British Airways has announced a good set of full-year results, exceeding its operating profit target and reducing its non-fuel unit costs
| Full year headlines | IAG full year headlines |
|---|---|
| Operating profit £1.375bn* (2014: £975m) | IAG €2,335m operating profit (2014: €1,390m) |
| Passenger unit revenue 4.1 per cent worse at constant currency* | Iberia €247m operating profit (2014: €50m) |
| Non-fuel unit costs 2.6 per cent better at constant currency* | Vueling €160m operating profit (2014: €141m) |
| Customer recommendation up one point | Aer Lingus €35m since joining on August 18, 2015 |
All IAG figures are before exceptionals
| Q4 headlines | |
| Operating profit £374m* (2014: £222m) | |
| Passenger unit revenue 2.6 per cent worse at constant currency* | |
| Non-fuel unit costs 3.7 per cent better at constant currency* | |
The management bonus also triggered, with amounts dependant on individual performance. BA’s non-fuel unit costs for the full year reduced by 2.6 per cent at constant currency and fuel costs fell too. The drop in oil prices hit demand on popular oil routes such as Lagos, Houston and Aberdeen.
The market remains highly competitive and this was reflected in revenue figures. Overall, passenger unit revenue fell by 4.1 per cent for the year, although there was an improvement in the final quarter.
BA was disciplined with capacity growth in 2015, adding two per cent from new routes and the additional seats in the refurbished short-haul cabins. Satisfaction scores improved by one per cent, and punctuality improved significantly in Q4.
Announcing results for IAG, Willie Walsh, Chief Executive Officer, said: “We’re reporting very strong full year results with an operating profit before exceptional items of €2,335m including Aer Lingus. At constant currency, passenger unit revenue was down 3.5 per cent with non-fuel unit costs down 3.9 per cent and fuel unit costs down 17.2 per cent.
“Aer Lingus has made a positive contribution of €35m operating profit since it joined the group on August 18 last year.
“These results are in line with our recent target and have exceeded our original 2015 operating profit target of €1.5 billion that we set in 2011. It’s undoubtedly been a good year but it’s also been challenging with extreme volatility in the currency and fuel markets. The benefits gained from lower fuel prices have been partially offset by the stronger US dollar.
“In the quarter, we made an operating profit before exceptional items of €530 million including Aer Lingus.
“We’re pleased to confirm that the Board is proposing a final dividend to shareholders of 10 euro cents per share, which brings the full year dividend to 20 euro cents, subject to shareholder approval at our AGM in June.”
Trading outlook
In 2016, IAG expects to generate an absolute operating profit increase similar to 2015. Revenue trends in Q1 appear broadly in line with those experienced in Q4 2015.