Friday 26 October 2018 7:55 am

British Airways owner IAG glides over profit expectations for quarter


British Airways owner the International Consolidated Airlines Group (IAG) said today it had increased its profit for the quarter to €1.46bn (£1.3bn) up from €1.45bn last year.

The results beat the company compiled consensus figures of €1.43bn. Operating profit for the nine month period was €2.575bn a 7.3 per cent increase on €2.4bn last year.

IAG also said profit for 2018 would increase by €200m.

IAG chief executive Willie Walsh said they were “strong results despite significant fuel costs and foreign exchange headwinds”.

Net foreign exchange operating profit impact for the quarter was €111m while fuel unit costs for the quarter were up 14.3 per cent.

IAG's share price increased 2.38 per cent this morning.

George Salmon, Equity Analyst at Hargreaves Lansdown said: “There are a few encouraging points in IAG’s results. Not only is the group adding more flights, it’s managing to fill more seats on its planes while also getting a benefit from pricing. That’s helping the top line grow smoothly.

"The fly in the ointment is solid progress on revenues is being undone by a sharp jump in operating costs. However, that’s really just a product of rising fuel costs, which are of course well out of IAG’s control. Take out the impact of higher fuel prices and unfavourable currency moves, and it becomes clear IAG is doing some pretty impressive work on underlying operating improvements. It’s confident it can keep this trend going too, which is clearly a good sign for investors.

"Nonetheless, it shouldn’t be forgotten business and leisure travel are both sensitive to the fortunes of the wider economy. IAG remains vulnerable to any economic downturn on the back of a disorderly Brexit.”

The results come the day after British Airways revealed an investigation into September's data breach had revealed a further 185,000 users had been affected in an earlier hack on its website.

An internal investigation uncovered a second hack which showed the financial details of another 77,000 payment cards were potentially compromised, including their card number, expiry date and CVV, as well as a further 108,000 cards without the CVV.

The earlier breach affected British Airways customers making reward bookings between 21 April and 28 July this year using a payment card.

However the firm also revised down its initial estimates of customers originally identified in the breach on 6 September, from 380,000 to 244,000. The total number of users affected in both hacks now stands at 429,000.

The firm said in a stock market filing: “While British Airways does not have conclusive evidence that the data were removed from its systems, it is taking a prudent approach in notifying potentially affected customers, advising them to contact their bank or card provider as a precaution.”