International Airlines Group (IAG) has just published its financial results for the first quarter of the year.
Once again, the results are a tale of two airlines with a stark divergence in the performance of British Airways and Iberia. IAG made an overall operating loss of €278 million. However, IAG had to also take another exceptional charge of €311 million in connection with the restructuring of Iberia. This is in addition to the exceptional charges and provisions IAG took at the end of 2012. The overall loss after tax for the quarter was €630 million.
In comparison to last year, in Quarter 1 of 2012, IAG made an operating loss of €249 million, before exceptional items and a loss before tax for the quarter of €263 million. Iberia made an operating loss of €170 million and BA made an operating loss of £62 million. For the year, BA made an operating loss of and BA made an operating profit of €347 million and Iberia made an operating loss of €351 million.
IAG has taken a number of steps to improve the performance of Iberia. It has cut capacity by 15%. It has pushed through wage cuts for front-line staff following a period of 10 days of strikes and an arbitration process. It has replaced Iberia’s Chief Executive Rafael Sánchez-Lozano with the Chief Executive of Iberia Express, Luis Gallego. The airline has also taken delivery of three out of eight Airbus A330 aircraft which offer improved efficiency and passenger cabin comfort. Iberia is also expected to announce a new leadership team this month.
In comparison to the other of the Big Three European legacy groups, Air France KLM reported an operating loss of €530 million for the quarter and Lufthansa reported an operating loss of €359 million for the quarter.