International Airlines Group (IAG) Reports High Profits
The International Airlines Group(IAG) , owners of the British Airways has just reported a high per-tax profit of £601 million for the previous year 2014. This indicates an exceeding increase in the profit level of other years.
IAG attributed its huge 2014 profits to the reduced cost of aviation fuel – cost of fuel decreased as the global oil price decreased since late 2014. So, with lower expenses incurred then, profit rate is bound to also increase. The airline, company also added new sets of aircrafts that increased efficient service delivery, hence skyrocketing profit levels.
Iberia and Vueling are Spanish airlines owned by the International Airlines Group(IAG), including the British Airways. It is also proposing to take over the Irish airline Aer Lingus soon, as negotiations are on-going.
IAG wants to buy over Aer Lingus for about €1.36 billion. But this does not look as easy as it seems, because Aer Lingus has other partners that are opposed to the take over deal. The government of Ireland with 25 percent share, is well opposed to this, but the International Airlines Group(IAG) is determined to pull through with the take over plan.
“We’ll have discussions in due course with the Irish government” said Willie Walsh, the Chief Executive of the International Airlines Group(IAG).
Iberia, one of the Spanish airlines owned by IAG, reports a profit of €50 million after about five years of trying to stand, since it was taken over by IAG. There is in fact a big difference between 2013 and 2014 for Iberia. In 2013, it incurred a loss of about €166 million and then made a profit of €50 million in 2014 – it is obvious the struggle is over for Iberia.
Willie Walsh, IAG Chief Executive also said “I’m very much focused on the fantastic results that we’ve announced today and looking forward to developing IAG with existing airlines and with opportunities to expand with other airlines”.
The competitiveness of the market was strong for Vueling, Iberia and British Airways – the three airlines owned by the International Airlines Group, they said. This was because other competitors were offering reduced cost for fares than their airlines; they called it – “the growing presence of low cost carriers”.
“In 2013 we said our intention was for Iberia to break even in 2014 and it has fulfilled that promise” IAG Chief said. Iberia in the midst of stiff competition was able to break out of loss into profit in 2014.
British Airways increased profit from €762 million in 2013 to €1.2 billion in 2014. Vueling increased increased in profits in 2014 to €141 million also. All International Airlines Group carriers had a remarkable performance in 2014.