ATW Daily News

Iberia's third-quarter profit falls nearly 80%

Thursday November 13, 2008

Iberia reported consolidated third-quarter net income of €30.4 million ($38.6 million), down 79.5% from €148.2 million in the year-ago period, on rising fuel costs and weaker demand.

Operating revenue slipped 0.6% to €1.45 billion while costs rose 8.7% to €1.43 billion. EBIT fell 88.4% to €16.2 million from €139.3 million last year. Yield lifted 0.5% to 7.43 euro cents

Iberia did not give a full-year forecast, but Chairman and CEO Fernando Conte indicated during a conference call with analysts that the airline would remain in the black. "We are confident that Iberia will achieve a balanced result from total operating activities and a positive net income," he said.

Conte remained equally confident regarding IB's merger with British Airways, although he reckoned BA's widening pension gap would affect the shareholding of the new company (ATWOnline, Oct. 9). "There are still some difficulties and one of them is BA's pension deficit, but we are confident we will be able to reach a successful agreement for both parties, although it will take some more time and will likely have an impact on the relative value of both companies," he said.

The group is expected to announce a new strategic plan, a follow-up of its 2006-2008 Director Plan, in January.

For the first nine months of 2008, net income was €51.1 million, down 77.1% from €223 million in the year-ago period. Operating revenue was flat at €4.12 billion and costs increased 5.6% to €4.14 billion

Nine-month traffic fell 0.4% to 40.58 billion RPKs on a 1.1% lift in capacity to 49.68 billion ASKs, producing a 1.2-point dip in load factor to 80.8%. In line with its strategy, domestic capacity declined 16.3%, long-haul rose 4.9% and international medium-haul ASKs climbed 4.7%.

by Cathy Buyck

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