IAG profits soar above £2bn despite sterling collapse

IAG chief Willie Walsh
IAG chief Willie Walsh

BA owner IAG owner of British Airways has taken a 460 million euro (£389 million) Brexit hit following the collapse in the value of the pound, but still managed to report rising profits last year.

International Airlines Group (IAG) said weaker sterling saw operating profit suffer after revenue slid 1.3% to 22.57 billion euros (£19.1 billion) in the year to December 2016, with Brexit also affecting demand at British Airways.

Boss Willie Walsh said: “Our performance was affected by an adverse currency impact of 460 million euros. In particular, this was due to the weak pound following the UK’s EU referendum.”

Sterling has fallen 16% versus the US dollar since the referendum and 10% against the euro.

IAG issued a profit warning after the referendum on June 23, and in October warned that ticket prices may have to rise as a result of sterling’s slump.

But the group, which also owns the Aer Lingus and Iberia airlines, said overall operating profit rose 7.2% to 2.48 billion euros (£2.1 billion) in the year.

In 2016, the firm carried more than 100 million passengers - double the number British Airways and Iberia carried in 2010, when IAG was formed.

Mr Walsh added: “We’ve made good progress and continue to build on all we’ve achieved in our first five years.”