ICAG had an operating profit of €485m last year, compared with a pro forma €225m in 2010, the London-based company said in a statement yesterday. That surge masked losses at Iberia, which has its hub in Madrid.
Corporate traffic on money-spinning routes to the US has held up even as European economies contract, while ICAG also plans to add more services to emerging markets from London’s Heathrow airport after completing the $275m (€206m) takeover of Deutsche Lufthansa’s BMI unit to add operating slots.
“It’s strong in the right places, London and the trans-Atlantic,” said Douglas McNeill, a transport analyst at Charles Stanley in London who recommends buying ICAG stock. “Iberia is clearly the less well-performing part of the partnership and there is lots of work that needs to be done.”
ICAG rose as much as 4% and was trading 3.6% higher at 169.10p in London yesterday, valuing the company at £3.14bn.
The share price has fallen 40% since the merger amid concern about the European debt crisis and fuel expenses. It is up 14% so far this year, compared with a 17% advance for the seven-member Bloomberg EMEA Airlines Index.
Iberia weighed on earnings, posting an operating loss of €61m for 2011 versus a €592m profit at BA.
While British Airways is benefiting from a strong Atlantic market, Iberia is being hurt by the euro-crisis and competition from discount airlines and high-speed trains, chief executive Willie Walsh said, adding that with the Spanish economy likely to remain weak for years the situation must be addressed.