IAG upbeat on full year after cutting Q1 loss to €150m

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British Airways and Iberia parent IAG has almost halved group operating losses in the first quarter to €150 million ($209 million) on revenues up nearly 7% to €4.2 billion.

The reduced losses reflected an improved performance at both BA and Iberia, and also includes a €30 million loss from Vueling for the quarter - which was not part of the group in the same period last year. The group loss for the quarter of €150 million compares with a loss of €278 million for the same period last year, before exceptional costs.

Iberia almost halved it operating losses to €111 million for the three months to March 2014, compared to €202 million at the same stage last year. "The airline continues to benefit from restructuring and these figures don't reflect the impact of recent pay and productivity agreements which took effect in April," says IAG chief executive Willie Walsh. "While the restructuring remains work in progress, Iberia is gradually resuming some routes including long- haul services to Santo Domingo and Montevideo.

BA virtually wiped out its first quarter operating losses, from €72 million to €5 million. "The airline has increased capacity within a controlled cost environment and benefited from the efficiency of its new Airbus A380 and Boeing 787 aircraft," says Walsh.

"Vueling made an operating loss of €30 million and has managed to keep its losses flat while growing capacity.," says Walsh of the rapidly expanding low-cost operation IAG acquired full control of last spring.

Group net losses in the first quarter were slashed from €630 million to €184 million.

For the year ahead, IAG says: "We expect to improve operating profit for the 2014 full year by at least €500 million, from a 2013 base of €770 million. Unit revenues should remain relatively flat, with margin expansion driven by a reduction in unit costs."