Despite its Iberia restructuring continuing apace and British Airways' efficiencies adding to the bottom line, International Consolidated Airlines (IAG) fails to woo investors as the share price falls 4.5% to 386.3p.
First quarter operating losses have narrowed to €150 million from €278 million a year earlier but it doesn't appear enough to convince the market that the airline is greatly improving in health.
One possible reasons is that Barcelona-based budget carrier Vueling - bought by IAG in April 2013 - has posted an operating loss of €30 million. The figure was similar to the previous year's showing even if this had not been included in 2013 results, as it preceded full ownership by IAG. Management maintains that Vueling's first quarter loss in 2014 is a result of the group undergoing significant expansion with its main focus in southern Europe.
Chief executive Willie Walsh reckons IAG will improve operating profit for the full year by at least €500 million versus 2013's €770 million. The market consensus is circa €1.3 billion operating profit. The airline is targeting €1.8 billion operating profit in 2015.
Iberia has almost halved its losses from quarter one last year with an operating loss of €111 million compared to €202 million. This doesn't take into account the impact of recent pay and productivity agreements which took effect in April.
British Airways was even more successful, narrowing operating loss to €5 million from €72 million in the same period a year earlier. This has been achieved by increasing capacity within a controlled cost environment and the flag carrier has clearly benefitted from the efficiency of its new Airbus A380 and Boeing 787 aircraft.