IAG chief sees potential for further efficiencies at BA

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IAG chief executive Willie Walsh expects opportunities for further cost and performance improvements at its British Airways unit, even after the UK carrier more than doubled operating profit to £651 million ($1.09 billion) last year, from £377 million in 2012.

Solid revenues and a continued focus on cost discipline are cited by IAG as factors in the BA result, along with BMI's incorporation and redeployment of its landing rights, plus recovery from the negative traffic impact of the London Olympics in 2012.

Walsh praises BA for "making good progress on their cost base". Referencing the airline's "mixed fleet" cabin crew, who fly to both short- and long-haul destinations, he notes: "We're seeing the benefit to the structural reduction of cabin-crew cost through the introduction of the mixed fleet, and that's working much better than we had expected."

However, Walsh indicates that BA's quest for efficiencies must be ongoing. "There’s always more that they can do," he says. "The advantage of having [Spanish low-cost carrier] Vueling in the group, and the restructured cost base, is that we can look at where the opportunities for improving cost and performance in British Airways will be. We’ve got a great management team there, and Keith [Williams, BA chief] is committed to ensuring that he delivers and isn’t embarrassed by the performance of his colleagues around the table."