British Airways owner plots low-cost expansion as it hits record first quarter profit

the boss of British Airways and Iberia owner IAG Willie Walsh has said he is already plotting the expansion of his company’s low-cost long-haul airline Level just two months after it launched.

The Barcelona-based airline was unveiled in March and will begin with flights to Los Angeles, San Francisco, Buenos Aires and Punta Cana in the Dominican Republic in June, but Mr Walsh said better-than-expected bookings so far meant expansion plans were well under way.

“We have had great interest right across Europe in terms of airports approaching us and wanting us to provide services there,” Mr Walsh said.

“We have taken the decision to increase the fleet, which means we will be flying with four or five aircraft and we are considering which countries to move to.”

At present, the airline has two aircraft operated by Iberia’s crew.

He said the company would announce one new major route in the “very near future”.

Mr Walsh was speaking as International Airlines Group, which also owns Aer Lingus, beat expectations to post record operating profits in its traditionally weak first quarter.

The group made €170m (£144m) in operating profit for the three months to March 31, up from €155m for the same period in 2016.

The results were buoyed by an almost 11pc drop in fuel costs. However, revenue fell nearly 3pc to €4.9bn. IAG said that this was a result of the late timing of Easter this year and the fall in the value of sterling, which has deterred some British travellers from heading overseas.

Willie Walsh, chief executive of British Airways owner IAG, has said investments made to attract premium customers have worked

Mr Walsh said growth in what the company calls ‘premium’ passengers - usually business customers or leisure travellers who opt not to travel economy - had played an important part with such traffic rising as much as 20pc on Aer Lingus in the period.

The chief executive said his company had invested significantly in both the Irish carrier’s and Iberia’s trans-Atlantic offering, which make up a significant portion of premium seats.

At the same time, IAG has reduced capacity on its more established low-cost carrier Vueling. Mr Walsh said growth rates would pick up in 2018.

On the subject of the troubled Italian airline Alitalia, which entered administration earlier this week, Mr Walsh he was “not at all interested” in buying the company.