International Consolidated Airlines’ (LON:IAG) share price has surged in London this morning as the British Airways and Iberia parent posted a rise in second-quarter profit. Today’s update comes after IAG recently disclosed that it had been notified by the Information Commissioner’s Office that it intends to issue the airline with a penalty notice over the theft of customer data from British Airways’ website last year.
As of 10:04 BST, IAG’s share price had added 2.44 percent to 423.60p, significantly outperforming the broader market selloff with the benchmark FTSE 100 index standing more than two percent lower. The group’s shares have given up more than 38 percent of their value over the past year, as compared with about a 1.7-percent fall in the Footsie.
IAG posts quarterly update
IAG announced in a statement today that it had made operating profit of €960 million in the second quarter of the year, up from €900 million a year ago. Passenger unit revenue for the quarter was up 3.1 percent. Fuel unit costs for the quarter, however, rose 12.4 percent, while non-fuel unit costs climbed 1.6 percent.
“Despite fuel cost headwinds, we delivered a good performance,” IAG’s chief executive officer Willie Walsh commented in the statement. “This highlights, once again, that our unique structure and diverse brand portfolio underpins our financial resilience and ability to deliver robust results.”
Analysts weigh in on results
The Financial Times quoted analysts at Bernstein as commenting that IAG’s beating expectations and bullish outlook for the rest of the year on unit revenues was ‘surprisingly encouraging’ given the industry’s backdrop. The newspaper further quoted Gerald Khoo, analyst at Liberum, as adding that the encouraging performance for the second quarter with modest profit growth was “a rare occurrence in the European airline industry at present”.
According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating, while the average target on the IAG share price stands at 649.46p.