The British Airways owner – AIG- has recorded an increase in its profits despite the pound low value hitting it hard last year.
The firms’ profits before taxation rose by close to a third in 2016 to record a massive 2.4bn Euros profit. The operating profits were also up – 2.5bn Euros.
But the Pound fall still had an impact on the business, with AIG reporting that it lost 460m euros from the decline, reports Reuters.
The Brexit referendum during last June is largely attributed to have caused the pound to decline.
But the group still did well despite a backdrop of increased terrorist activities, economic uncertainty and heightened competition within the European market.
“It was a good performance in a challenging environment,” said IAG’s chief executive, Willie Walsh.
He also explained that AIG continues to record improving performance.
IAG announced that it carried over 100 million passengers in 2016. “This is double the number British Airways and Iberia carried in 2010, a year before IAG was created,” reported the chief executive.
IAG is still optimistic that 2017 will be yet another successful year, courtesy of the current fuel prices and the favorable exchange rates.
The group’s good performance has continuously been supported by a number of factors such as cost-cutting and restructuring at a time when the sharp fall in fuel prices from 2014 has been turned to its advantage. In 2016, IAG spent 20% less on fuel as compared to the past years.
However, competition is little by little building with the emergence of budget operators such as Norwegian Air Shuttle. To reduce overreliance on the lucrative long-haul market, the Scandinavian carrier has plans to expand its trans-Atlantic flights using Boeing 737 Max single-aisle planes from this summer to serve smaller US cities.
Barcelona has been targeted as the starting point in June, in which two discount long-haul planes – Airbus SE A330 – will be used.