Airbus, IAG results soar

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Airbus shrugs off concerns about the health of the jet market as it reports better than expected quarterly results and says it’ll ramp up production of its most popular jet. British Airways owner IAG also saw its third quarter results beat expectations. Tim Graham looks at how falling unemployment and low oil prices are helping airlines.

Airbus, IAG results soar

Growing concerns about the jetliner market don’t seem to be cramping the style of two of the biggest players.

Airbus has reported solid earnings, posting a 12 percent increase in third-quarter operating profit, to 921 million euros.

British Airways’ owner IAG also reported better than expected third-quarter figures.

Its operating profit hit 1.2 billion euros,

thanks to strong demand for summer travel and cheaper fuel.

JP Morgan’s Michael Bell.

(SOUNDBITE) (English) JP MORGAN GLOBAL MARKET STRATEGIST, MICHAEL BELL, SAYING:

“As unemployment’s falling, and you’re seeing an improvement in the economies, that means that there’s potential for further bookings, stronger consumer strength. And the other point that’s quite obvious is the fall in the oil price.”

Aside from British Airways, IAG’s portfolio includes Aer Lingus, Iberia and Vueling.

Analysts say 2016 could be a bumper year for the company as long-term fuel deals expire,

allowing it to benefit fully from an oil price that has more than halved since June last year.

(SOUNDBITE) (English) JP MORGAN GLOBAL MARKET STRATEGIST, MICHAEL BELL, SAYING:

“The oil price obviously fell quite some time ago, but because of the hedging policies in place at the airlines it means that the full benefits from that haven’t fed through yet into company earnings. As you go forward from now you start to see the full benefit of that fall in the oil price.”

Airbus has also announced plans to boost production of its most popular jet.

By 2019, the manufacturer wants to turn out 60 of its A320 aeroplanes every month.

That’s in addition to a hefty new order agreed between Germany and China,

for Airbus to manufacture 130 jets, in a deal worth 17 billion dollars.

Tags : Soar, Results, airbus

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