LONDON: International Airlines Group, parent of British Airways, posted yesterday an annual net loss of 943 million euros on the back of troubles at its Spanish arm Iberia and a soaring fuel bill.
The loss after tax, equivalent to $1.24 billion, compared with a net profit of 562 million euros in 2011, IAG said in a results statement, adding that it had been hit hard by impairment and restructuring charges at Iberia.
Revenues grew 10.9 percent to 18.12 billion euros but the fuel bill rocketed by 20.4 percent to 6.10 billion euros.
Before exceptional items, British Airways made an annual operating profit of 347 million euros — but Iberia suffered an operating loss of 351 million euros.
“2012 has been a year of transformation for IAG — we bought bmi and integrated it into British Airways and initiated our restructuring of Iberia,” said IAG Chief Executive Willie Walsh.
“However there was a significant impact on the results from exceptional and non-operating items... These items include provision for restructuring and impairment costs in Iberia.”
IAG had earlier this month revealed that it would axe more than 3,800 jobs at Iberia — about 700 fewer than planned. The division has struggled as a result of Spain’s weak economic backdrop.
“We have embarked on a significant transformation program in Iberia — and these results emphasize further that the airline must adapt to survive,” Walsh said yesterday.
“It must stem its cash losses and adjust its cost base permanently if it is to compete with other airlines in all its strategic markets and lay the foundations for profitable growth in the future.
“Despite three months of negotiations between Iberia and its trade unions, no agreement was reached on an initial restructuring plan. Therefore, we have announced that Iberia will proceed with a 15-percent cut in capacity and has started the formal collective redundancy process which will affect 3,807 jobs.”
IAG had already warned last last year that more cuts could follow at Spain’s Iberia against the backdrop of economic crisis in the euro zone country.
Spain’s economy is in deep recession as an austerity program chokes consumer spending amid unemployment that surged to more than 26 percent of the work force in the fourth quarter of 2012.
And the euro zone’s fourth-largest economy is hovering on the edge of a sovereign bailout, after already securing a euro zone rescue loan of up to 100 billion euros for its banks.
“IAG’s performance for 2012 was set against a sharp year-over-year rise in the effective price of fuel ... and the deteriorating economic environment in the euro zone and particularly Spain,” the airlines group added yesterday.
It last year completed a takeover of Lufthansa’s loss-making unit bmi in a deal worth 172.5 million pounds.
In addition, IAG in 2012 launched an offer for full control of Vueling Airlines — which is already almost half owned by Iberia — for 113 million euros.
BA and Iberia merged in January 2011 in a tie-up aimed at slashing one another’s costs, as a sharp economic downturn and rise of low-cost competitors sparked steep losses for traditional carriers.
IAG suffers $ 1.24 billion loss on Iberia woes
IAG suffers $ 1.24 billion loss on Iberia woes
Amazon to invest $12bn in data centers to expand AI, cloud capacity
RIYADH: US technology giant Amazon plans to invest $12 billion to build multiple data center campuses in northwest Louisiana, expanding infrastructure to support artificial intelligence and cloud computing.
The development, spanning Caddo and Bossier Parishes, will support Amazon Web Services’ cloud computing operations and growing demand for AI infrastructure, according to a company statement.
The announcement comes as the global data center sector is projected to expand at a 14 percent compound annual growth rate through 2030, according to JLL’s Data Center Outlook report, adding nearly 100 gigawatts of new capacity worldwide between 2026 and 2030 and effectively doubling current global capacity.
David Zapolsky, Amazon’s chief global affairs and legal officer, said the project would build next-generation data center campuses to support artificial intelligence and cloud computing while creating opportunities for local communities.
“We’re creating hundreds of high-paying jobs and making substantial investments in local infrastructure to serve customers. We’re grateful for our strong partnerships with local leaders and proud to deepen our commitment to Louisiana,” he added.
The campuses are expected to create 540 direct jobs, including network specialists, operations managers and engineers, along with an estimated 1,710 indirect roles across the regional economy. Construction activity could support up to 1,500 temporary jobs, the company said.
Amazon is partnering with STACK Infrastructure on the project, and the company said it will self-fund the energy infrastructure required for the project, working with Southwestern Electric Power Co. to cover the full cost of grid upgrades and new power facilities.
Sustainability features are built into the design, with the company saying the data centers will use verified surplus water for cooling during peak summer periods and outside air cooling for about 87 percent of the year, helping reduce electricity demand by 25 percent to 35 percent during peak grid loads.
The announcement comes after Pamela MacDougall, Amazon Web Services’ head of energy markets and regulation in Europe, Middle East, and Africa, told Reuters long delays to get power grid connections are challenging the company’s plans to expand data centers in Europe.
Speaking earlier in February, MacDougall said connecting to the transmission network in Europe can take up to seven years - versus the roughly two years it can take to develop a data center, she said.
In the US connection queues average one to three years, according to the International Energy Agency, although they can sometimes also stretch to seven years.
"And we're finding more and more across Europe that certainty of the delivery date has continued to be delayed," she said in an interview.
