Iberia, British Airways say losses worsen

PanARMENIAN.Net - International Airlines Group, parent of British Airways and Iberia, said on Friday, May 11 that losses worsened in the first quarter, hit by the Spanish economic crisis, industrial action and soaring jet fuel costs.

According to AFP, pre-tax losses jumped to 263 million euros ($340 million) in the three months to March 31, compared with a loss of 47 million euros in the same period of the previous year.

Fuel costs meanwhile rocketed by 24.9 percent to 1.409 billion euros, compared with 1.128 billion euros a year earlier.

The group also registered a net loss of 146 million euros in the first quarter, but revenues grew 7.8 percent to 3.92 billion euros.

IAG added that its Iberia division made an overall operating loss of 170 million euros in the quarter, while BA's operating loss stood at £62 million.

"Iberia's performance reflects the weakness of the Spanish domestic market and industrial action by pilots opposed to actions by Iberia's management to improve the airline's efficiencies," said IAG chief executive Willie Walsh in the results statement.

"For British Airways, although the London market and demand for transatlantic travel remains strong, its performance has been affected by rising fuel costs."

The group, which recently acquired BMI from Germany's Lufthansa, added that it now expected to break even for the financial year.

BA and Spanish peer Iberia merged in January 2011 as they sought to slash costs, as the sharp economic downturn and the rise of low-cost competitors sparked steep losses for traditional carriers.