International Airlines Group reported a significant increase in net profit on Friday and lifted its full-year profit guidance.
Operating profit before exceptional items came in at €1.39 billion in the past year compared to a result of €770 million in the prior period, Europes third-largest airline group said in a statement.
IAG, owner of British Airways and the Spains top airline Iberia, projected to generate an operating profit of €2.2 billion in 2015, 22% up compared to its previous estimate of €1.8 billion.
The company also said that Iberia showed signs of improvement over the past year and reported an operating profit of €50 million, which compares to an operating loss of €166 million that the unit reported a year earlier.
The positive result marks Iberias first in six years, driven by major restructuring efforts, including job cuts and salaries reductions. Over the past year IAG spent €260 million on labor agreements.
“The airline’s turnaround has been remarkable, both financially and operationally, and we’re very proud of its achievement especially its strong cost discipline,” said Chief Executive Willie Walsh, while also projecting positive results to continue in 2015.
Meanwhile, British Airways stated an operating profit of €1.22 billion, up from the €762 million stated in 2013, while the budget airline Vueling, which IAG took control over in 2013 after raising its stake to around 90%, reported a slight increase in operating profit to €141 million.
Revenue for the reported period was €20.17 billion, up 8% compared to the prior period as the company carried 15% more passengers and reached 77 million.
Mr. Walsh said the positive impact from the oil price reduction was partly offset by IAGs hedging practices and a significant currency impact. However, fuel units costs slid 7.8% as the company implemented more fuel-efficient planes.
The carrier is also trying to purchase Irelands Aer Lingus in an attempt to strengthen its grip over the trans-Atlantic routes and increase its landing spots at Heatrow, Europes most busiest airport.
Despite the backing of the companys board, IAG may not see the deal closed as the Irish government, which hold a 25% stake in Aer Lingus, said earlier this week that it cannot accept the companys current offer as it does not provide enough information on IAGs future plans of the countrys flag carrier.
“We remain very interested in acquiring Aer Lingus and at this stage we have nothing additional to add to what weve already said,” Mr. Walsh said.
Additionally, the deal would also require the approval of budget carrier Ryanair, which holds a 30% stake.
IAG lost 0.09% on Thursday and closed at GBX 559.50 in London. The stock climbed 2.68% on Friday to GBX 574.50 at 13:29 GMT, marking a one-year increase of 27.16%. The company is valued at £11.33 billion.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
