Spanish Oneworld carrier Iberia slid to a €400,000 ($617,000) first quarter net loss, after spiralling fuel costs hampered it from matching its €12.2 million net profit for the first quarter of 2007.
Between January and March Iberia’s operating revenues fell fractionally to €1.3 billion, but its costs were 2.5% up at €1.33 billion, causing its EBITDAR to drop 29% to €124 million.
The Spanish firm swung to a €28 million EBIT loss from a €13 million profit. Operating losses for the quarter stood at €6.6 million, down from a €14 million operating profit.
Iberia says the operating loss was driven by €66.8 million in additional fuel costs. But despite the increased fuel expenditure, Iberia’s capped its total cost increase to €31.4 million.
It says: “The restructuring of the flight network and the implementation of the majority of the other measures set down in the ‘Director Plan 2006-08’ were key to offsetting the impact of the increase in fuel costs. As a result, excluding fuel costs, unit operating costs fell by 4.8%.”
Another factor underlying the operating loss is what Iberia refers to as exceptional first quarter revenue behaviour. Passenger revenues for the quarter fell 2.3%; a change which the carrier says was driven by the depreciation of the dollar, competitive pressure on prices and 9% growth in its average stage length.
But Iberia says: “There was a noteworthy increase in revenues from third-party aircraft maintenance clients, which climbed by 9.3% to €6.3 million. A larger number of high added-value aircraft engine maintenance jobs for other airlines explained most of this increase.”
Source: flightglobal.com's sister premium news site Air Transport Intelligence news
Source: Flight International
