Play all audios:
The British flagcarrier and its new Spanish partner Iberia, together called the International Airlines Group (IAG), are due to report their maiden results as a joint company this week. The
results will include BA’s third-quarter and Iberia’s full-year results. BA’s estimated £1.9 billion fuel bill for the nine months compares with £1.81 million for the same period the year
before. The total bill for the 2009 to 2010 financial year was £2.37 billion. Over the past year, the price of crude oil has been rising, breaking through the crucial $100 (£62) a barrel
threshold. On Friday, Brent crude stood at $104 a barrel, due in part to Middle East unrest. Jet fuel costs are expected to remain a pressure on the newly merged group this year. Rivals such
as easyJet have already warned on fuel costs. In the past, BA has used fuel surcharges on tickets and hedging measures to recover the majority of the rise in spot jet fuel. However,
analysts at Citi said: “It is possible that IAG could warn on the outlook due to weak revenue yields/load factors in the first quarter of 2011 and rising fuel prices. “Rises above $100 a
barrel could be especially challenging [in the current economic environment].” Analysts at Investec said that the recent increase in jet fuel prices had already offset the synergy gains from
the merger with Iberia. Iberia’s fuel bill for the whole of 2010 is estimated at E1.08 billion, the Spanish flagcarrier is expected to say this week. BA is expected to report an operating
profit of £179 billion for its third quarter despite a £50 million bill for December’s snowfall when Heathrow ground to a halt and hundreds of flights were cancelled. Analysts said the
figures would be “substantial improvements” on the previous year. In the three months to the end of December 2009, BA made just £25 million. IAG, headed by former BA chief executive Willie
Walsh, is expected to have made an operating profit of E185 million (£155 million) for the quarter. BA has pulled out of a nosedive due to a sector-wide recovery in passenger and cargo
traffic. This week’s profits haul comes after the airline lost nearly £1 billion over two years. BA and Iberia are looking at a list of 12 unnamed airlines they would like to buy or merge
with. Speculation on their intended targets has focused on other oneworld members including Australia’s Qantas, Hong Kong’s Cathay Pacific, JAL in Japan and Finnair.