In its half-year report to the end of June 2013, published this morning, International Consolidated Airlines (LSE: IAG) revealed a second quarter operating profit of €245 million, compared with 2012’s loss of €4 million. The company attributed the turnaround to strong passenger unit revenues and non-fuel unit cost improvements. And while there was still an operating loss of €33 million for the half-year, it was a substantially better performance than 2012’s loss of €253 million.
Revenue for the half-year rose 2.1% to €8,707 million, even after accounting for a 1.7% adverse currency impact. And half-year passenger unit revenue gained 2.8% (or 4.6% on a constant currency basis), on an increase in capacity of 1.2%.
Fuel costs for the half-year were reduced by 3.7%, to €2,864 million (3.9% for the second quarter), although half-year non-fuel costs (before exceptional items) rose 1.1% to €5,876 million.
Commenting on the results, IAG chief executive Willie Walsh said:
“These are positive results for the quarter with an operating profit of €245 million based on total revenue up 3.4 per cent and costs down 2 per cent. Fuel costs were down 3.9 per cent.”
“Several factors have contributed to this improvement. Firstly, the benefits of Iberia’s restructuring are beginning to show. … British Airways’ performance has improved with operating profit up from €94 million in 2012 to €247 million. … Vueling joined IAG on April 26, 2013 and in the rest of the quarter achieved an operating profit of €27 million.“
At the time of writing IAG’s share price is 306.5p, up almost 66% so far in 2013, and almost twice what it was this time last year.
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> Jon doesn’t own shares in International Consolidated Airlines.