IAG chief executive Willie Walsh hails Iberia as the group's "star performer" in the third quarter, with the Spanish carrier having reduced labour costs and generated an improved operating profit.
While that €162 million ($204 million) operating profit had been "anticipated on the back of the restructuring" programme under way, it was "great to see [the] underlying financial performance of Iberia being as strong as it is", Walsh told analysts today.
"Iberia has been improving to reach best in class in the group," adds IAG finance chief Enrique Dupuy, pointing to a 10% reduction in employee cost per available seat-kilometre in the quarter – and an increase of nearly seven percentage points in operating margin, to 13.1%.
IAG is beginning to see "some improvement in underlying commercial performance" at Iberia, Walsh says, adding that the brand is now once again "very strong" in Spain. But he affirms that the main opportunity to improve Iberia's performance in the future "remains on cost" rather than new commercial initiatives.
On the subject of further voluntary redundancies at the Spanish national carrier, Walsh would not be drawn on numbers. However, he says there is a "growing appetite" among "high-cost employees" to choose this option, which should help reduce Iberia's labour unit costs in the future.
Iberia and BA will grow capacity 4.1% in the fourth quarter, and 5.2% over the whole of 2014. Citing resumption of long-haul routes such as Montevideo and Santo Domingo and of short-haul services to Amsterdam, Istanbul and Stockholm, Dupuy says Iberia is returning to markets where it "knows the customer profile".
Walsh says that on short-haul markets, Iberia Express has proved to be a "fantastic vehicle" for the Spanish carrier to return to previously served markets with reduced costs.
Source: Cirium Dashboard
