British Airways, Iberia to Cut Capacity as Revenue Climbs
The parent of British Airways and Iberia said that net profit rose to €280 million ($374.9 million), a 220% increase over the €127 million reported a year earlier. Revenue was up 6.7% to €5.1 billion, and operating profit rose 55% to €380 million.
IAG CEO Willie Walsh announced plans to cut capacity across its network, “taking out frequencies where we have multiple frequencies,” noting on a conference call with reporters that airlines have added capacity on the transatlantic routes that contribute greatly to IAG’s coffers faster than demand has grown.
The company, according to Walsh, has been “more disciplined than our competitors who are having to make bigger adjustments because maybe they saw the sweets on the table and got a little bit greedy.”
The London-based airline operator also announced operating results for the first six months of the year.
Capacity as reported in available seat kilometers was up 11.3% to 120.9 billion. System traffic increased to 95.3 billion revenue passenger kilometers, a 10.4% year-over-year increase. Load factor declined to 80.7% from 81.3%.
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