British Airways parent reports loss

International Airlines Group, the parent company of UK-based British Airways, has reported a loss for the 2012 financial year.

The group reported a pre-tax loss of EUR997 million for 2012, compared to a pre-tax profit of EUR503 million for 2011, with the group’s recently acquired Spanish airline, Iberia, taking most of the blame for the turnaround. Restructuring and impairment charges for Iberia of EUR545 million impacted on group figures, and that restructuring is on going, with fleet reductions, reductions in staffing levels and cuts to capacity.

Although IAG saw a 10.9 percent increase in revenue last year, to EUR18.1 billion, it also made an operating loss of EUR23 million, compared to EUR485 million profit for the previous year. Despite the reported losses the markets took the news favourably, as predictions for the operating loss had been as high as EUR88 million. Accordingly, the group’s share price increased by as much as 5 percent in today’s early trading.

IAG’s chief executive, Willie Walsh, commented, ‘2012 has been a year of transformation for IAG – we bought Bmi and integrated it into British Airways and initiated our restructuring of Iberia.

‘Revenue was up 10.9 percent in the full year, while our fuel bill rose by 20.4 percent (to EUR6.1 billion) with non-fuel costs up 11.6 per cent (to EUR12 billion).

‘The divergent financial performance of our airlines continued. British Airways made an operating profit of EUR347 million, including Bmi losses, while Iberia made an operating loss of EUR351 million.

‘We have embarked on a significant transformation programme in Iberia – and these results emphasise further that the airline must adapt to survive. It must stem its cash losses and adjust its cost base permanently if it is to compete with other airlines in all its strategic markets and lay the foundations for profitable growth in the future.’

 

Premier Inn reports healthy quarter’s sales growth

Whitbread-owned Premier Inn, a budget hotel chain with its headquarters in Luton, UK, has reported strong sales growth in the fourth quarter of the fiscal year.

The hotel brand reported sales growth of 14 percent during the 11 weeks to February 14, Whitbread’s fourth quarter. Total room nights sold by the brand in the first 50 weeks of the year were up by 11.2 percent to 13 million.

Revenue per available room (revPAR) grew by 1.6 percent, and occupancy grew by 1.1 percent, to 77.4 percent. The company’s UK regional revPAR was only down by 0.3 percent for the quarter, compared to a comparable industry average reduction of 0.9 percent. Meanwhile, the company’s London revPAR was up by 2.2 percent, compared to a decline for the sector as a whole of 5 percent.

Andy Harrison, the chief executive of Whitbread, commented, ‘For the financial year to date, Whitbread has again delivered outstanding organic growth in a flat consumer market, growing total sales by 14.8 percent. Our strong brands continue to win market share, supported by our highest ever guest satisfaction scores and rapid expansion of our network.

During the fourth quarter, we maintained our strong momentum with total sales growth of 16.9 percent, although the headline like-for-like sales growth of 2.7 percent was slightly suppressed by adverse weather conditions in January, particularly affecting the restaurants business.

Premier Inn continued to outperform its competitive set and delivered total sales growth of 14.1 percent, together with like-for-like sales growth of 2.9 percent.

We see no change to market conditions, although we expect a more competitive environment. We shall continue to deliver good organic growth and are on track to achieve our 2016 growth milestones.’