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British Airways owner doubles profits
March 1, 2012

Strong demand for long-haul flights from London has helped British Airways’ parent company to more than double its profits.

International Airlines Group, which also includes Spanish carrier Iberia, made an operating profit of €485 million in 2011 – up from a profit of €225 million during the previous year.

But IAG chief executive Willie Walsh has warned about the effects of increasing fuel bills and the 8 per cent rise in the rates of Air Passenger Duty from April 1.

Walsh also said that BA’s traffic this summer may be “impacted” by the Olympic Games although the event should be “positive for the long-term position of London as a global destination”.

IAG saw its passenger revenue rise by 11% to €13.7 million as capacity went up by 7.1% in 2011. The company was also boosted by €74 million in cost cutting and synergies from the merger between BA and Iberia, which was completed in early 2011.

But IAG’s fuel costs increased by 29.7 per cent to €5.1 billion for the year. The company added that at current oil prices and exchange rates, it would face a further fuel bill increase of more than €1 billion in 2012.

The company said that demand in London “remains strong” particularly for BA’s long-haul premium cabins on transatlantic routes.

"The performance of our airlines reflects the different markets in which they operate,” said Walsh. “The north Atlantic market remains strong, benefitting British Airways. However, British aviation's competiveness is undermined by the UK government's determination to continually increase APDAir Passenger Duty (UK only):

An excise duty charged on the carriage of passengers flying on an aircraft with an authorised take off weight of more than ten tonnes or more than twenty seats. Due when the aircraft first takes off on the passenger’s flight and is payable by the aircraft operator. with the latest rise due this April.

"Iberia's challenge is its exposure to financial uncertainty in the eurozone in a highly competitive marketplace with no-frills airlines, high speed rail and growing competition from more efficient long-haul airlines.”

Source :- http://www.abtn.co.uk/news/
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