.
Capacity expansion in Europe, which depressed yield in the first
quarter, should moderate over the coming weeks partly reflecting
the global grounding of Boeing Co. (BA) 737 MAX airliners after two
fatal crashes, IAG Chief Financial Officer Enrique Dupuy. Several
IAG rivals were planning to operate the Boeing plane this summer,
but have had to cancel some flights with the MAX idled by
regulators.
Fuel-unit costs for the quarter rose 16%, or 11% at constant
currency. Nonfuel unit costs before exceptional items rose 0.8%,
but fell 0.6% at constant currency on a pro forma basis. Fuel costs
increased 23%. Average fuel prices increased in the period net of
hedging, mainly due to hedging profits in 2018 not repeated in
2019.
The company said that at current fuel prices and exchange rates,
it expects 2019 operating profit before exceptional items to be in
line with last year's EUR3.5 billion. Passenger-unit revenue should
be flat at constant currency, while nonfuel unit costs is expected
to improve at constant currency.
Mr. Walsh also ruled out IAG making an offer for airlines being
put up for sale by tour operator Thomas Cook Group PLC (TCG.LN) an
added IAG had no plans to renew takeover ambitions for Norwegian
Air Shuttle ASA (NAS.OS).
Write to Anthony O. Goriainoff at
anthony.orunagoriainoff@dowjones.com and Robert Wall at
robert.wall@wsj.com
(END) Dow Jones Newswires
May 10, 2019 06:00 ET (10:00 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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