International Airlines Group has reported an increase in revenue and profit for the second quarter.
IAG CEO Willie Walsh stated that IAG would still proceed with a planned 3% capacity cut ahead of the winter season.
The group reported a first-half pre-tax profit of €96 million, in contrast to a loss of €503 million in the first half of 2013.
Second quarter operating profit rose to €380 million from €245 million (before exceptional items) last year.
On a constant currency (CC) basis, second quarter passenger unit revenue was down 0.4% and non-fuel unit costs were down 4.4%. Those statistics exclude the results from LCC Vueling.
Revenue for the quarter was up 6.7%, or 8.2% on a CC basis, to €5.08bn, and fuel unit costs for the quarter were down 9.3% (-5.4% on a CC basis).
CEO Walsh said: "All of our airlines had their highest second quarter operating result since 2007. Iberia's restructuring continues to have a positive impact, and last week Iberia signed an agreement that could lead to an additional reduction of up to 1,427 jobs. This will create new opportunities for Iberia to enhance its profitability further in the next two or three years. Based on the progress made at Iberia, we're pleased to announce today that eight Airbus A350-900s and eight Airbus A330-200s will be joining its long haul fleet as replacement aircraft.”
At current fuel prices and foreign exchange rates, IAG expects to improve operating profit for the 2014 full year by at least €500 million, from a 2013 base of €770 million.
IAG also expects passenger unit revenues to remain relatively flat, with margin expansion driven by a reduction in unit costs.