IAG posts a 770-million-euro operating profit due to strong performance by British Airways

International Consolidated Airlines Group SA made an official statement today, revealing a 2013 operating profit before one-time items, which is estimated to 770 million euros (1.1 billion dollars). The upbeat result is based on an income boost at the companys business in the U.K., as well as a successful recovery plan that was used by the company over its Spanish Iberia unit.

In comparison, the company posted a 23-million-euro loss for 2012. According to data compiled by Bloomberg, analysts expected earnings of 773 million euros.

The Chief Executive Officer of International Consolidated Airlines Group SA – Mr. Willie Walsh said on a conference call, which was cited by the Financial Times: “Iberia has made huge progress on cost control as its restructuring takes shape and great credit should be given to all those involved. It has reduced its losses in the year, reporting an operating loss of €166m. The recent pay and productivity agreements between Iberia and its pilot and cabin crew unions are key to reducing the airline’s costs further and providing the foundation for profitable growth.”

As reported by the Wall Street Journal, Mr. Walsh also said: “We have shown strong financial management this year. In 2014, we expect to make steady progress toward our 2015 group operating profit target of 1.8 billion euros, with relatively flat unit revenue.”

Iberia managed to reduce its operating loss from 351 million euros in 2012 to 166 million euros. The company has been facing difficulties such as hard restructuring, dropping routes, more than 3,000 layoffs and serious wage cuts for the remaining staff.

The division, however, seems to be recovering from its hard times, as it managed to reach agreements with pilots and cabin crew on matters of wages and productivity over the last few weeks. More flexible working hours were agreed by cabin crew and Iberia in return for reduced pay cuts. Nevertheless, the Chief Executive Officer Mr. Walsh shared that there is “still work to do” in order to maintain the great progress of the unit.

International Consolidated Airlines Group SA fell by 3.54% in London by 12:04 GMT to trade at 436.10 pence, marking a one-year change of +82.19% and a market value of 9.18 billion pounds.