BA has reported a solid set of results in what is traditionally a tough quarter – and announced a new bonus scheme for the year.

The airline has thanked colleagues for meeting Q1 targets for profit, service and punctuality in the first three months of the year despite a challenging revenue environment.

Customer recommendation was on target, up two points from last year, and the airline met its punctuality target, doing well to recover quickly from disruption.  BA demonstrated improving cost control, but underperformed compared to other airlines in the group.

BA headlines

  • Customer recommendation up 2.2 points vly
  • Punctuality ‘within 15 minutes’ on target at 83 per cent
  • Operating margin 7.7 per cent
  • Underlying non-fuel CASK 0.5 per cent worse
  • Return on invested capital ROIC 12.6 per cent

IAG headlines

  • Operating profit €155m* (2015: €25m)
  • Passenger unit revenue down 4.7 per cent**
  • Non-fuel unit costs up 0.6 per cent**
  • Fuel unit costs down 23.4 per cent*

* before exceptionals ** at constant currency

Willie Walsh, IAG Chief Executive Officer, said: “We’re reporting an operating profit of €155 million before exceptional items which is up by €130 million compared to last year. This is a good performance with a strong increase in what is traditionally the weakest quarter. Total revenue was up 7.9 per cent and total cost per ASK decreased by 6.1 per cent.

“January and February’s revenue was in line with Q4 2015 trends. March revenue was affected by the timing of Easter and the Brussels terrorist attacks with the latter continuing into quarter two.

“Our productivity has improved 5.9 per cent and the underlying non fuel unit costs performance continued to show improvement across our companies.”

Trading outlook –Revenue trends in quarter two have been affected by the aftermath of the Brussels terrorist attacks, as well as some softness in underlying premium demand. As a result, IAG has moderated its short term capacity growth plans. The Group also expects to reduce its underlying ex-fuel unit costs for the full year by around one per cent. Consequently, in 2016, IAG still expects to generate an absolute operating profit increase similar to 2015.

IAG is no longer reporting individual airline performance at Q1 and Q3.  More detailed information for BA will be available at the half and full year.

some softness in underlying premium demand. As a result, IAG has moderated its short term capacity growth plans. The Group also expects to reduce its underlying ex-fuel unit costs for the full year by around one per cent. Consequently, in 2016, IAG still expects to generate an absolute operating profit increase similar to 2015.

IAG is no longer reporting individual airline performance at Q1 and Q3.  More detailed information for BA will be available at the half and full year.