Profits soared at British Airways owner International Airlines Group (IAG) in the first three months of the year, but it wasn't enough to offset warnings of a slowdown over the next few months, which sent shares down four per cent
The FTSE 100 airline giant, which was formed by the merger of British Airways with Spanish fleet Iberia, warned revenues could be hit over the rest of the year, however, as passengers stay away from the skies in the aftermath of the Brussels terrorist attacks.
Operating profits were €168m (£131m) in the three months to March - up from €25m in the first three months of last year.
Passenger numbers jumped 22 per cent to more than 20 million in the period, helping to push total revenue eight per cent higher to €5.1bn.
Fuel costs came down 14 per cent over the period to €1.2bn - meaning the airline spent more on employees than it did on jet fuel.
Overall, costs climbed five per cent as landing fees jumped 31 per cent to €474m and engineering and maintenance charges also climbed by 21 per cent to €404m.
Why it's interesting
In what is typically the quietest time of the year, IAG has managed to pip analysts' expectations and increase revenues, passenger numbers and profits handsomely. Despite this, shares dropped four per cent to 528p at the start of trading.
Investors were worried about IAG's warning the Brussels terrorist attacks hit the group's performance in March and could be a drag in the second quarter of the year as well.
Cargo revenues, however, dipped, in a further sign the industry is relying more and more on leisure and business travel as its main source of income.
Revenue from cargo accounts for just five per cent of total income, but with global trade stumbling, this dipped slightly in the first three months of the year, even as passenger numbers jumped.
What International Airlines Group (IAG) said:
The IAG statement said:
"Revenue trends in quarter two have been affected by the aftermath of the Brussels terrorist attacks, as well as some softness in underlying premium demand. As a result, IAG has moderated its short term capacity growth plans."
Chief executive Willie Walsh added:
"This is a good performance with a strong increase in what is traditionally the weakest quarter."