IAG share price falls despite low fuel costs boosting profits for 2015
British Airways owner International Airlines Group (IAG) has unveiled higher than expected profits for the year ending 2015, as a result of cheaper fuel prices and customer demand.
The airline conglomerate, which represents British Airways and Iberia, among others, reported an operating profit before exceptional items of €2.34bn (£1.84bn) last year – a year-on-year increase of 125 per cent. The firm had previously predicted an operating profit of €2.29bn for the year.
Profits were helped by the falling price of oil and gas, which led to a 17.2 per cent reduction in fuel unit costs over the course of the year. Passenger unit revenue went down 3.5 per cent and non-fuel unit costs were down 3.9 per cent in the 12 months to 31 December 2015.
The results also include a contribution of €35m from Aer Lingus, the beleaguered Irish airline which was acquired by IAG in August 2015 for €1.5bn.
"These results are in line with our recent target and have exceeded our original 2015 operating profit target of €1.5bn that we set in 2011,” said IAG chief executive officer Willie Walsh.
“It's undoubtedly been a good year but it's also been challenging with extreme volatility in the currency and fuel markets. The benefits gained from lower fuel prices have been partially offset by the stronger US dollar.”
He added that the board is proposing a final dividend to shareholders of €0.10 per share, which will bring the full year dividend to €0.20 per share, subject to shareholder approval at the AGM in June.
Shares fell 1.8 per cent to 548p in early trading.
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