 Iberia is planning to launch a low-cost carrier |
Profits at Spanish airline Iberia have dropped by more than a fifth after the carrier was hit by higher fuel costs. Spain's biggest airline by sales and passengers numbers said profit in the second quarter was 35.7m euros ($45.6m; �24.4m), down 21% on a year ago.
The airline, under pressure from budget airlines, has also been hit by strikes this year in protest at its plans to launch a low-cost carrier.
Iberia staff brought El Prat airport in Barcelona to a halt at the end of July.
New routes
The airline said fuel costs increased by 62% to 303m euros, after saying earlier this year it expected fuel costs to rise by only 20%-23% in 2006.
Competition on domestic and European routes has also forced Iberia to cut short and medium-haul flights in favour of long-haul flights, many of them to South America.
However, second-quarter earnings before interest, tax, aircraft rentals, and other costs - Iberia's preferred measure of profitability - rose 12% to 218.3m euros.
Sales also increased 19% in the second quarter, with Iberia reporting strong demand, as well as a good performance in newly-introduced services.
"We expect this new trend to consolidate in the coming months," it said in a statement.
One-Minute World News 
News services
E-mail this to a friend 
Printable version 
