British Airways owner sees profits hit by soaring jet fuel costs

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The owner of British Airways has revealed a sharp drop in quarterly earnings on surging fuel prices due to the Iran war and warned its annual fuel bill is set to jump to nearly nine billion euro (£7.4 million).

International Airlines Group (IAG) said pre-tax profits fell 12.9% to 1.63 billion euro (£1.33 billion) in the three months to September 30, while operating profits slumped 15.9% to 1.73 billion euro (£1.42 billion).

It said a 4.5% rise in revenues was not enough to offset a 30.4% jump in jet fuel costs, as well as disruption caused by Air Traffic Control outages.

An incident at National Air Traffic Services (Nats) on September 8 led to the cancellation of more than 2,000 flights and impacted hundreds of thousands of passengers.

IAG said its total fuel costs are expected to soar to 8.9 billion euro (£7.28 billion) for the financial year, even with actions to fix prices in advance.

It said ongoing efforts to drive savings were helping limit the impact of disruption and non-fuel costs.

Luis Gallego, IAG chief executive, said: “As a result of the actions we are taking the outlook for the rest of the year, as well as the start of next year, is positive.”