IAG lifts guidance as lower fuel costs boost Q3 profits

Anglo-Spanish airline conglomerate International Consolidated Airlines Group reported a big jump in third-quarter profits on the back of falling fuel costs and lifted its guidance for full-year growth.

The company, otherwise known as IAG, said it now expected to increase full-year adjusted operating profits by €550m-600m, from €770m in 2013. At the half-year results in August, it had guided to a €500m improvement over last year.

Operating profits in the quarter ended 30 September rose to €900m, up 30% on the €690m reported the year before.

The bottom line was helped by a 8.5% year-on-year rise in group revenues to €5.87bn, up 6.9% at constant currency, as well as a 7.5% constant-currency drop in fuel unit costs.

British Airways saw operating profit rise 27% to €607m, Iberia grew operating profit reported a 119% increase in operating profit to €162m, while Vueling reported an operating profit of €140m, broadly flat year-on-year.

"We continued to grow capacity efficiently and both our non-fuel and fuel unit cost performances were strong with the latter boosted by the introduction of new, more efficient aircraft into our fleet," said chief executive Willie Walsh.