International Consolidated Airlines Group PLC (LON:IAG) saw its shares gain this morning after it said it expects its 2017 operating profit to show double-digit percentage growth as it reported a strong second quarter despite a massive IT power outage which grounded some British Airways flights over a May bank holiday weekend.
IAG – which also owns Ireland’s Aer Lingus and Spanish carriers Iberia and Vueling – posted a 37.3% rise in operating profit before exceptional items to €975mln for the six months to June 30, up from €710mln a year earlier.
READ: British Airways contractors deny reports that human error caused IT systems failure
The FTSE 100-listed company said its non-fuel unit costs before exceptional items rose by 3.5% at constant currency, including the financial impact of the massive power outage, while fuel unit costs fell 13.2% at constant currency.
IAG said its passenger unit revenue rose 1.5% in the quarter, its first year-on-year increase in quarterly revenue per passenger mile flown since 2014, with the increase 4% at constant currency.
The group said it expects second half passenger unit revenue to show an increase versus last year at constant currency.
Willie Walsh, IAG’s chief executive officer, said: “The underlying trend in unit revenue improved, benefiting partially from Easter and a weak base last year.”
IAG shares take-off
In early trading, IAG shares were up 1.4%, or 8p to 602p.
In an initial note to clients, analysts at Liberum capital said: “Q2 results ahead of consensus and our forecasts on strong revenue, mirroring the pattern seen across the industry.
“The timing of Easter was helpful, but management highlights and underlying improving trend. H2 unit revenue is seen higher YOY constant currency”.
Liberum repeated a ‘buy’ rating and 700p target on IAG.
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