Iberia swings to second-quarter profit

Iberia A320. Photo: Courtesy Iberia.

Iberia Friday reported second-quarter net income of €31 million ($39.4 million), reversed from a loss of €73 million in the year-ago quarter, a turnaround the airline attributed to the recovery of international markets, cost control and increased productivity.

The airline estimated the disruption to air travel owing to the volcanic ash-related EU airspace closures in April and May cost it about €20 million in lost revenue. It cancelled 883 flights during the airspace closures.

Operating revenue rose 10.2% to €1.18 billion while expenses lowered 2% to €1.13 billion. Recurring EBIT was €3 million compared to negative €130 million last year.

Traffic dipped 0.7% to 12.6 billion RPKs on a 2.2% increase in capacity to 15.3 billion ASKs, producing a load factor of 82.5%, up 1.3 points. Yield lifted 7.7% to €0.065 cents as RASK climbed 9.4% to €0.054 cents.

IB, which is planning to finalize its merger with British Airways by the year's end (ATW Daily News, July 15), said it posted a €20.9 million net loss for the first six months of 2010, an 87.4% improvement over a €165 million deficit last year.

IB said in a statement, "The recovery in income was due largely to stronger demand in international markets, and especially in business traffic, but also to heightened sales efforts by the company. However, the domestic market remained in the doldrums."