Iberia presented yesterday the results for the first half of the year. In the first six months of 2008 the airline generated consolidated profit after taxes of €20.7 million and profit from operating activities of €6.3 million. The EBITDAR came to 259.3 million euros, 34.2 per cent less than in the same period of 2007.

Revenues from operating activities rose slightly year-on-year, up to €2.67 billion, despite the impact of the sharp depreciation of the dollar.

Total passenger revenue narrowed 1.5 per cent on first half of 2007, mainly due to the slide in the dollar. The drop in passenger revenue was more than offset by the growth in the other items of recurring revenue from operating activities (€35.4 million in total): revenues from cargo and handling rose 3.9 and 2.3 per cent, respectively, and revenue from the maintenance business increased by 17 per cent, mainly driven by the increased number and value of workshop technical assistance services provided to third party airlines.

Fuel, main cost for Iberia, with more than €730 million

In the first half of 2008 costs from operating activities climbed 4.1 per cent, due mainly to the sharp rise in fuel costs (the price for a barrel of Brent crude oil reached €139 at the end of June 2008, rising 89 per cent over the last twelve months). The Iberia Group’s fuel costs reached 732.1 million euros in the first six months of 2008, some 27.1 per cent of its recurring operating costs and 30.4 per cent of total costs at the transport business; this means an increase in fuel costs of 37.5 per cent year-on-year.

Excluding fuel, the other headings making up costs from operating activities declined by 4.5 per cent on aggregate on first half of 2007. Unit operating expenses narrowed 6.2 per cent.

In this period, recurring personnel expenses narrowed 1.4 per cent, thanks to the reduction of the total workforce by 3.8 per cent and the 5.8 per cent increase of productivity measured as ASK (available seat kilometre) per employee.

Long haul increases its importance

In the first half of 2008, Iberia’s review and optimisation of the flight programme was practically completed. Accordingly, ASKs (available seat kilometres) rose 1.7 per cent year-on-year. The number of RPKs (revenue passenger-kilometres) climbed 1.0 per cent, while the load factor was 79.6 per cent.

Long haul RPKs, which accounted for 63.1 per cent of total traffic, increased by 3.9%, compared to growth of 5.9 per cent in capacity, to leave the load factor at 85.3 per cent. Despite the slowdown in business class travel across the entire industry, the number of paying passengers on Iberia’s Business Plus service rose 4.1 per cent year-on-year.

The load factor on the international medium haul segment rose to 1.2 points to 71.5 per cent. RPKs climbed 6.3 per cent, underpinned by a 4.5 per cent increase in capacity, in part due to the inauguration of new routes (Dubrovnik since the beginning of June 2008, Prague and Warsaw in October 2007) and higher frequencies on Central and Eastern European routes.

As planned in the 2006-08 Director Plan, capacity in the domestic sector declined 15.1 per cent on the first half of 2007. Following the inauguration of the high speed train between Barcelona and Madrid, from April Iberia cut capacity on this route by 20.3 per cent without modifying flight frequency.