Rising fuel costs and the impact of Spain’s economic crisis left the owner of British Airways and Iberia nursing big quarterly losses today.
International Airlines Group was also hit by industrial action by pilots at Iberia as it recorded losses of €263m for the three months to March 31, against a deficit of €47m a year earlier.
Strong demand in London and for transatlantic travel lifted revenues at British Airways but the airline’s mounting fuel bill meant its operating losses widened to £62m from £5m.
Iberia’s operating loss of €170m reflected the airline’s worsening performance from its Madrid hub and the strike action, which cost €25m in the quarter but has now been called off.
Fuel costs for the group were up by 25% on a year earlier to €1.4bn and at current levels are on track to increase by more than €1bn in this financial year.
IAG also highlighted the impact of government taxes, with the UK increasing air passenger duty by double the inflation rate and Spain announcing plans to increase departure taxes by up to €10 per passenger.
The group, which recently acquired BMI, said it now expected to break even for the financial year.