British Airways parent IAG posts record €1.75bn summer profit
James ChappleBritish Airways parent IAG achieved record summer profits this year despite the impact of the August bank holiday weekend air traffic control outage.
IAG recorded third-quarter (summer) operating profit (three months to 30 September) of €1.745 billion, up from €1.218 billion a year earlier. Profit after tax ran to €1.230 billion compared with €853 million during the same period last year.
Non-fuel costs for the quarter, meanwhile, came in 3.5% below summer 2022 despite around a one percentage point impact "from higher disruption across the business".
Chief among these, said IAG, was the outage suffered by UK air traffic control services provider Nats over the August bank holiday weekend.
IAG said the majority of these costs fell on British Airways. It has pledged to invest in making BA’s operations more resilient over the winter.
"We expect 2023 to be a year of strong recovery in our margins, operating profit and balance sheet and towards pre-Covid-19 levels of capacity," said IAG.
Chief executive Luis Gallego added: "This quarter represents a record third-quarter performance for IAG. This is allowing us to invest in the business and reduce a significant amount of our debt.
"During the third quarter, we saw sustained strong demand across all our routes, in particular the north and south Atlantic and in all leisure destinations around Europe."
Across the group, Q3 capacity increased by 17.9% year-on-year to 95.6% of pre-Covid (Q3 2019) levels thanks primarily, said IAG, to a focus on European holiday destinations and delivery of 20 new aircraft. IAG expects full-year capacity for 2023 to run to around 96% of pre-pandemic levels.
Meanwhile, bookings for Q4 (three months to 31 December) are "as expected", said IAG, with around 75% of expected fourth-quarter passenger revenue already booked.
Besides BA, IAG’s stable also includes Aer Lingus, Iberia and Vueling. BA’s total third-quarter revenue increased by 20% year-on-year over the summer, Iberia’s by 19% and Aer Lingus’s by 16%. IAG did not disclose Vueling’s summer revenues.
IAG added it would invest further in stabilising BA’s operations amid a "challenging external environment and supply chain constraints" to ensure more resilient performance over the winter.
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Place of registration: England and Wales.
Company number 08723341.
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