IAG - 2014 full year results: ottimi risultati per BA, IB e VY


A

AZ209

Principiante
Utente Registrato
24 Ottobre 2006
16,944
71
0
Londra.
Performance summary:[TABLE="class: bmm, width: 737"]
[TR="class: blf"]
[TD="class: blm"]
[/TD]
[TD="class: blj"]
[/TD]
[TD="class: blj"]
[/TD]
[TD="class: blh"]
[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: bkw"]
[TD="class: bld"]
[/TD]
[TD="class: bla, colspan: 2"]Year to December 31[/TD]
[TD="class: bky"]
[/TD]
[TD="class: bkx"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkv"]Financial data € million [/TD]
[TD="class: bkt"]2014 [/TD]
[TD="class: bks"]2013 [/TD]
[TD="class: bkr"]Higher / (lower)[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blm"]Passenger revenue[/TD]
[TD="class: blj"]17,825 [/TD]
[TD="class: blj"]16,264 [/TD]
[TD="class: blh"]9.6 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkq"]Total revenue[/TD]
[TD="class: bkp"]20,170 [/TD]
[TD="class: bkp"]18,675 [/TD]
[TD="class: bko"]8.0 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkn"]Operating profit before exceptional items[/TD]
[TD="class: bkm"]1,390 [/TD]
[TD="class: bkm"]770 [/TD]
[TD="class: bkk"]80.5 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkq"]Exceptional items[/TD]
[TD="class: bkp"](361)[/TD]
[TD="class: bkp"](243)[/TD]
[TD="class: bko"]48.6 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkn"]Operating profit after exceptional items[/TD]
[TD="class: bkm"]1,029 [/TD]
[TD="class: bkm"]527 [/TD]
[TD="class: bkk"]95.3 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkq"]Profit after tax[/TD]
[TD="class: bkp"]1,003 [/TD]
[TD="class: bkp"]151 [/TD]
[TD="class: bko"]564.2 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkn"]Basic earnings per share (€ cents)[/TD]
[TD="class: bkm"]48.2 [/TD]
[TD="class: bkm"]6.4 [/TD]
[TD="class: bkk"]41.8pts[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkv"]Operating figures [/TD]
[TD="class: bkj"]2014 [/TD]
[TD="class: bkj"]2013 [/TD]
[TD="class: bkr"]Higher / (lower)[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blm"]Available seat kilometres (ASK million)[/TD]
[TD="class: blj"]251,931 [/TD]
[TD="class: blj"]230,573 [/TD]
[TD="class: blh"]9.3 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkq"]Seat factor (per cent)[/TD]
[TD="class: bkp"]80.4 [/TD]
[TD="class: bkp"]80.8 [/TD]
[TD="class: bko"](0.4pts)[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blm"]Passenger unit revenue per ASK (€ cents)[/TD]
[TD="class: blj"]7.08 [/TD]
[TD="class: blj"]7.05 [/TD]
[TD="class: blh"]0.4 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkq"]Non-fuel unit costs per ASK (€ cents)[/TD]
[TD="class: bkp"]5.08 [/TD]
[TD="class: bkp"]5.18 [/TD]
[TD="class: bko"](1.9)%[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bki"]€ million[/TD]
[TD="class: bkh"]December 31,[/TD]
[TD="class: bkh"]December 31,[/TD]
[TD="class: bkg"]Higher / (lower)[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkj"]2014[/TD]
[TD="class: bkj"]2013[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blm"]Cash and interest-bearing deposits[/TD]
[TD="class: blj"]4,944 [/TD]
[TD="class: blj"]3,633 [/TD]
[TD="class: blh"]36.1 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blm"]Adjusted net debt[SUP](1)[/SUP][/TD]
[TD="class: blj"]6,081 [/TD]
[TD="class: blj"]5,701 [/TD]
[TD="class: blh"]6.7 %[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: blm"]Adjusted net debt to EBITDAR[/TD]
[TD="class: blj"]1.9 [/TD]
[TD="class: blj"]2.5[/TD]
[TD="class: blh"](0.6)[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[TR="class: blf"]
[TD="class: bkq"]Adjusted gearing[SUP](2)[/SUP][/TD]
[TD="class: bkp"]51%[/TD]
[TD="class: bkp"]50%[/TD]
[TD="class: bko"]1pt[/TD]
[TD="class: blg"]
[/TD]
[/TR]
[/TABLE]
[SUP](1) [/SUP]Adjusted net debt is net debt plus capitalised operating aircraft lease costs.[SUP](2) [/SUP]Adjusted gearing is adjusted net debt, divided by adjusted net debt and adjusted equity.


Willie Walsh, IAG Chief Executive Officer, said:

"We're reporting strong full year results with an operating profit before exceptional items of €1,390 million which is up 80.5 per cent. Total revenue was up 8.0 per cent with non-fuel costs up 7.0 per cent and fuel costs up 0.6 per cent on capacity growth of 9.3 per cent.


  • "Iberia made an operating profit of €50 million compared to an operating loss of €166 million last year. The airline's turnaround has been remarkable, both financially and operationally, and we're very proud of its achievement especially its strong cost discipline. In 2013 we said our intention was for Iberia to breakeven in 2014 and it has fulfilled that promise.


  • “British Airways’ operating profit increased to €1,215 million up from €762 million last year which shows significant progress towards its long term targets.


  • Vueling made an operating profit of €141 million, compared to an operating profit of €139 million in 2013, with the airline focusing on flexible growth.

"We achieved a strong unit cost performance, down 4.1 per cent, through increased productivity, supplier cost savings and lower fuel unit costs. The latter was boosted by the introduction of more efficient aircraft into our fleet and lower fuel prices in the last quarter of the year. However, the positive effect of the oil price reduction has been partly offset by hedging and significant currency impact.

"In the quarter, we made an operating profit before exceptional items of €260 million which is up from €113 million last year. Revenue for the quarter was up 9.9 per cent. Non-fuel costs were up 10.5 per cent and fuel costs decreased by 0.4 per cent on capacity growth of 5.8 per cent."


tutti i risulati piu' nel dettaglio qui:
http://www.iairgroup.com/phoenix.zhtml?c=240949&p=irol-newsArticle_Print&ID=2020956
 
In occasione dell'annuncio degli ottimi risultati 2014 - hanno anche aggiornato (in crescita) la previsione per il 2015.
Previsti olte €2.2miliardi di profitto operativo del gruppo

IAG Upgrades 2015 Profit Forecast

February 27, 2015

IAG on Friday raised its 2015 profit forecast by more than 20 percent, outperforming struggling continental rivals.
It now expects 2015 operating profit in excess of EUR€2.2 billion, compared to the EUR€1.8 billion it had said it was targeting, the latest in a series of upgrades.
For 2014, it reported operating profit up 81 percent to EUR€1.39 billion.
British Airways-owner IAG, which is trying to acquire Ireland's Aer Lingus, said the profit increase would be driven by cost control across the group and growth at Iberia which until last year had dragged on the business.
Created by a merger in 2011, IAG put a priority on cutting staff costs before rival European flag carriers Lufthansa and Air France-KLM, and is seeing the benefits of a painful restructuring at Iberia, where it cut jobs and salaries.
IAG is also a step ahead of Europe's other traditional airlines through its exposure to the continent's budget travel sector, having acquired discount carrier Vueling in 2013, enabling it to compete with Ryanair and easyJet.
"We expect Iberia to continue to improve its profitability given the trajectory that it's on. The performance to date for Iberia has been tremendous and we expect that to continue in 2015," chief executive Willie Walsh told reporters.

BROADER STRATEGY

IAG's performance shows the benefits of its broader strategy, including from long-haul, where it is enjoying strong demand on trans-Atlantic routes, balanced with exposure to fast-growing, budget short-haul flights.
Both Air France and Lufthansa, hit by strikes last year, are trying to expand their low-cost operations at the same time as reducing costs in their main businesses, emulating IAG's moves over the last four years.
IAG is also getting an extra boost from economic growth in Britain and Spain, its two domestic markets.
Already the biggest European airline by market cap, IAG could grow further by buying Aer Lingus.
But its EUR€1.36 billion (USD$1.5 billion) approach is yet to get the backing of the Irish government, which owns a 25 percent stake.
"We remain very interested in acquiring Aer Lingus and at this stage we have nothing additional to add to what we've already said," Walsh said when asked about the deal.

(Reuters)
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In realtà i complimenti vanno fatti soprattutto a BA, che ha registrato un risultato operativo di 1.215 M€ contro i 762 del 2013.
IB, pur migliorando sensibilmente la perdita operativa di 166 M€ del 2013, non è andata oltre i +50 M€ nel RO.
VY migliora in modo impercettibile (+141 contro +139 M€), non un gran risultato visto l'aumento di attività della LC nell'ultimo anno.
 
belumosi ha detto:
In realtà i complimenti vanno fatti soprattutto a BA, che ha registrato un risultato operativo di 1.215 M€ contro i 762 del 2013.
IB, pur migliorando sensibilmente la perdita operativa di 166 M€ del 2013, non è andata oltre i +50 M€ nel RO.
VY migliora in modo impercettibile (+141 contro +139 M€), non un gran risultato visto l'aumento di attività della LC nell'ultimo anno.
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Caro Belumosi, su IB hai ragione in termini assoluti, ma se ci guardiamo in casa i loro conti sono un gioiellino :D.
Quello che invece sottolineerei, come giustamente hai fatto, è la performance di VY che, forse, non ha ancora trovato la sua strada.
 
belumosi ha detto:
IB, pur migliorando sensibilmente la perdita operativa di 166 M€ del 2013, non è andata oltre i +50 M€ nel RO.
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Per IB si tratta di un +130% di utile rispetto al 2013, oltre che del ritorno al profitto dopo 6 anni di perdite. Non mi pare poco. Senza dimenticare che IAG nel suo complesso viene da una perdita di quasi 1 miliardo di euro nel 2012.

Nel 2014 IAG ha generato più di 3.5 miliardi di euro di cassa, numero che ha pari dignità, se non superiore, all'utile nel valutare la salute di un business.

Ristrutturare una compagnia aerea oggi, in Europa, è possibile. Speriamo la prossima sia Alitalia (lo dico soprattutto da italiano).
 
AcrossThePond ha detto:
Per IB si tratta di un +130% di utile rispetto al 2013, oltre che del ritorno al profitto dopo 6 anni di perdite. Non mi pare poco. Senza dimenticare che IAG nel suo complesso viene da una perdita di quasi 1 miliardo di euro nel 2012.

Nel 2014 IAG ha generato più di 3.5 miliardi di euro di cassa, numero che ha pari dignità, se non superiore, all'utile nel valutare la salute di un business.

Ristrutturare una compagnia aerea oggi, in Europa, è possibile. Speriamo la prossima sia Alitalia (lo dico soprattutto da italiano).
Clicca per espandere...

Non ho capito cosa vuoi dire con il miglioramento del 130% di utile, visto che IB aveva una perdita di 166 MEuro nel 2013, ed ora e' passata in attivo. Diciamo una svolta epocale, piu' che un miglioramento. Con il resto sono d'accordo con te.
 
Complimenti a IAG ed alla robustezza dei loro numeri, cosa che in Europa fa impallidire tanti altri. Questo sembra davvero un gruppo solidissimo per il futuro, e non mi stupirei se continuassero cosi a lungo.

Come dice il nuovo slogan Delta, "Keep Climbing"...
 
Dr Gio ha detto:
Non ho capito cosa vuoi dire con il miglioramento del 130% di utile, visto che IB aveva una perdita di 166 MEuro nel 2013, ed ora e' passata in attivo.
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((166 x 130,1)/100) - 166 = 49,97 milioni di euro, spicciolo più, spicciolo meno. Come riportato alla riga "operational profit" del capitolo "financial performance by brand" del comunicato stampa di cui al link nel post 1.

Ma sono d'accordo con te: la performance va ben la di là dell'arida formula per calcolarne la percentuale.
 
flyboy ha detto:
Caro Belumosi, su IB hai ragione in termini assoluti, ma se ci guardiamo in casa i loro conti sono un gioiellino :D.
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Sicuramente. Non di meno il miglioramento è in larga parte da addebitare alla profonda ristrutturazione avvenuta nella compagnia spagnola. Evento eccezionale che quest'anno non si ripeterà. I dati del 2015 ci daranno un'idea più precisa del potenziale di IB in un intero esercizio di gestione ordinaria.
 
AcrossThePond ha detto:
Per IB si tratta di un +130% di utile rispetto al 2013, oltre che del ritorno al profitto dopo 6 anni di perdite. Non mi pare poco. Senza dimenticare che IAG nel suo complesso viene da una perdita di quasi 1 miliardo di euro nel 2012.

Nel 2014 IAG ha generato più di 3.5 miliardi di euro di cassa, numero che ha pari dignità, se non superiore, all'utile nel valutare la salute di un business.

Ristrutturare una compagnia aerea oggi, in Europa, è possibile. Speriamo la prossima sia Alitalia (lo dico soprattutto da italiano).
Clicca per espandere...

In ordine Javier Sanchez Prieto (CFO), Luis Gallego (CEO) e Willie Walsh sono i simboli di una corretta gestione aziendale, tutti profondi conoscitori del settore...
 
IB ha riportato solo un utile operativo? Sarebbe interessante anche il risultato netto.
 
Articolo sulla rinascita di IB.

THE QUIET REBIRTH OF IBERIA

12FEB​
BY DANIEL TSANG / 2 COMMENTS


  • Iberia a Europe-Latin America specialist
  • Iberia’s employee cost falls from 30% of revenue in 2012 to 24.2%
  • Iberia needs A350-1000 more than BA for hot & high missions
  • Iberia’s Madrid hub well placed to capture North Asia-LatAm spillover demand from Heathrow
  • Iberia’s Madrid routings on North Asia-LatAm competitive with Middle Eastern hubs
  • Madrid commands 60.3% & 41.2% of Spain’s LatAm & Asian traffic
  • Spain targets 1 million Chinese tourists by 2020 with 20-25% annual growth
  • Iberia to launch premium economy class: sources
  • Iberia targets 25% employee cost per ASK reduction by 2016 & 35% by 2020
British Airways’ parent International Airlines Group (IAG) is often in the headlines for the right reasons, ranging from its €2.55 a share bid for Irish flag carrier Aer Lingus to Qatar Airways acquiring a 9.99% stake (“Qatar Airways nets a prized catch, expanding westwards“, 5th Feb, 15). But it is another IAG subsidiary, Iberia, that offers invaluable lessons for its European legacy peers.
From being plagued by rigid labour rules, an unsustainably high cost base, stiff low-cost competition in its home market, to becoming a Latin America specialist right-sized for future growth, with a short-haul European network focused on the provision of feed traffic to its Madrid Barajas Terminal 4 hub and a short-haul low-cost subsidiary Iberia Express defending its home turf, Iberia’s transformation is nothing short of remarkable.
And the numbers show. After 5 years of heavy and perennial losses totalling €1.12 billion on an operating level, 2014 is destined to be Iberia’s first year in the black since 2008, with a 3% lease-adjusted operating margin and a 4% return on invested capital (ROIC) in real terms. For the first 9 months of 2014, the oneworld carrier has already posted a €67 million operating profit.
Its “Plan de Futuro” foresees a 10-14% lease-adjusted operating margin and a more than 12% ROIC which combines to produce an annual €200-300 million free cash flow (FCF) by 2017-2020. In a further sign of confidence, Iberia will recommence its 5 times weekly Madrid-Havana service from 1st June onwards and launch a new 3 times weekly Madrid-Cali-Medallin-Madrid service beginning 3rd July onboard its Airbus A330-300 aircraft.
Looking forward, Iberia will not only focus on further productivity gains and becoming even more efficient, and ride on a broader Spanish economic recovery of which economists forecast the Iberian economy will be the best performing one in the eurozone in 2015 after posting a 1.4% growth in 2014, the fastest since 2007; but also leverage on its strengths to capture surging inbound tourism demand from China and feasibly origin and destination (O&D) demand for onward connecting journey to Latin America with its new Airbus long-haul fleet of 8 A330-200s, -300s and A350-900s each.
Image Courtesy of Pasajeros en tránsito

Leaving no stones unturned
Make no mistake, these progresses do not come easily. If anything, Iberia has left no stones unturned in its restructuring programme, not least 50% of its management team was replaced in the process.
Indeed, one may question if Iberia’s successful turnaround simply owes to the fact that it is further along and at a more advanced stage of cost transformation than its European peers, as fellow legacy carrier Air France has cut 7,500 jobs since 2012 and is eyeing a further cut of 800 cabin crew and ground staff jobs after a pilots strike cost the carrier €330 million in operating profit in 2014 third-quarter. The Franco-Dutch group is now embroiled in a row of using KLM’s €1 billion annual operating profit for group purposes.
Likewise, Lufthansa has reached a preliminary agreement with its cabin crew for a 20% lower cost on 14 A340s and a new collective labour agreement with Swiss International Air Lines’ pilots union IPG since July 2014. Its Austrian subsidiary has also achieved significant progress in settling a dispute with its unions and negotiated a new deal under which the new Austrian’s salary levels will fall below those of Tyrolean Airways’ and the two carriers will be merged and integrated in March this year.
But none of the European majors has fundamentally transformed its cost base as drastic and as thorough as Iberia did. It could even be argued that these seemingly “cost-cutting” schemes are designed to contain cost growth, not slashing cost at all.
At Lufthansa, for instance, its 5-year deal with 300 Eurowings pilots provides a 2.5% wage increase in 2015 and at least 2% in subsequent years and Union Verdi is seeking a 5.5% pay raise for the 55,000 employees it represents across the cabin crew, ground staff and Lufthansa Technik divisions. Further strikes this year such as the 2-day pilot strikes at Germanwings could also threaten to derail the progress at the Score cost-cutting programme, following 10 strikes that cost it €200 million in operating profit last year.
“The bottom line is that these twin trends [rising wages and declining yields] will take us into the dangerous red zone if we do not take action to correct them,” Lufthansa board of directors members Karl Ulrich Garnadt and Bettina Volkens reportedly said.
In constrast, there were 14% and 7% salary cuts for flight crew and ground staff, respectively, at Iberia; caps at pay scale and new entry levels at substantially lower costs with €35,000 annual salary for short-haul pilots and €20,000 for short-haul cabin crew were established. This led to a 19% reduction in short-haul crew cost per block hour over a 2-year period from 2012 to 2014. 3,803 or 70% of the 5,471 earmarked headcount reductions have also been completed by end-2014. By 2016, employee cost per available seat kilometre (ASK) will have fallen by 25% from 2012 level with similar capacity level. The saving will widen to 35% by 2020.
In addition, integration of information technology (IT) systems, significantly reduced use of consulting, and the elimination of conference costs and discretionary expenses will slash non-labour overheads by 25% from 2012 level with the majority of these savings to be realised in 2015.
Progress could be seen through the lens of Iberia’s declining employee cost as a percentage of revenue, which plunged from 30% in 2012 to 24.2% for the first 9 months of 2014, according to Aspire Aviation‘s calculations. British Airways’ figure dropped from 22% to just 20.6% over the same period and the overall International Airlines Group (IAG) from 24% to 21%.
Air France’s figure, on the other hand, remained largely flat at 29.4% for the first 9 months of 2014, from 30% in 2012, whereas Lufthansa Group’s actually increased from 23% to 24.1%. In fact, Lufthansa subsidiary Austrian Airlines has the highest unit cost in Aspire Aviation‘s survey of 8 European carriers at 8.90 euro cents per available seat kilometre (ASK) in the first 9 months of 2014. Lufthansa’s figure of 8.43 euro cents per ASK would have been somewhat, if not considerably, higher had it not incorporated Germanwings’ figure into its own and distorted the picture.
In all, Iberia’s right-sizing has seen its absolute size shrink by 20.7% in terms of capacity between 2008 and 2013, including a 12.81% reduction in 2013 from 2012 levels alone, after its transformation plan was implemented and by 2017 its workforce will have downsized by 25% from the 2012 headcount of 20,600.

Yet “slash and burn” is not a panacea should top-line growth not be achieved or worse still, decline at a faster pace than cost reductions. In this regard, Iberia has virtually revolutionised its revenue management function and the way it sells its airfares in order to maximise the revenue intake.
It adopted the Pros revenue management system (RMS), updated its significant origin and destination (O&D) lists and encouraged the purchase of pricier “structure” fare classes rather than promotional fare classes through increasing the spread or price differentials between fare classes, the latter of which accounted for 74% of Iberia’s total long-haul economy bookings, indicating significant upside potentials that could be realised. It expects a 14 and 11 percentage points increase on the structure fare usage rate on the Madrid-Mexico City and Bogota-Madrid routes in 2014 second-half over the first-half, both to 37% following the adoption of this practice.
It is also forecasting a 27% increase in premium revenues on the Madrid-Mexico City route, 14% on Lima-Madrid, 10% on Madrid-New York John F. Kennedy (JFK) routes in 2014 second-half over the first-half after introducing its new Business Plus lie-flat capsule seats.
Furthermore, Iberia, alongside its sibling British Airways’ hand-baggage only fares, in September 2013 became the first European legacy carriers in rolling out 3 different fare families for short-haul domestic and intra-European flights to better cater for passengers with different price elasticities and travel needs: “Basic” excludes seat selection and the first checked baggage, which are included in the intermediate “Classic” fare bucket, and “Flexible” featuring no rebooking fees, full refund and priority boarding.
Coupled with the sale of exit-row seats and a free middle seat, Iberia saw its seating-related ancillary revenue skyrocket 165% and upgrading 157% from 2013 to 2014. Its new, simpler website also drove an 11% increase in conversion rates over the same period.
Meanwhile, Iberia is said to be launching a premium economy class in 2015 in light of the widening gap between economy and Business Plus fares, Aspire Aviation‘s sources at its parent IAG say. It would be a long-time coming for Iberia since it shelved its first class offerings in October 2004.
These developments have not gone unnoticed: the new Eurowings will similarly have 3 fare products, with “Best”, “Basic” and “Smart”. Its parent Lufthansa will also complete the installation of 7,000 lie-flat new business class and 3,600 premium economy seats by August and this fall, respectively.
Simply put, Iberia has made significant strides in addressing the problem of under-collecting, where revenue efficiency in terms of revenue per available seat kilometre (RASK) will be further enhanced by the introduction of a premium economy class. This offers a wake-up call for Air France/KLM whose under-collecting problem is unbelievably severe – for each ASK being supplied in the first 9 months of 2014, the Franco-Dutch carrier only makes a 0.04 euro cents unit profit, versus 0.10 cents at Iberia, 0.17 cents at Lufthansa, 0.27 cents at British Airways (BA) and 0.61 cents at Swiss, Aspire Aviation estimates.
After all, Air France is not new to the premium economy concept since introducing its product in April 2009, let alone the fact that Iberia was able to remedy this under-collecting issue without it, pointing to a significant problem with Air France/KLM’s pricing strategies.
Image Courtesy of Iberia

From fortress hub to specialised Latin America flying
In its transformation, Iberia suspended unprofitable domestic and European flights, focusing solely on providing feed to its Madrid Barajas Terminal 4 hub, as 66% of its long-haul passengers in 2014 connect from its short-haul flights.
This is reflected in its disproportionate capacity share at Madrid, with a 42% share inclusive of Iberia Express in 2014, compared to a 26% national share in the Spanish domestic market. Even its Iberia Express low-cost subsidiary, with 17 A320s serving 32 destinations, is designed to keep low-cost competition at bay in Madrid, as more than 80% of its passenger flows are point-to-point traffic susceptible to low-cost competition.
This strategy appears to be working well: Ryanair’s capacity share at Madrid is merely 4%, against an 18% share in the Spanish domestic market, where the Irish low-cost behemoth faces a strong contestant in fellow IAG subsidiary Vueling which holds a considerably larger share at 29%. With Iberia Express’s stage length-adjusted cost per available seat kilometre (CASK) at 4.10 euro cents excluding fuel in 2014 first-half, 1.7% below Norwegian Air Shuttle’s 4.17 cents per ASK and 7.8% below easyJet’s 4.42 cents per ASK, this defensive strategy is proving effective in turning Madrid into an Iberia fortress, thus making it hard for other LCCs to penetrate.
This short-haul decentralisation and fortress hub strategy pioneered by British Airways (BA) at London Heathrow is increasingly being emulated in Europe, with Lufthansa completing the decentralisation on all domestic routes originating outside Frankfurt and Munich to Germanwings, including the Munich-Düsseldorf route, on 8th January. Its Eurowings subsidiary will also have an eventual fleet of 23 Airbus A320s and 3 310-seat A330-200s operating out of Cologne serving point-to-point leisure traffic from October 2015 onwards under the SunExpress Deutschland licence with an up to 40% lower unit cost.
But where the likes of Air France/KLM and Lufthansa are leaning on the low-cost platforms as if they are a one-size-fits-all solution, despite the real issue undermining the stranglehold of Lufthansa and Germanwings of the domestic market with a 71% capacity share and only a 16% low-cost capacity share, according to OAG; is rising costs that are fast becoming a concern for Germanwings as well – the International Airlines Group (IAG), and Iberia more specifically, is showing what is paramount in prevailing in an industry growing ever more sophisticated and segmented that demands more than a me-too competitive response.
That is identifying and strengthening one’s unique specialist skill set that other aspiring entrants are difficult to develop. In Iberia’s case, it is striving to become a Latin America specialist with a Spanish-speaking secondary home market, whose Spain to Latin America daily passengers total 11,100, 63.2% more than the next-largest contender France with 6,800 daily passengers, and Italy’s 5,600.
In terms to total bookings, Iberia commanded 1.903 million Europe-Latin America reservations between October 2013 and September 2014 with a 17.6% market share, versus Air France’s 11.5% share with 1.246 million bookings and TAP Portugal’s 11.2% share with 1.213 million bookings.
In capitalising this unique home stretch, Iberia has allocated 53% of its 2014 total system capacity to Latin America, versus 19% to Europe, 13% to the USA and just 11% to the domestic market, the oneworld carrier said. It also has more daily flights to Latin America with 14 than any other carrier and has resumed services to Montevideo on September 1st last year, the aforementioned resumption of Havana flying in addition to a new codeshare partnership with TAM Airlines in Brazil which saw Belo Horizonte, Brasília, Fortaleza, Natal, Salvador, Florianópolis, Curitiba, Manaus, Brasília, Porto Alegre and Recife being added to Iberia’s route map from the same terminal at Sao Paulo that the two oneworld carriers cohabit.
Its codeshare partnership with Mexico’s Interjet, Air Berlin, and 13 new routes to Edinburgh, Manchester, Naples and Hamburg to name just a few would all fit in its modus operandi of routing Europe-Latin America through its fortress Madrid Terminal 4 hub.
Image Courtesy of Iberia

Looking east
Looking into the future, Iberia will look to the Far East in what it acknowledges as a network gap in its vision of converting Madrid T4 as a bi-directional hub with Asia-Latin America traffic growing at a 5.8% compounded annual growth rate (CAGR) between 2013 and 2017, according to the Spanish flag carrier.
Fortunately enough for Iberia, geography is on its side. Madrid has shorter great-circle routings especially for North Asia such as Beijing, Shanghai, Seoul and Tokyo Narita than Middle Eastern hubs, exactly the reason why Air China has been routing the Beijing to Sao Paulo service via Madrid for years with around 63% of all passengers arriving in Brazil stopping at Sao Paulo first, according to the airport operator.
Today’s travellers in North Asia and China can choose between westwards and eastwards origins and destinations (O&D) offerings with Middle Eastern, European and US carriers, and Iberia’s sibling British Airways (BA) flies to Beijing, Shanghai, Tokyo Narita, Seoul and Chengdu in this region. A Shanghai passenger travelling to Sao Paulo, for example, could feasibly fly 11,586 miles with Iberia via Madrid, the shortest such offering against 11,618 miles with BA via London Heathrow, 11,606 miles with Emirates via Dubai and 12,279 miles with United via Chicago O’Hare. With London Heathrow being congested and BA seeking to add further Asian destinations to its network first such as Kuala Lumpur in May 2015, Iberia’s Madrid T4 hub is well placed to handle any spill-over Asia-Latin America O&D demand for the International Airlines Group (IAG) as a whole.
Similar advantages exist for Beijing and Tokyo Narita, with Beijing-Madrid-Sao Paulo’s 10,925 miles length shorter than Beijing-Dubai-Sao Paulo’s 11,230 miles offering; Tokyo Narita-Madrid-Sao Paulo’s 11,899 miles also shorter than Dubai’s 12,559 miles length, although Iberia’s possible Tokyo Narita offering would be some 400 miles longer than transiting through Chicago O’Hare.
However, Iberia needs not rely solely on Asia-Latin America O&D demand to make any potential Chinese routes, such as the Shanghai Pudong route that makes most sense due to its status as China’s financial hub, work. In fact, Spain is gaining popularity with Chinese tourists with its fashion, rich culture, wine luring wealthy Chinese to spend lavishly in the country. According to Global Blue, a global duty-free retailer, a Chinese spends €2,040 on a tour package plus €167 per day on fashion items on average, doubling that of a typical Chinese tourist’s expenditure in Germany. Over 300,000 Chinese tourists are said to have visited Spain in 2014, which is growing at a 20-25% annual rate to reach 1 million by 2020, according to the Chinese Friendly Association of Spain.
While Barcelona accounts for more spending from Chinese tourists and is generally more popular than Madrid, with the Spanish textile industry body Alcotex saying in a 2012 report that Barcelona accounted for 44%, versus Madrid’s 31% of Chinese tourist spending on fashion items, and the Barcelona Air Traffic Intelligence Unit pointing out that Barcelona has a larger share of Asia/Pacific intercontinental traffic at 44.9% against Madrid’s 41.2% in the first 9 months of 2014, it is nonetheless not difficult to see a possible Shanghai Pudong-Madrid route work well combining Asia-Latin America O&D demand and point-to-point traffic to Madrid. Besides, O&D analysis is often supply-driven much akin to a self-fulfilling prophecy and it is technically feasible for Iberia for offer multi-city itineraries with a long-haul flight to Madrid first and then connect onto Vueling or Iberia Express domestic flights after finishing a Madrid visit.
Needless to say, it is a pivotal to grow Iberia’s fleet rather significantly to support this Chinese expansion, since the 8 A350-900s and 8 A330-200s on firm order are planned for replacing 16 A340s in its existing long-haul fleet whilst keeping some A340-600s, most likely the 5 high gross weight (HGW) examples for hot-and-high missions to Mexico City, Quito, Bogota and San Jose.
Yet with IAG holding 18 firm orders plus another 18 on options for the 308-tonne A350-1000, as well as 10 A330 options, IAG could exercise these A350-1000 options or transfer British Airways’ order to where it is needed most to replace the 380-tonne A340-600 HGW at Iberia, which provides more uplift under hot-and-high conditions but is fuel-guzzling, once the 12% return on invested capital (ROIC) hurdle is cleared, instead of having 38% of total seats still being flown by the inefficient A340-600s by 2020 under the current plan.
In conclusion, while critics may claim that Lufthansa is merely making less profit, unlike Iberia’s grave situation a few years ago, it is no excuse to kick the can further down the road. Deep structuring is long overdue at these European legacy carriers and they can ill-afford to wait or otherwise it may very well be ‘too little, too late’. Iberia’s lesson has shown what makes it more than a phoenix rising from the ashes, is that it is no longer sufficient to rely on cost reductions alone, but also finding its specialisation and serving a unique role – Latin America flying in Iberia’s case that enables it to grow on a sustainable and profitable basis going forward.

http://www.aspireaviation.com/2015/02/12/the-quiet-rebirth-of-iberia/
 
Pubblicati finalmente i risultati piu' nel dettaglio della sola BA - utili quasi triplicati:



1 January 2014 – 31 December 2014
All of the information below was contained within the Results Announcement issued by International Consolidated Airlines Group S.A. (‘IAG’) on 27 February 2015.

British Airways Plc (‘BA’ or ‘the Group’) is the UK’s largest international scheduled airline and one of the world’s leading global premium airlines. The Group’s principal place of business is London with significant presence at Heathrow, Gatwick and London City airports. Operating one of the most extensive international scheduled airline networks, together with its joint business agreements, code share and franchise partners, BA flies to more than 400 destinations worldwide. BA’s vision is to be the most admired airline.

Period highlights

  • Revenue up 2.6 per cent to £11,719 million.
  • Operating profit before exceptional items £975 million (2013: £651 million).
  • Operating profit of £975 million (2013: £708 million).
  • Profit before tax from continuing operations £859 million (2013: £300 million).
  • Non fuel unit costs per ASK down 1.1 per cent compared to 2013 on a constant currency basis.

Management review

BA has made an operating profit of £975 million in 2014 (2013: £708 million), which is a significant achievement, building upon the solid foundations set in 2013. Following the arrival of our first Airbus A380s and Boeing 787s in 2013, this year BA introduced further aircraft and now has eight A380s and eight 787s. We have focused on investing in our product where it matters most to our customers, on making journeys more comfortable and enhancing the network we offer, including providing the opportunity to book flights with Vueling and US Airways, which has opened up more than 200 new destinations.

We have continued to use technology to innovate and enhance customer loyalty, including introducing digital membership cards for British Airways Executive Club members, and updating the BA app, allowing customers using Heathrow Terminal 5 and Terminal 3 to receive ‘push notifications’ on smartphones informing them of their gate number, when it is open and when their aircraft is boarding.

Looking ahead, we are introducing new routes to destinations in Spain, Greece, Egypt, Malaysia and elsewhere.

Outlook

Despite generating an operating profit of £975 million in 2014 (2013: £708 million), BA will continue to ensure that it is financially robust and is able to respond quickly to the ever-changing environment of the industry. Management is committed to delivering significant structural change to the cost base. BA continues to take delivery of new generation wide-bodied aircraft and the advanced technology of this new fleet is set to unlock significant fuel savings, whilst also contributing to BA’s continued efforts to minimise its environmental impact.

BA will continue to focus on customer satisfaction and improved operational performance, focusing on investments which matter most to the customer and on the use of technology to improve the customer journey. We have continued to invest in technology, which is a key element to revenue growth. This allows BA to better understand the needs of our customers and better target marketing campaigns where they will have the greatest penetration.

More emphasis will be placed on improving revenue and profit contributions from the short-haul business to ensure it delivers a sustainable return on its own merit. Improvements include seat densification, a new interior, and active management of the short-haul network.

The AJB now incorporates the merged American Airlines and US Airways, adding 27 new transatlantic routes and nine new European destinations to the AJB’s network. Where appropriate, BA will continue to seek to deepen other partnerships through the extension of codeshare relationships and the development of joint businesses and continues to be committed to the future development of the oneworld alliance, which welcomed TAM Airlines in 2014.

Financial review

Revenue for the year was £11,719 million, up 2.6 per cent over the previous year. This included an increase in passenger revenue of £323 million or 3.2 per cent given strong improvements in volumes.

Available capacity (ASKs) increased by 5.9 per cent as a result of the addition of new aircraft which resulted in an increase in passengers carried to 42 million from 40 million in previous years. A strong commercial performance has meant that this additional capacity has mostly been filled with traffic as RPKs have increased by 5.4 per cent although load factor has only marginally decreased by 0.3 percentage points.

Passenger revenue per RPK ended the year 2.1 per cent lower than last year mainly as a result of adverse impact on foreign exchange.

Fuel costs decreased year-on-year by £240 million to £3,515 million compared to £3,755 million in the prior year. The decrease is mainly attributed to a reduction in the average fuel price, net of the impact of hedging, and the favourable impact of foreign exchange offset by the increase in volume.

Group expenditure excluding fuel has increased by £214 million to £7,229 million, or a 3.1 per cent increase. Given that ASKs increased by 5.9 per cent, this represents a 2.7 per cent decrease in non-fuel costs per ASK driven mainly by cost saving initiatives around the business. Part of this decrease is also due to the favourable impact of foreign currency exchange rates, at a constant exchange rate non-fuel costs per ASK decreased by 1.1 per cent compared to the prior year.

Consistent with the increasing revenue trend mainly driven by volume, other operating costs have also increased. Depreciation, amortisation and impairment have increased due to the increase in depreciation from new aircraft deliveries and impact of changes to the depreciation policy on certain fleet. Handling charges, catering and other operating cost have also increased due to increased volume and incremental growth from BA Holidays. These were offset by reductions in engineering and other aircraft costs mainly driven by the cancellation of the long haul freighter service.
In total, non-operating items are an expense of £116 million in the current year (2013: £408 million) a decrease of £292 million. The three principal changes in non-operating income and costs were a favourable share in profit of associates of £39 million (2013: £65 million loss) and the non-recurring impact of the revaluation of the convertible bond liability in 2013 giving rise to a £164 million charge offset by the adverse impact of the fuel derivative losses of £37 million (2013: gain of £17 million).

Profit before tax for the year was £859 million (2013: £300 million).

The tax charge on continuing operations for the year ended 31 December 2014 was £157 million (2013: £16 million). The UK cash tax charge for the year was reduced by the utilisation of the remaining £80 million of Advanced Corporation Tax (ACT) paid on dividends in previous years. The Group profit before tax was £859 million but is stated after a gain of £39 million from the post-tax share of associates for which no corporation tax is reflected in the financial statements. After adjusting for this and movements relating to prior years, the Group’s effective tax rate was 20.8 per cent, compared to the UK corporation tax rate of 21.5 per cent

During the year, the net deferred tax liability has decreased by £222 million to £222 million, primarily as a result of an increase in deferred tax assets related to the pension liabilities, given significant actuarial losses recognised in the year, and the significant mark-to-market losses on hedging instruments driven by the sharp decline in fuel price.

Profit for the year was £702 million (2013: £281 million).

Capital expenditure

Total capital expenditure in the year, amounted to £1,494 million (2013: £1,378 million). This comprised: £1,296 million in fleet-related spend (aircraft, aircraft progress payments, spares, modifications and refurbishments) and £198 million on property, equipment, software, and landing rights.

During the year the Group took delivery of three Airbus A320 aircraft, five Airbus A380 aircraft, two Boeing 777-300 aircraft, four Boeing 787-800 aircraft and one Embraer E190 aircraft.

Liquidity

The Group’s liquidity position remains strong with £2.5 billion of cash, cash equivalents and other interest-bearing deposits (2013: £1.9 billion). Net debt stood at £2.0 billion (2013: £2.0 billion). Refer to Note 8 of the summary consolidated financial statements for further discussion around net debt.

During 2013, the Group obtained an additional source of financing from the issuance of BA’s Enhanced Equipment Trust Certificates (‘EETC’). This was the first time that the Group had used EETC’s and that this form of financing had been used in the UK. A total of $927 million was raised from the issuance which was used to fund the purchase of six Airbus A320-200s, two Boeing 777-300ERs and six Boeing 787-800s. In connection with this issuance, the Group also received an additional $369 million of funding from Japanese Operating Lease structure with Call Option (‘JOLCO’) investors bringing the total finance lease facility available to $1.3 billion. As of 31 December 2014, £nil (2013: $431 million (£264 million)) of the EETC and £nil (2013: $170 million (£104 million)) of the JOLCO facility were undrawn.

In addition, the Group had undrawn long-term committed aircraft financing facilities totalling £1.8 billion (2013: £1.7 billion) and further committed general facilities of £0.6 billion (2013: £0.5 billion).

No dividend will be paid for the year ending 31 December 2014.

Principle risks and uncertainties

During the year BA has continued to maintain and operate its structure and processes to identify, assess and manage risks. The principal risks and uncertainties affecting the Group are further detailed for the year ended 31 December 2014 in the Annual Report and Accounts.

The risks include competition, consolidation and deregulation, government intervention, infrastructure constraints, brand reputation, economic conditions, employee relations, failure of critical suppliers, failure of a critical IT system, pandemic, safety/security incidents, events causing significant network disruption, debt funding, fuel price, pensions and compliance with Competition, Bribery and Corruption law.

Directors’ responsibility statement

The Directors as listed in the Annual Report and Accounts for the year ended 31 December 2014, confirm that, to the best of each person’s knowledge:

  • The Group financial statements in this report, which have been prepared in accordance with IFRS as adopted by the European Union, IFRIC interpretation and those parts of the Companies Act 2006 applicable to companies reporting under IFRS, give a true and fair view of the assets, liabilities, financial position and profit/loss of the Group; and
  • The management report contained in this report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.
 
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