Fuels costs drag on British Airways' parent's profits

British Airways’ parent company International Airlines Group has seen profits slump amid soaring fuel costs.

The group saw pre-tax profits tumble to £852 million in the three months to the end of June, from £1.3 billion a year earlier.

The company’s combined fuel costs and emissions charges rose by £353 million, representing a 23 per cent spike linked to the conflict in the Middle East.

Its revenue was stable at £7.6 billion, while operating profit was down 25 per cent to £1.1 billion.

Chief executive Luis Gallego said the group has “excellent fundamentals”, and its diverse portfolio of brands means it is well positioned to deal with “near-term headwinds”.

The company – which also owns the Iberia, Vueling and Level airlines – added it expects demand for travel across its network to “remain strong”.

International Airlines Group’s pre-tax profits for the six months to June 30 were down 19 per cent from £1.5 billion to £1.2 billion.

Revenue over the period rose by one per cent to £13.8 billion.

Luis added: “We are well positioned to deal with near-term headwinds with a diverse portfolio of world-class brands in large and attractive markets; industry-leading margins; significant free cash flow and a strong balance sheet; and attractive shareholder returns.

“We remain confident in our business model and strategy that has made us one of the best-performing airline groups in the world.”

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