IAG reports 390 million euro loss

Published:  6 Aug at 9 AM

International Airlines Group shares dropped 5.2 per cent on Friday after the Iberia and British Airways owner announced a 390 million euro loss for the half-year ending in June. This is compared to pre-tax profits of 39 million euros for the same period a year earlier. According to the group the losses were mainly due to the problems being experienced by Iberia.

IAG boss Willie Walsh said a restructuring programme for Iberia had already been initiated which he hoped would be complete by September. He added that the group’s profits had also been hit by the high price of jet fuel.

Mr Walsh said that any changes to reduce costs at Iberia were bound to result in some job losses. Iberia is currently suffering because of Spain’s economic woes which have seen a drop in the demand for seats.

However, the company also said that over the last two quarters it has seen revenues increase to 8.5 billion euros from 7.8 billion euros recorded for the same period a year earlier. Passenger numbers also grew and IAG said it was making more money from each of them. However, a 25 per cent increase in the price of jet fuel managed to offset any gains.

Virgin Atlantic has also blames the high price of fuel for a yearly loss of £80 million compared to profits of £18.5 million the year before.