IAG still making a loss

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This topic contains 28 replies, has 13 voices, and was last updated by  SimonS1 2 May 2015
at 11:51
.

Viewing 15 posts - 1 through 15 (of 29 total)

  • Anonymous

    BusinessBabble
    Participant

    Show me a European airline that makes a profit in calendar Q1?


    AnthonyDunn
    Participant

    IAG reports progress in Iberia turn-round

    http://www.ft.com/cms/s/0/284f2224-d744-11e3-80e0-00144feabdc0.html#axzz31DVdvcMP

    International Airlines Group reported further progress with the turn-round of Iberia, its loss-making Spanish subsidiary. Iberia narrowed its first-quarter operating loss to €111m, compared with €202m in the same period last year, as a sweeping restructuring programme continued to improve its performance.

    IAG issued earnings guidance for 2014 for the first time, saying it expected to generate operating profit of at least €1.3bn this year. This would compare with an operating profit of €770m last year, and the anticipated earnings growth is partly due to Vueling, the Barcelona-based low-cost carrier that IAG took full ownership of in April 2013.

    IAG’s earnings guidance was broadly in line with analysts’ expectations, although the group’s shares were up 1.4 per cent at 410.1p in early morning trading. In what is traditionally a weak quarter for many airlines, because it coincides with Winter in the northern hemisphere, IAG’s pre-tax loss fell to €203m in the three months to March 31, from €670m a year ago. Revenue rose 6.7 per cent to €4.2bn.

    ….British Airways, IAG’s UK subsidiary, recorded an operating loss of €5m in the first quarter, compared to [a loss of] €72m in the same period last year, and Mr Walsh said the carrier was benefiting from the introduction of new passenger jets including the Airbus A380 and Boeing 787.

    At €30m, Vueling’s operating loss in the first quarter was the same as one year ago, but Mr Walsh highlighted how it has been undergoing significant expansion.


    WillieWelsh
    Participant

    The bottom line a loss has been made. The usual people can dress it up how they like and no doubt they will as usual but nothing will hide the fact that IAG with Walsh at the helm has made a LOSS, AGAIN.


    AnthonyDunn
    Participant

    @ WillieWelsh – 10/05/2014 20:51 GMT

    So the Financial Times represents “the usual people” does it? Feel free to check for yourself. And in light of your rather shrill comments, can you provide us with a comprehensive list of European legacy carriers that turned a profit over the same reporting period, together with accompanying FT commentary – just as I have provided?


    WillieWelsh
    Participant

    AnthonyDunn – 11/05/2014 00:58 GMT

    I’m not sure what self important little point your original post was making. The bottom line remains that IAG made a loss and you can spin that any way you would like to they made a loss. Are you in denial about the fact that IAG made a loss?

    My post made no reference to any other airline simply to IAG who as before, made a loss.


    AnthonyDunn
    Participant

    @ WillieWelsh – 11/05/2014 06:59 GMT

    What a very silly response. My contribution above is a direct lift (slapped wrist) from the FT. No spin of mine, no personal commentary just the FT’s own version. If you’ve something intelligent to say, I would suggest that you direct your line of argument to the FT’s transport sector team.

    In the meantime, you could do with some work on understanding the annual cyclicality of airline revenues and earnings because you clearly don’t get this. You might like to start with Easyjet and Ryanair because any mention of IAG gets you in such a funk that it renders you incapable of seeing the wood from the trees.

    EDITED:

    To add to this, courtesy of @ transtraxman – 11/05/2014 11:00 GMT

    CAPA comes up again with a detailed analysis, 11 May 2014

    “IAG’s 1Q losses narrow. Discipline over capacity, capital and costs provides momentum”

    http://centreforaviation.com/analysis/iags-1q-losses-narrow-discipline-over-capacity-capital-and-costs-provides-momentum-167403

    Interesting to see that QUOTE Asia-Pacific experienced the strongest increase in unit revenues, with ex currency RASK growing by 7.4% on a 2.7% increase in ASKs.

    Describing the region as the “star performer”, Mr Dupuy [IAG CFO] said that the strength was mainly due to BA’s Sydney and Shanghai routes. By contrast, the region AMESA (Africa, Middle East, South Asia) saw ex currency RASK fall by 1.7%, with ASKs increasing by 5.8%. The capacity growth was focused on Johannesburg and also on India, which Mr Dupuy called “a bit over-served”. ENDS

    And to answer my own question about other European legacy carriers 1Q2014 financial performance: Europe’s “premier” airline:

    http://centreforaviation.com/analysis/lufthansas-1q2014-losses-narrow-but-new-its-ceo-has-a-busy-agenda-with-helpful-partners-scarce-166655

    which contains the revealing comment that the LH Passenger Airline Group improved its result, but only because of a new depreciation policy. Whilst over at AF/KL:

    http://centreforaviation.com/analysis/air-france-klm-1q-losses-narrow-but-needs-more-cargo-restructuring-will-financial-targets-slip-165774

    Willie, you are perfectly welcome to present your critique of the FT and CAPA’s pieces and point out the flaws in their IAG 1Q2014 analysis which, as others have correctly pointed out, are just that: three months’ worth. I for one will be fascinated to read where you think the specialist sector analysts have got it wrong.


    HedgeFundFlyer
    Participant

    Some astonishingly simplistic analysis in this thread.

    You would have to be innumerate and financially illiterate not to appreciate the progress IAG has made in the last two years.

    Screaming the word “LOSS” at the top of your voice is not only childish and, I would suspect, intended to be deliberately inflammatory, it betrays a total lack of understanding of IAG and its prospects.


    DavidGrodentz
    Participant

    This is my first post BTW so please treat me gently

    BA have reduced their loss for the first quarter. This is a quarter where most airlines traditionally make a loss as they have high fixed costs but lower revenues. Isn’t this a good thing for both BA and UK PLC

    Yes, it is still a loss but shouldn’t they be congratulated on the improvement


    AnthonyDunn
    Participant

    @ DavidGrodentz – 11/05/2014 16:45 GMT

    +1 To the point.


    WillieWelsh
    Participant

    AnthonyDunn – 11/05/2014 10:23 GMT

    Have IAG made a loss during the period in question? A yes or no answer will do, it’s simple enough.

    When you answer correctly I will rest my case and perhaps you could delete your posts in which you seem to want to contradict the truth of the situation.

    I’m not interested in analysis by the people with opinions which equates to spin or indeed what other airlines might have done or not, the subject of the thread is IAG.

    A loss, yes or no?


    AnthonyDunn
    Participant

    @ WillieWelsh – 11/05/2014 21:12 GMT

    Oh dear, here we go again…

    The simplistic answer (and something that I have never denied even though you appear unable to see this) is that yes, BA has made a Q12014 loss – and in common with LH, AF/KL and quite a few other European carriers. To put this in context, read what the FT and CAPA have posted.

    Now time for you to address the issues raised by me and other posters Willie. Do you not understand the basic economics and annual cycle of airline earnings? A simple answer will do: yes or no.


    BigDog.
    Participant

    – Walsh has been at the helm for over 8 years now and yes he is still delivering a loss. In 2005 Walsh inherited a company with the fundamentals to be the “World’s Favourite Airline” along with a near euro €1bn profit.
    – IAG has underperformed the FTSE by 5-10% this year.

    https://uk.finance.yahoo.com/echarts?s=IAG.L#symbol=IAG.L;range=6m

    – IAG has underperformed AF/KLM by around 40% this year and also over a 2 year span which Transtraxman prefers to note. (Enter AF.PA in compare to view the AirFrance comparison line.)

    – Methinks AF has been boosted by not throwing any more cash at Alitalia…Just think what the BA opportunities would be (as well as its share price) if it had avoided Walsh’s folly in hooking up with IB.

    However, am more interested in the longer term fundamentals which current financials are merely a part of and which CAPA et al don’t cover…..
    “Andrew Smithers argues in his latest book “The Road to Recovery” that the culture of high bonuses endangers the global economy. CEOs incentivised to cut costs no matter what in order to maximise shareholder returns (and boost the price of the shares they themselves own in the company) think for the short term only.

    But for the world economy to prosper, we need CEOs that have the vision and drive to think long term. To invest, to create new ways of doing things, to take risks, to hire people. The editor in chief of MoneyWeek, Merryn Somerset Webb, argues on her blog that if companies were to offer less guidance to the markets, we’d all (including the CEOs) be able to get on with pulling the economy off the ground.”


    AnthonyDunn
    Participant

    @ BigDog. – 12/05/2014 08:03 GMT

    Yes, amidst the chaff, the point has been lost that the fixation with short-term reporting cycles completely skews behaviour around a fixation with short-term measures and numbers rather than what is in the long-term interests of the business. But that, alas, is the Anglo-American model that we are, pro tem, lumbered with whereas the Germans (and their “Rhineland” model) are not so fixated. The proof is in the long-term….

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