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Last Updated: Tuesday, 14 November 2006, 16:11 GMT
Fuel burden knocks Iberia profits
Iberia plane
The summer strike cost Iberia about 15m euros
Higher fuel costs and industrial action by pilots this summer have depressed profits at Spanish airline Iberia.

Iberia's earnings fell 80% to 75m euros ($96m; 50m) in the three months to the end of September as high global oil prices pushed up fuel costs by 26%.

Pilots at the Spanish flag carrier went on strike in July in protest at its plans to launch a low cost airline.

But Iberia said it had made good progress in refocusing its business on the long-haul market.

Home and away

In October, passenger numbers on long-haul flights - dominated by services to the Americas - rose by 10.5%.

But a reduction in domestic services hit traffic in Spain, with passenger numbers falling 9.2%.

Iberia said profit comparisons with last year were misleading since third-quarter figures in 2005 were boosted by one-off gains from the sale of its ticket reservation system Amadeus.

At operating level, profits for the latest period rose 8% to 87.7m euros.

Fuel expenditure accounts for a fifth of Iberia's costs, despite it limiting its exposure to price rises by hedging the cost of the fuel it buys.

Fuel pressures and competition from budget airlines are making life extremely tough for many of Europe's long-established airlines.

Italy's Alitalia reported a 65m euros loss in the third quarter.


SEE ALSO
Iberia hit by rising fuel costs
02 Aug 06 |  Business
Iberia pilots end strike action
12 Jul 06 |  Business
Job strike grounds Iberia flights
10 Jul 06 |  Business

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