BA and Iberia owner swings back into profit in 2013

  • 28 February 2014
  • From the section Business
Willie Walsh and Dreamliner
Image caption Willie Walsh said BA had solid revenues

British Airways owner IAG bounced back into profit in 2013, fuelled by BA and Spanish budget airline Vueling.

The group posted a profit of 527m euros (£433m) in 2013, compared with losses of 613m euros the previous year.

Although Spanish carrier Iberia reported a loss, it had made "huge progress" because of restructuring, the group said.

British Airways had benefited from extra Heathrow slots from the integration of BMI, it added.

Media captionGroup CEO Willie Walsh: BA profits '"increased significantly"

"In 2013, we strengthened the group by acquiring Vueling, embarking on Iberia's transformation and enhancing British Airways' revenue performance," group chief executive Willie Walsh said.

"This has led to a strong financial recovery and return to profitability, with a turnaround of nearly 800m euros."

In a BBC interview, Mr Walsh said he was not worried about British Airways' prospects if Scots were to vote for independence from the UK.

"If anything, it [Scottish independence] will be slightly positive, since we believe it will abolish air passenger duty," he told BBC Breakfast.

The referendum on independence will be held on 18 September 2014.

Iberia 'making progress'

Iberia has dragged on IAG earnings since the group took it on in 2011. For example, in the first quarter of 2013, IAG reported a net loss of 630m.

But the Spanish carrier had "made huge progress" as a restructuring plan played out, Mr Walsh said.

"Recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline's costs further and providing the foundation for profitable growth," he said.

Cost-cutting and productivity improvements at Iberia had contributed to a healthy share price for IAG, Hargreaves Lansdown analyst Keith Bowman said.

"The share price is up by around 105% over the last year alone, outperforming the broader FTSE 100 index by an impressive 98%," said Mr Bowman.

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