International Airlines Group (IAG), the company formed through the merger of British Airways and Iberia, is to add British Midland (BMI) to the mix, after agreeing in principle to buy the UK-based airline from Deutsche Lufthansa.
The price has not been revealed. The deal, which is subject to due diligence and regulatory clearances, is expected to be completed in the first quarter of next year.
The airline said revenue in the third quarter of 2011 rose 2.2% to €4,490m from €4,392m the year before. Passenger revenue was up 2.9% year-on-year, while cargo revenue was up 0.3%.
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"Our revenue is up 2.2 per cent in the quarter driven primarily by volume. However, high fuel costs continue to have a significant impact on our business. This quarter fuel costs are up 23.7 per cent, compared to last year, while non- fuel costs are flat," revealed IAG's chief executive, Willie Walsh.
Underlying operating profit was down by just over a third to €351m from €528m the year before, while underlying profit before tax fell 34.4% to €316m from €482m last year.
Cash at the end of September stood at €4,152m, down from €4,352m at the end of 2010, but the net debt position improved to €293m from net debt of €895m at the end of last year.
Walsh found room in the report for a traditional gripe about Air Passenger Duty in the UK.
"The competitiveness of the UK economy and the aviation industry has been damaged by Air Passenger Duty with UK airlines facing the highest tax levels in the world. Unless the British chancellor reverses this, even more passengers and businesses will avoid the UK and further undermine the economy," claimed Walsh.
"The main challenge for 2012 will be to offset increased fuel costs, as our hedges unwind, against a background of potentially weaker demand," he added.
in a separate announcement, the group said traffic measured in "Revenue Passenger Kilometres" rose by 1.9% in October versus October 2010, while capacity measured in "Available Seat Kilometres" was up 2.7% year-on-year.
Group premium traffic for the month of October grew by 1.9%compared to the previous year, with 1.8% growth in non-premium traffic.
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