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British Airways owner IAG lifted by currency tailwind

At current fuel prices and exchange rates, IAG still expects its operating profit for 2018 to show an increase year-on-year

A big currency gained boosted first-quarter profits at British Airways owner International Consolidated Airlines Group PLC (LON:IAG) despite higher fuel costs.

Revenues at the multi-airline group that also includes Iberia and Vuelings rose 2.1% to €5bn with passenger revenues 3.4% better.

Operating profits though were aided by a €58mln favourable currency shift, which raised the total for the three months to March to €280mln (€160mln).

That outweighed a 4.7% rise in the cost of fuel, which was more than 10% on a constant currency basis.

Willie Walsh, chief executive, said the timing of Easter benefited passenger revenues, while on a unit cost bases fuel rose by only 0.6%.

At current fuel prices and exchange rates, IAG still expects its operating profit for 2018 to show an increase year-on-year, he added.

Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.

Statutory profits jumped to €919mln as IAG booked a €639mln gain on the reorganisation of BA’s pension fund.

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