29 Aug 2010

Iberia back in profit

9:07 am on 29 August 2010

Spanish airline Iberia, which is merging with British Airways, returned to profit in the second quarter of 2010, posting gains of 31 million euros ($US39.6 million).

This contrasts with a loss of 73 million euros in the same period of 2009.

The airline said it had reined in costs by 5.9% in the first half of 2010 by lower spending on fuel, cuts in seat numbers and other cost-containment measures.

However, Iberia said the domestic market remained in the doldrums, leading to negative results."

Profits were hit by the discharge of volcanic ash in Iceland that grounded planes across Europe earlier this year.

Iberia and BA signed a deal to merge and create one of the world's biggest airline groups in April.

The BBC reports the merger is expected to be completed by the end of this year.

The new company will be called International Airlines Group, but the BA and Iberia brands will continue to operate as normal.

The company will have its headquarters in London. BA shareholders will retain 55% ownership of the company.