British Airways owner IAG’S profits take off

THE owner of British Airways has notched up record annual earnings after cashing in on the bounce back in global travel demand.

International Airlines Group (IAG) reported underlying operating profits of €3.5bn (£3bn) for 2023, nearly three times the €1.3bn (£1.1bn) in 2022 and higher than its pre-pandemic peak.

The group – which also owns Iberia, Vueling and Aer Lingus – said demand continues to be robust, with the group’s airlines 92pc booked up for the first quarter of the year and 62pc for the first half. Its results showed that pre-tax profits for the year jumped to €3.1bn (£2.7bn) from €415m (£355m) in 2022.

However, shares fell 1pc amid concerns over aircraft availability and softer demand for Asia routes.

Luis Gallego, the IAG chief executive, said: “In 2023, IAG more than doubled its operating margin and profits compared to 2022 ... recovering capacity to close to pre-covid levels.”

In the fourth quarter, underlying earnings lifted 5pc to €502m. The group said capacity for the final three months of 2023 was at 98.6pc of the levels seen before the pandemic in 2019, with fullyear capacity at 95.7pc of those levels.

At BA, capacity recovered more slowly to 90.1pc of 2019 levels. The group said it expects to grow overall capacity by around 7pc in 2024.

John Moore, senior investment manager at RBC Brewin Dolphin, said: “IAG hasn’t really taken off since the pandemic. But easyjet’s return to the FTSE 100 confirms that conditions are generally smoother for airlines and these results from IAG may just be the catalyst its share price needs.”