BA profits soar as demand for holidays goes sky-high
PROFITS for the owner of British Airways have soared amid a bounce back in holidaymakers after the Covid crisis.
International Airlines Group benefited from higher sales and lower fuel costs with the first three months of the year showing an operating profit of £58.5million, up from £7.7million the same time last year.
Revenues rose to £5.5billion, up from £5.1billion last year.
IAG said the improved profits and sales were driven by stronger demand across its airlines, which also includes Aer Lingus, Iberia, and Vueling.
It highlighted travel between major European cities, particularly for leisure, while business travel has recovered more slowly.
But conflict in the Middle East affected flying there for most of its airlines.
Fuel costs were 5% lower than the previous year due to lower average prices and more efficient aircraft deliveries.
But IAG still spent more on operating the business over the latest quarter because of the higher volume of flights.
Employee costs jumped by more than 14% year on year due to staff wages being pushed up and hiring more staff for a busy summer schedule. Luis Gallego, IAG’s chief executive, said: “Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvements to both revenue and operating profit.
“Our group benefits from the strength of our core markets – North Atlantic, South Atlantic and intra-Europe – and the performance of our brands. We are well-positioned for the summer.The high demand for travel is a continuing trend.” Derren Nathan, head of equity research at Hargreaves Lansdown, said: “The group has maintained altitude.
“The timing of the Easter break no doubt helped but, even so, it’s an impressive start to the year.”
But Russ Mould, from City firm AJ Bell, also warned the earlier than normal Easter should not be overlooked.
He added: “If that didn’t feature, it seems inevitable results might not have been so good. It needs more bums on those extra seats.There is scope to do better.”