British Airways-owner IAG (ICAG.L) posted a 75 percent jump in quarterly profit, boosted by favorable currency movements, in an earnings statement that made no reference to the group’s potential takeover of low-cost competitor Norwegian (NWC.OL).IAG, which also owns the Iberia, Aer Lingus and Vueling airlines, acquired a 4.6 percent stake in struggling Norwegian in April with a view to starting takeover discussions.
The group said the 75 percent rise in quarterly profit was helped by a 58 million euro net foreign exchange benefit, plus an improving passenger unit revenue trend and after its costs excluding fuel fell.
In the first three months of the 2018, operating profit before exceptional items came in at 280 million euros ($335 million), beating an analyst consensus forecast of 206 million euros.
The consensus forecast was derived from a range of between 70 million euros and 310 million euros according to an analyst note, with the spread reflecting uncertainty over currency and fuel impacts.
IAG’s move for Norwegian came after Norwegian had to issue new shares in March to try to shore up its balance sheet and help it weather higher costs and deepening losses as it gambles on a huge expansion of its low-cost long-haul business.
IAG was built up by M&A but over the last year its rival Lufthansa has been at the forefront of consolidation in Europe, snapping up Brussels Airlines and parts of insolvent Air Berlin to gain exposure to the competitive low-cost market.