British Airways owner International Consolidated Airlines (IAG) spent an extra €281m (£226m) on fuel during the first three months of 2012; a strike by pilots opposed to pay cuts at Iberia cost another €25m, and a euro zone economy in tatters is causing Madrid problems. The result is an operating loss that matched only the most pessimistic of City forecasts, and there are few positive factors on the horizon.
In fact, a €1.4bn fuel bill meant IAG lost €249m in the first quarter, twice as much as last year. BA came up £62m (€77m) short, but Iberia, with a €172m hole, made up the lion's share. Despite this and an annual fuel bill of over €6bn, chief executive Willie Walsh thinks the carrier will break even at the operating level this year. It might, too – steeper fares and brisk business on transatlantic routes are offsetting fuel costs and there'll be more lucrative long-haul flights to Asia and Latin America; Spanish pilots have called off a strike and the price of jet fuel has fallen, too.
