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In the third quarter, Iberia achieved a net profit of 74 million euros and operating earnings of 77 million euros, representing gains from 2009 of 90 million and 133 million euros, respectively. In cumulative January-September terms Iberia showed a 53 million euro profit, up by 235 million euros from the same period a year ago.
The EBITDAR generated in the first nine months of the year came to 369 million euros, an improvement of 299 million on 2009, and the operating margin expanded by 9.9 points both for the year to date and for the third quarter, when it reached 5.3 per cent.
Revenues rise across the board
In the first nine months, operating income rose by 7 per cent to 3,567 million euros. This improvement more than doubled in third quarter, when operating income amounted to 1,341 million euros, 14.9 per cent more than those posted in the same quarter of 2009.
Iberia’s third quarter income rose across the board: passenger revenue grew by 13.5 per cent, thanks especially to the good performance of the long-haul segment; freight income was up by 34.5 per cent on both higher rates and 16.9 per cent traffic volume growth; income from the aircraft maintenance business surged but 33.7 per cent, due chiefly to engine inspections and other services in workshops; and revenue from airport handling services edged up by 2.1 per cent in the quarter.
In overall terms, unit income per ASK rose by 8.6 per cent with respect to the third quarter of 2009, thanks to the improved load factor and the 4.3 per cent growth in average earnings per RPK, which was due to the increase in the number of Business Plus (long haul) passengers.
Expenses decline in first three quarters
In the year through September Iberia’s operating expenses eased by 2.6 per cent from 2009, reaching 3,568 million euros. This was due mainly to the 10.4 per cent drop in spending on fuel, cost containment measures and a reduction of capacity. Unit operating costs fell by 1 per cent in the same period.
Meanwhile the headcount at the end of September was 3.6 per cent below last year’s average, and payroll costs were down by 0.7 per cent.
In the same period, the cost of leasing aircraft was 10.4 per cent below the amount recorded in the same period of 2009, while the fleet utilisation rate climbed by 2.5 per cent, to 10.6 hours per aircraft/day.
The recovery of passenger revenues was reflected in higher sales costs in the form of agency commissions and incentives. In the third quarter these costs were 21.8 per cent higher than in the same quarter a year ago and in the January-September period they were up by 20.5 per cent to 128 million euros.
Overall load factor near 86 per cent
In the third quarter Iberia increased its seat-kilometre capacity overall by 3.4 per cent and demand rose by 7.7 per cent in the quarter. This yielded a passenger load factor of 85.6 per cent, 3.4 points above the figure posted in the same quarter of 2009.
In the long-haul segment the Spanish airline raised its capacity by 9.5 per cent and watched demand grow by 15 per cent in the quarter, for a load factor in higher than 88 per cent.
Air freight also performed well in the first three quarters. Expressed in tonnes/kilometres, it increased by 32.4 per cent, reaching 920 million tons, for a freight load factor of 66.4 per cent, an improvement by 11.8 points from the same period of 2009.
Sound financial position
Iberia’s equity position swelled by 31.2 per cent to reach 2,034 million euros in the first nine months of 2010, thanks mainly to the sale of the airline’s stake in the travel reservations processor Amadeus. Adjusted net debt was down 8 per cent thanks to smaller expenditures on aircraft leasing.
Theodore is the Co-Founder and Managing Editor of TravelDailyNews Media Network; his responsibilities include business development and planning for TravelDailyNews long-term opportunities.
