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British Airways, Iberia group IAG sees profit boosted by cheaper fuel


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British Airways, Iberia group IAG sees profit boosted by cheaper fuel

Lower oil prices helped IAG to a 65 percent increase in pre-tax profits last year.

The owner of British Airways, Iberia, Aer Lingus and Vueling is also forecasting solid growth this year, though at a slower pace of around 40 percent.

Chief Executive Willie Walsh said the group will benefit from a long-term strategy of reducing costs and growing demand for travel as well as cheaper aviation fuel with oil prices having almost halved over the past 12 months.

However, recent falls in the pound on uncertainty about the outcome of a referendum on Britain’s EU membership are also a risk to IAG because its major expenditure is on fuel, priced in dollars.

It also faces pressure on ticket prices from increased competition in Europe and on transatlantic routes.

Walsh said IAG was well positioned to grow in spite of those headwinds: “Clearly it will a challenging environment but the good news is that we’re very confident in terms of our performance.”

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