International Airlines Group soars

British Airways PlcIT was a week of good news. Following Qantas’ stellar turnaround, the International Airlines Group (IAG) which owns British Airways (BA), Iberia and Vueling posted soaring pre-tax profits of €828 million (US$89.8 million) for the year ending 31 December 2014.

However, while Qantas swings like a yo-yo, plagued by uncertainty of its action in spite of its vaunted transformation programme, BA has demonstrated a steadier course in progressing all three partners towards profitability. (See Qantas’ stellar turnaround: To whom is the credit due? Mar 6, 2015)

IAG’s success was attributed largely to the turnaround of Spanish airline Iberia which IAG CEO Willie Walsh said “remarkable, both financially nd operationally.” Stringent cost-cutting measures that had resulted in 4000 job redundancies since 2011 and the use of more efficient aircraft have worked. The target was for Iberia to break even in 2014, and it had done better than that, posting an operating profit of €50 million, compared with an operating loss of €166 million last year and, as a result, almost doubling IAG’s operating profits to more than €1 billion.

BA posted an operating profit of €1.2 billion compared to last year’s €762 million. Low-cost partner Vueling posted an operating profit of €141 million.

IAG has raised its forecast for 2015 by 20 per cent. However, it said all three airlines in its conglomerate are facing stiff competition, particularly from low-cost carriers, across Europe.

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About Dingzi
Writer by passion, with professional expertise in aviation, customer service and creative writing. Aviation veteran, author, editor and management consultant. Besides commentary on business issues and life-interest topics, travel stories and book reviews, genres include fiction, poetry and plays. Nature lover who abhors cruelty of any form to animals, and a tireless traveler. Above all, a dreamer.

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