International Finance

European airlines: British Airways’ IAG can beat fuel price storm

British Airways beats European airlines
The British Airways’ owner’s performance is exceptional considering how others have fared

British Airways’ owner IAG remained profitable in the first quarter of 2019 while rival European Airlines such as easyJet and Lufthansa reported quarterly losses. Profit after tax and exceptional items at IAG, however, fell 91 percent to £60.4 million year-on-year.

British Airways Chief Executive Willie Walsh told the Press Association: “In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable and are reporting an operating profit of 135 million euros.”

Operating profit before exceptional items at British Airways fell 60 percent to £116.55 million in the first quarter of 2019. However, IAG which also operates other European airlines including Iberia, Air Lingus, and Vueling predicts that operating profit in 2019 will be in line with that of 2018 because of pressure from higher fuel prices, according to Reuters.

Analysts at RBC told Reuters that the results were good considering how other European airlines have fared and the lack of clarity over the actual date of the Brexit. “We can see no evidence of any Brexit impact in our results, and we see no evidence of it impacting on forward booking trends or behaviours,” Walsh was reported as saying by Reuters

Among European airlines, British Airways has stood out in terms of flights actually taking off as fuel prices surged. Ryan Air and easyJet were among the European airlines affected by the change in aviation market conditions. This, along with the ability to turn out a profit in difficult conditions makes British Airways better placed among European airlines to face the fuel price surge.

The airlines passenger numbers were up 7.3 percent to 9.85 million people during the month of April. Year to date, British Airways saw a 6.5 percent increase in passenger numbers.

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