British Airways owner's losses grow on Iberia hit
By Rhys Jones
LONDON (Reuters) - International Airlines Group (ICAG.L: Quote) reported wider first-quarter operating losses on Friday, as deepening trouble at its Spanish carrier Iberia wiped out progress at British Airways.
IAG (ICAG.MC: Quote), Europe's third-biggest airline group by market value, made an operating loss of 278 million euros ($364 million) in the year's first three months, traditionally weak for airlines.
The Spanish carrier contributed 202 million euros of that - up from 169 million euros a year earlier - as it suffered from competition from low-cost rivals and high-speed trains, labor disputes and a recession that has left a quarter of Spaniards out of work.
Rival European carriers Lufthansa (LHAG.DE: Quote) and Air France-KLM (AIRF.PA: Quote) are also slashing jobs and shelving growth plans as they grapple with high fuel prices, a weak economy and fierce competition from low-cost carriers and Middle East airlines.
IAG took a 311 million euro charge in the quarter for restructuring that plans to cut 3,100 jobs to return Iberia - Europe's biggest carrier to Latin America - to profit by 2015.
That was on top of 545 million euros last year and while Chief Executive Willie Walsh said there was "more work to be done", he said he did not expect further significant charges this year.
Liberum analyst Peter Hyde called IAG's results a mixed bag.
"To achieve our forecast 2013 operating profit of 505 million euros IAG needs Iberia to restructure quickly and British Airways to leverage its market position," he said. Continued...