International Airline Group—parent company of British Airways, Iberia, Aer Lingus, Vueling and Level—reported strong half-year profits Aug. 3, despite the dual headwinds of rising fuel prices and continuing strikes by French air traffic controllers.

The group posted net profits, before exceptional items, of €835 million ($968 million), up 24% on 2017’s restated figure of €669 million (before exceptionals) for the equivalent period.

Beneficial exceptional items to the tune of €573 million added to the latest figures, taking IAG’s total post-tax profits to just over €1.4 billion.

In guidance for the year, IAG expects that, at current fuel prices and exchange rates, its operating profit for 2018 will show an increase year-on-year. Both passenger unit revenue and non-fuel unit costs are expected to improve at constant currency.

Revenue for the six months was up 3.1% at €11.2 billion. Costs, after a €620 beneficial exceptional item, came in at €9.47 billion, compared to a restated equivalent figure of a fraction under €10 billion last time.

Capacity, measured in ASKs, grew 5% to 154 billion, while RPKs were 6.9% ahead at 127 billion. This equated to a load factor of 82.4%, up from 80.9% for the year-ago period.

On the operating profit front, and breaking this down by individual airline, British Airways made a profit of €868 million before exceptional items (2017 restated: €740 million); Iberia made a profit of €102 million (2017 restated: €87 million); Aer Lingus made a profit of €104 million (2017 restated: €53 million) and Vueling’s loss was €11 million (2017 restated: loss €7 million).

Vueling was tipped into the red by a €20 million cost incurred as the result of French ATC strikes, a point made by IAG CEO Willie Walsh in his comments on the latest (2Q) period.

“We’re reporting another good set of results in 2Q. There was a strong performance in both unit revenue and costs. At constant currency, our passenger unit revenue increased by 2.3% while non-fuel unit costs went down 2%.

“Unfortunately, French air traffic control strikes continued to challenge our airlines’ operations, causing disruption to our customers. Vueling was particularly affected and incurred an additional €20 million of disruption costs in the quarter. These strikes are also having a significant negative impact on the Spanish economy and tourism.”

In comments about the group’s long-haul, low-cost carrier, he added: “In July, Level started flights from Paris Orly to Montreal and Guadeloupe. We are committed to accelerating Level’s growth and its fleet will increase to a total of seven Airbus A330-200 aircraft in Paris and Barcelona next year. Also, we launched Level short-haul operations from Vienna where it will have four A321 aircraft that will operate to 14 European destinations.”

The group reported that fuel prices rose “significantly” (9%) in the six-month period, partially offset by a weaker US dollar against both the euro and sterling. The euro weakened against sterling during the period, although to a lesser extent. Exchange rates were net negative for the group.

“From a transactional perspective, the group’s financial performance is impacted by fluctuations in exchange rates, primarily from the US dollar, euro and pound sterling,” it said. “The group generates a surplus in most currencies in which it does business, except for the US dollar, as capital expenditure, debt repayments and fuel purchases typically create a deficit.”

Alan Dron