Iberia Airlines has published negative results for the first quarter of 2008. In fact, Iberia has announced losses of 400,000 euros for this period compared to a profit of 12.2 million euros for the same period last year.
This situation has been caused by the drop in the number of passengers and a negative operating result valued at more than 28 million euros as well as the rise in petrol prices which have seen costs rise by 25.6% with 327.4 million euros spent on fuel costs.
During the first three months of 2007 Iberia spent 260 million euros on fuel which is just 1.2% more than for 2006. However, the cost of fuel for the first quarter of 2008 now represents 24.6% of the total operating costs for Iberia. The price of Brent oil on the stock market has gone above 100 dollars a barrel and its average cost has been 65% more than for the same period last year. Fortunately for Iberia the fall in the value of the dollar has compensated for approximately a third of the impact of this hike in oil prices.
With a view to the future, Iberia has presented an offer for its rival Spanair in order to try and compete against other low cost airlines in Spain as well as the AVE which has taken customers away for one of Iberia’s most profitable routes between Madrid and Barcelona. In addition to this it is promoting the fusion of Clickair with Spanish low cost airline Vueling in another attempt to reduce competition.
In April Iberia announced a 3 point drop to 78.4% of occupied seats partly due to the early Easter break this year. The biggest drop was in long haul flights with a drop of 1.9 points from an occupation of 87.9% to 86% followed by domestic flights which have dropped 1.1 points from 71.1% to 70% occupation.
Iberia also announced that its offer of average seats per kilometre has gone up by 1.1% while the demand from passengers per kilometre transported has gone down by 2.
Fernando Conte, the president of Iberia, warned earlier this week that Iberia was not immune to the world economic situation in which the US economy is experiencing a serious slump.