Iberia is expected to post a record operating loss in FY2009 of EUR335 million, according to analysts’ forecasts (Reuters, 20-Feb-2010). The loss is expected to reflect declines in premium travel and yields, and overall extreme revenue weakness in the year. Iberia and British Airways are expected to finalise their merger agreement in 1Q2010, although British Airways' GBP3.7 billion pension deficit is still seen as a stumbling block to the proposed agreement.
Iberia set to report record operating loss ahead of British Airways merger
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IAG keeps FY2016 guidance in spite of weak unit revenue as 1Q2016 results benefit from low fuel
IAG's financial results for 1Q2016 are the first indication from a leading European legacy airline group of how this year is working out financially. For IAG the seasonally weak first quarter went well, with operating profit increasing by more than six times and the net result recording a rare positive figure.
Unit revenue weakness, seen in 2015, continued into 1Q2016 and accelerated its fall after the Brussels terrorist attacks. Coming relatively soon after the Paris attacks, this event may have a slightly longer impact than previous incidents of this nature. IAG's unit cost fell more rapidly than unit revenue, thanks to lower fuel prices. With pricing expected to remain a little softer than previously anticipated, IAG is accelerating cost measures and expects underlying ex fuel unit cost to fall by 1% in FY2016.
IAG still expects more than EUR900 million of year-on-year operating profit improvement in 2016, with a further margin increase. The IAG group is already the most profitable of Europe's three leading legacy airline groups, and the gap looks set to widen this year.
Asia-Europe slowest-growing major market but dynamic: AF-KLM and SIA shrink as oneworld, China grow
Asia-Europe, which is one of IATA's big four international markets, has become the slowest-growing. The market underwent RPK expansion of only 1.5% in Jul-2016, the latest data available. Uncertainty in Europe and terrorism fears mean that some Asian travellers choose Australia and North America or, as IATA has flagged – travel within Asia, which has expanded by nearly double digits.
Although market expansion was slow in the first part of 2016, so too was capacity. Yet this changed in Jul-2016 as capacity increased more quickly, perhaps as airlines expected a stronger summer. Despite slow passenger growth, dynamics are highly varied – except for yield declines. The combined RPK growth of IAG (7.2%) Cathay Pacific (3.7%) and Finnair (8.7%) was not enough to offset the contraction of the largest airline in the market, AF-KLM (7.9%).
From the reported geographic data by all major airlines, load factors are falling.