Operating profits at British Airways and Iberia parent International Airlines Group fell a third to €363 million ($499 million) in the third quarter.

Total revenues were up 2.2% to €4.49 billion for the three months ending 30 September, but operating costs rose 7% to reach €4.13 billion on higher fuel costs. Pre-tax profits for the third quarter were down 34% to €332 million, while net losses fell a quarter to €283 million.

"High fuel costs continue to have a significant impact on our business," said IAG chief executive Willie Walsh. "This quarter fuel costs are up 23.7 per cent, compared to last year, while non-fuel costs are flat."

Given the disruption in the last quarter of 2010, when UK services were heavily disrupted by snow closures of airports, IAG said it is confident of improved profitability in the fourth quarter of this year even allowing for higher fuel prices and expects to deliver a roughly doubling in full-year operating profits for 2011.

"The main challenge for 2012 will be to offset increased fuel costs, as our hedges unwind, against a background of potentially weaker demand," added Walsh.

Source: Air Transport Intelligence news