International Consolidated Airlines expects 2019 operating profit to be €215 million lower than 2018 pro forma

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International Consolidated Airlines (LON:IAG) presented Group consolidated results for the nine months to September 30, 2019.

IAG period highlights on results:

·      Third quarter operating profit €1,425 million before exceptional items (2018 pro forma1: €1,530 million, 2018 statutory: €1,460 million)

·      The quarter was heavily impacted by industrial action by BALPA pilots, which together with other disruption resulted in an adverse operating profit impact of €155 million

·      Passenger unit revenue for the quarter down 0.5 per cent, down 1.1 per cent at constant currency

·      Non-fuel unit costs before exceptional items for the quarter up 0.5 per cent, up 1.1 per cent at constant currency on a pro forma1 basis.

·      Fuel unit costs for the quarter up 6.1 per cent, up 4.2 per cent at constant currency

·      Net foreign exchange operating profit impact for the quarter favourable €41 million

·      Operating profit before exceptional items for the period of nine months €2,520 million (2018 pro forma1: €2,770 million, 2018 statutory: €2,575 million), down 9.0 per cent

·      Cash of €7,838 million at September 30, 2019 was up €1,564 million on December 31, 2018 and net debt to EBITDA of 1.2 times in line with 2018

·      Profit after tax before exceptional items for the period of nine months €1,814 million down 6.0 per cent (down 27.8 per cent on a statutory basis), and adjusted earnings per share down 1.4 per cent on a pro forma1 basis

·      Interim dividend of 14.5 € cents per share

Willie Walsh, IAG Chief Executive Officer, said:

“In quarter 3 we’re reporting an operating profit of €1,425 million before exceptional items, down from €1,530 million last year.

“These are good underlying results. As we said in September, our performance has been affected by industrial action by pilots’ union BALPA and other disruption including threatened strikes by Heathrow airport employees.

“In addition, our fuel bill increased by €136 million during the quarter with fuel unit costs up 4.2 per cent at constant currency.

“At constant currency, passenger unit revenue decreased by 1.1 per cent while non-fuel unit costs were up 1.1 per cent”.

Trading outlook

At current fuel prices and exchange rates, IAG expects its 2019 operating profit before exceptional items to be €215 million lower than 2018 pro forma (€3,485 million). Passenger unit revenue is expected to be slightly down at constant currency and non-fuel unit costs are expected to improve at constant currency.