IAG returns to profit despite 'historic challenges' facing travel
James ChappleBritish Airways parent IAG returned to profit for the first time since the onset of the pandemic despite the "historic challenges" facing the travel industry.
IAG recorded a second-quarter *three months to 30 June) post-tax profit of €133 million on Friday (29 July) after losing nearly €1 billion (€981 million) during the same quarter last year.
The group also posted Q2 operating profit of €293 million, which compares with a loss of €967 million 12 months earlier. It expects operating profit to "improve significantly" in Q3 and to be positive for its 2022 full-year.
Nonetheless, owing to the early year operational challenges relating to Covid-19, IAG made a post-tax first-half loss of €654 million, albeit one significantly reduced from €2 billion a year earlier.
“In the second quarter, we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines," said IAG chief executive Luis Gallego. "This result supports our outlook for a full year operating profit.
“Our performance reflected a significant increase in capacity, load factor and yield compared to the first quarter. Premium leisure remains strong while business travel continues a steady recovery in all airlines."
IAG identified ongoing challenges at Heathrow, where British Airways’ capacity was limited to 69.1% in Q – up from 57.4% in Q1. IAG plans to increase this to around 75% in Q3 (three months to 30 September.
The group has also cut its capacity guidance "mainly due to the challenges at Heathrow". It plans to operate at around 80% capacity in Q3 and 85% in Q4, "a reduction of 5% for the second half of the year compared with previous guidance".
Full-year capacity, meanwhile, is expected to be 78% of 2019 levels, although IAG is hopeful its North America operations will approach 2019 capacity by the end of the year.
“Our industry continues to face historic challenges due to the unprecedented scaling up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute," Gallego continued. "We will continue working with the industry to address these issues as aviation emerges from its biggest crisis ever."
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Place of registration: England and Wales.
Company number 08723341.
Registered address: 6th Floor, 2 London Wall Place, London EC2Y 5AU
