Bloomberg News

IAG 2012 Traffic Gains on British Airways Growth as Iberia Flags

January 07, 2013

International Consolidated Airlines Group Plc (IAG) boosted traffic 2.6 percent last year as growth at British Airways offset a decline at Spanish unit Iberia, buoyed by demand for trans-Atlantic travel and the takeover of BMI.

Traffic, or the number of passengers carried multiplied by the distance flown, rose 7.7 percent at British Airways, or 5.2 percent excluding the impact of buying BMI, while slumping 3.1 percent at Iberia, London-based IAG said today in a statement.

Chief Executive Officer Willie Walsh, who led the merger that formed Europe’s third-largest airline in 2011, is seeking a 600 million-euro ($786 million) turnaround in earnings at Iberia by 2015. IAG is following Air France-KLM Group and Deutsche Lufthansa AG (LHA) in cutting jobs as Spanish operations are hurt by an economic slump and competition from discount operators.

“There is continued firmness in trends at British Airways and weakness in Spanish markets,” the company said today. IAG cut capacity 3.3 percent at Iberia last year to help cope with the decline, while adding 5.4 percent more seats at BA.

IAG shares fell as much as 1.8 percent and were trading 1.6 percent lower at 191.90 pence as of 3:54 p.m. in London.

BA and Iberia collectively carried 54.6 million people in 2012, up 5.6 percent from a year earlier. All regions other than Africa the Middle East and south Asia posted growth, while the overall load factor climbed by 1.2 points to 80.3 percent.

Iberia’s ground staff, cabin crew and pilots last month agreed to negotiate terms of a restructuring plan, calling off strikes planned for the holiday period.

IAG’s traffic figures include discount unit Iberia Express while excluding BMIbaby, which was closed down in September.

To contact the reporter on this story: Kari Lundgren in London at klundgren2@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net


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