International Airlines Group (IAG), the owner of British Airways, has reported a sharp drop in quarterly earnings due to surging fuel prices linked to the Iran war, and warned its annual fuel bill is set to jump to nearly nine billion euros.
Pre-tax profits fell 12.9% to 1.63 billion euros (£1.33 billion) in the three months to September 30, while operating profits slumped 15.9% to 1.73 billion euros (£1.42 billion).
Revenue growth offset by fuel and disruption costs
A 4.5% rise in revenues was not enough to offset a 30.4% jump in jet fuel costs, as well as disruption caused by Air Traffic Control outages.
An incident at National Air Traffic Services (Nats) on September 8 led to the cancellation of more than 2,000 flights and impacted hundreds of thousands of passengers.
Annual fuel bill expected to reach 8.9 billion euros
IAG said its total fuel costs are expected to soar to 8.9 billion euros (£7.28 billion) for the financial year, even with actions to fix prices in advance.
Ongoing efforts to drive savings were helping limit the impact of disruption and non-fuel costs, the company said.
Outlook for the rest of the year
Luis Gallego, IAG chief executive, said: “As a result of the actions we are taking the outlook for the rest of the year, as well as the start of next year, is positive.”
