4 Aug 2012

BA and Iberia report loss

6:30 am on 4 August 2012

The parent group of British Airways and Iberia has reported a loss of 390 million euros ($US476 million) loss for the six months to the end of June and warned that job cuts cannot be avoided.

The loss compares with a 39m euro pre-tax profit in the same period last year.

Iberia was worst hit. Its operating losses widened to 263m euros in the period.

International Airlines Group said it would finalise a restructuring plan for the Spanish carrier by the end of September.

Revenue rose 10% to 8.5 billion euros compared with 7.8 billion euros in the same period last year.

Passenger numbers rose. But the increased revenue was more than offset by a 25% rise in fuel costs and charges from the process of restructuring its business.

Despite the higher fuel charges, British Airways turned a small operating profit of 13 million euros at the start of the year.

As well as the cost of future redundancy payouts Iberia faces particular problems due to the worsening economic conditions in its home market of Spain.

Originally, IAG had forecast it would break even this year.