IAG first quarter operating loss doubles on shabby Iberia performance and pilot strikes

International Airlines Group (IAG) has joined the ranks of its full service peers, Lufthansa Group and Air France-KLM Group, in reporting a deepening of its first quarter operating loss with higher fuel costs nullifying the rise in passenger traffic growth and unit revenues. IAG's deteriorating results, however, also depict a two-tier performance within the Group giving little reason to rejoice the one-year old merger with an "ole".

Iberia contributed to the bulk of the operating loss whereas it accounts for approximately a third of the group capacity (in terms of ASKs) and group revenue. This highlights the urgent need to proceed with the restructuring of Iberia and resolve the dispute with its pilots. The 10 days Iberia's pilots were on strike in 1Q2012 cost EUR25 million, according to IAG.

IAG's Spanish unit incurred a EUR170 million loss from operating activities in the first three months of 2012, compared to a EUR100 million loss in the year-ago period. British Airways (BA) posted an operating loss before exceptional items of GBP62 million (EUR77 million) in 1Q2012.