IAG airline group soars into profit in first half

International Airlines Group, formed from the merger of British Airways and Spanish carrier Iberia, said Friday that it bounced back into first-half net profit, aided by premium demand and despite soaring fuel costs. Earnings after taxation hit 88 million euros (£77.2 mln) in the six months to the end of June. That contrasted with a net loss of 352 million euros (£308.8 mln) in the same part of last year, IAG said in a results statement. IAG, created only in Janaury, also reported a pre-tax profit of 39 million euros, after a 419-million-euro loss last time around. And revenues rallied 17.9 percent to 7.773 billion euros. However, the group also admitted that fuel costs surged 34.8 percent to 2.439 billion euros in the reporting period, as oil prices jumped. Jet fuel, or kerosene, is refined from crude oil. Chief Executive Willie Walsh added that the group was on track to deliver "significant" profit growth and synergies this year, and noted that there had been "continued strength" in the market for premium air travel. "We expect significant growth in operating profit this year, with improvements in both our unit revenue and unit cost performance versus 2010 and are on track to reach our synergy targets," Walsh said in the earnings release. British Airways and Iberia sought to merge in order to slash their costs, as the global economic downturn and the rise of low-cost airlines resulted in steep losses for traditional carriers.