British Airways owner’s £1bn profit despite airport chaos
THE owner of British Airways has bounced back into the black with demand remaining strong despite the cost-of-living squeeze.
International Consolidated Airlines Group (IAG) yesterday reported operating profits of £1billion for the three months to the end of September, from a loss of £390million the same time a year ago.
A resurgence of leisure travel and steady recovery of business trips boosted sales, the FTSE 100-listed airline group said.
IAG, which also owns Iberia and Aer Lingus, took a heavy hit during the depths of the pandemic.
It was still loss-making earlier this year after the Omicron variant reduced the number of passengers drastically.
But the group reported strong passenger demand in its latest results and saw its revenues just overtake pre-pandemic levels by 0.9 per cent.
Total revenues hit £6.3billion, despite the recent disruption at London’s Heathrow airport and its network in Asia Pacific largely staying closed.
Luis Gallego, chief executive, said all of IAG’s carriers were “significantly profitable” in the quarter and the recovery looked set to continue.
“We continue to see strong bookings,” he said, though he added that the group was conscious of the uncertainties in the economic outlook and the ongoing pressures on households.
Shares in IAG, which have risen 19 per cent since the group said in mid-October that its third-quarter profit would be well ahead of market expectations, fell in early trading yesterday.
Derren Nathan, head of equity research at Hargreaves Lansdown, said: “This is no doubt an impressive turnaround from BA’s parent company and comes despite ongoing headwinds.”
But Julie Palmer, partner at corporate rescue and recovery practice Begbies Traynor, highlighted that business class travel was only back to 75 per cent of pre-pandemic levels.
“These customers are often the ones who ‘turn left’ on boarding and generate a significant proportion of the profit,” she said.