International Airlines Group (IAG) surprised a few on February 28, by announcing a long-haul fleet renewal for British Airways. The airline has ordered 18 Boeing 777-9s for delivery between 2022 and 2025, with options on 24 more.
The 777-9s will replace 4 777-200s and 14 747-400s, of which BA currently operates 34 as the world’s largest operator. But time is running out for the aging Jumbo Jet, despite getting a cabin update only just a short while ago. In its 4-class, 325 seat cabin configuration the 777-9 will seat only 20 fewer passengers than the 747 but has a 30% better fuel cost per seat. The order needs to be finalized before it will appear in Boeing‘s list.
IAG announced an operating profit before exceptional items of EUR 3.230bln, compared to 2.950bln in 2017. Profit after tax before exceptional items increased to EUR 2.481bln from 2.231bln the previous year. Total revenues were EUR 24.406bln, up from 22.880bln. The Group increased capacity (available seat kilometers) by 6.1% to 324.808mln.
Fuel costs increased by 30%, while ATC disruptions and currency fluctuations cost IAG EUR 129mln extra. Load factor is the highest since the formation of IAG in 2011, at 83.3%.
Adjusted earning per share were up 15.1% to EUR 1.17. Net debt increased by 7.7% to EUR 8.355mln.
By airline, British Airways operating profit before exceptional items increased by GBP 203mln to GBP 1.952bln. Higher load factors and yields helped unit revenues and margins. BA added 2.5% extra capacity, especially on North American routes.
Irish airline Aer Lingus recorded its highest operating profit ever at EUR 305mln, up 37mln, despite lower yields but thanks to significant cost savings. Aer Lingus increased capacity in 2018 by 10% by opening long-haul routes to Philadelphia and Seattle.
In Spain, Iberia (including Level) improved its operating profit by EUR 61mln to EUR 437mln. A higher load factor helped offset lower yields, while Iberia too benefitted from internal cost savings. Level increased capacity by 6.1%, specifically by opening Vienna as its new hub in July.
Low-cost carrier Vueling improved its operating profit by only EUR 12mln to EUR 200mln, mainly caused by ATC issues and strikes at its Barcelona hub.
Guidance for 2019 is on par with the 2018 result.
British Airways will take delivery of the first Boeing 777-9 in 2022. (Boeing)