IAG, the owners of British Airways and Iberia, has reported a profit for the first time since it formed in 2011. Hayley Platt looks at the reasons behind the gains and what impact they might have on takeover talks with Aer Lingus.
Flying into profit. International Airlines Group, owner of British Airways and Spain's Iberia, has reported an underlying operating profit of 25 million euros for the first quarter. That compared to a loss of 150 million euros a year earlier. It's the group's first profit since its formation in 2011. And looks particularly impressive compared to rivals Air France-KLM which saw losses of over 400 million euros. Both airlines benefitted from lower fuel bills. And both are struggling with a firmer dollar, pushing up the price of tickets. But IG's Alastair McCaig says IAG had less issues to deal with. SOUNDBITE: Alastair McCaig, Markets Analyst, IG, saying (English): "Many of the mainland European airlines have shot themselves in the foot. They've had a number of issues which have worked out poorly as far as their PR is concerned, certainly as far as their reputation is concerned and throw into the mix the air traffic controllers strikes as well to an extent the blame and anger to that is slightly isolated towards IAG." BA boss Willie Walsh admits turning around the troubled Spanish carrier Iberia hasn't been easy. Tight cost controls have helped nurse it back to health. It's also trying to add Irish airline Aer Lingus to its portfolio of carriers. But progress has stalled as the Irish government decides whether to sell its 25 percent stake. SOUNDBITE: Alastair McCaig, Markets Analyst, IG, saying (English): "I think the Irish government is certainly looking for a number of confirmations as far as flight paths, flight plans and number of exposure as far as the Irish country is concerned which they are looking to be met by Willie Walsh. He himself obviously having a reputation for being quite a hard lines negotiator, I think the fact that this is stretching on isn't completely surprising as far as the city is concerned." IAG is sticking with its forecast for a 2.2 billion euro profit in 2015. But it warned of a slower second quarter. Oil prices may be lower, but the airline has to buy fuel in dollars - and the currency's strength is making that more expensive than it was last year.