British Airways owner issues profit warning over soaring jet fuel costs
Summary
The parent company of British Airways, International Airlines Group (IAG), warned that higher jet fuel costs due to the Iran war will reduce its profits this year. Fuel expenses are expected to rise by about €2 billion, and while IAG plans to manage some of these costs through increased revenue and cost controls, the situation may lead to fewer flights and potential fuel shortages.Key Facts
- IAG expects to spend about €9 billion on fuel this year, up from earlier estimates of €7.1 billion.
- The company has hedged 70% of its fuel needs to protect against price changes.
- Higher fuel prices, rising from $72 to over $100 per barrel, are linked to the Iran war.
- IAG forecasts lower profits this year due to increased fuel costs.
- Around 2 million airline seats worldwide have been cut because of soaring jet fuel prices.
- London Heathrow saw only a small net reduction of 111 flights despite global cuts.
- The UK is highly vulnerable to jet fuel shortages due to high import needs and low reserves.
- IAG reported a 77% increase in pre-tax profits to €422 million for the first quarter of the year.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.