The owner of British Airways has revealed a sharp drop in quarterly earnings on surging fuel prices due to the Iran war and warned its annual fuel bill is set to jump to nearly nine billion euro (£7.4 million).
International Airlines Group (IAG) said pre-tax profits fell 12.9% to 1.63 billion euro (£1.33 billion) in the three months to September 30, while operating profits slumped 15.9% to 1.73 billion euro (£1.42 billion).
It said a 4.5% rise in revenues was not enough to offset a 30.4% jump in jet fuel costs, as well as disruption caused by Air Traffic Control outages.
An incident at National Air Traffic Services (Nats) on September 8 led to the cancellation of more than 2,000 flights and impacted hundreds of thousands of passengers.
IAG said its total fuel costs are expected to soar to 8.9 billion euro (£7.28 billion) for the financial year, even with actions to fix prices in advance.
It said ongoing efforts to drive savings were helping limit the impact of disruption and non-fuel costs.
Luis Gallego, IAG chief executive, said: “As a result of the actions we are taking the outlook for the rest of the year, as well as the start of next year, is positive.”
This article was written by Holly Williams from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.