IAG returns to profit in 2Q2013. Is this a turning point?

IAG returned to an operating profit in 2Q2013, after a loss in the same period a year ago and a widening of its loss in 1Q2013. BA's operating profit grew sharply and Iberia's operating loss was cut by more than 60%. This was the first quarter in 11 that saw the Spanish carrier post a year-on-year improvement in its operating result. Iberia's return to profit will depend, among other things, on its management negotiating labour productivity gains under its transformation plan.

IAG's non-fuel costs per ASK were broadly stable in 2Q (excluding newly acquired LCC Vueling) after rising in 1Q, supporting IAG's contention that the restructuring programme would start to bear fruit in the latter part of the year. Moreover, unit revenue trends remain positive under tight capacity control. In Vueling, IAG now owns Europe's third largest LCC, putting it ahead of rivals Air France-KLM and Lufthansa in the scale (and cost efficiency) of its low-cost operations. Has IAG reached a turning point?