Business

BA parent firm IAG monitoring fuel price

IAG launch
Image caption Shares in IAG have fallen since they started trading last month

International Consolidated Airlines Group (IAG) has said it is monitoring closely the impact of political unrest in the Middle East on fuel prices.

Reports suggest chief executive Willie Walsh warned that fuel surcharges, and therefore ticket prices, could rise if the unrest continues.

The group, created by the merger of British Airways and Iberia, posted pre-tax profits of 21m euros ($29m; £18m) for the final three months of 2010.

Revenue rose by 13.4% to 3.8bn euros.

Mr Walsh told the Reuters news agency: "We will adjust the [fuel] surcharge if we believe that is necessary".

"Given the increasing volatility in the fuel price in the last few weeks, if that volatility continues, I think it's likely that increases will be seen in the market."

Political unrest

The airline said it made a profit came despite freezing UK weather and a Spanish air traffic controllers' strike.

The result compares with a 208m euro loss in the same period a year earlier.

Profits, it said, were also affected by merger costs and charges associated with scrapping two Boeing 747 aircraft. Fuel costs, it added, rose by 5.2% to 989m euros.

Shares in IAG began trading last month and the group has said it expects to save 400m euros a year by 2016.

"We are confident that we are on track to deliver our synergy targets," said chairman Antonio Vasquez.

The pre-tax profits for BA alone were £157m for the nine months to 31 December, with the carrier saying it had made "significant progress" despite the Icelandic volcanic eruption in April, severe winter weather and industrial action by cabin crew.

A fresh ballot on further strike action will take place next month.

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