IAG SA managed to report a profit in the first quarter even after the impact of a European fare war that pushed its biggest rivals to a loss.
Shares of the British Airways owner rose as much 5.1% after it posted an operating profit of 135 million euros ($151 million) for the first three months on Friday, while reiterating its full-year guidance and predicting that pricing will pick up in coming months.
The earnings figure was still 60% down from a year earlier as higher fuel costs and the timing of Easter further eroded margins. Deutsche Lufthansa AG reported a 336 million-euro loss and Air France-KLM Group suffered a 303 million-euro shortfall.
“Most European airlines have reporting losses in the quarter. That’s what sets us apart,” IAG Chief Executive Officer Willie Walsh said on a conference call. He suggested that the “capacity issue” is set to ease and stood by a forecast for annual earnings in line with last year’s 3.48 billion euros.
Shares of London-based IAG, which hit a two-year low on Thursday, traded 3.5 percent higher at 506.60 pence as of 8.24 a.m. That pared the stock’s slide this year to 17%, compared with declines of 4.4 percent and 6.9 percent at Lufthansa and Air France-KLM respectively.
IAG’s passenger unit revenue, a measure of fares, fell 0.8% at constant currencies in the quarter and the fuel bill came in 16% higher.
