International Airlines Group, the owner of British Airways and Iberia, on Friday said its revenues had returned to pre-pandemic levels and increased its outlook for full-year profit.
The company, which also operates Aer Lingus, Vueling and Level, announced revenue for the three months to September 30 was €7.3bn, 0.9 per cent above the same quarter in 2019, the last full year before Covid-19 started to affect air travel.
IAG said it expected pre-exceptional operating profits for the 12 months to December 31 of €1.1bn, an upgrade from a mid-year projection that results for 2022 would be “positive”.
The company’s shares, which had risen 26 per cent in October until Thursday’s close on optimism about the aviation recovery, were down 1.1 per cent in early trading on Friday at 118p.
IAG’s figures are the latest evidence of a strong rebound in the fortunes of airlines after 18 months when operations were severely constrained by travel restrictions imposed to combat Covid.
IAG had already announced on October 13 that results for the quarter had proved better than expected and said it anticipated operating profits for the three months of €1.2bn — the same figure it announced in Friday’s results.
That profit compares with a €452mn loss for the same period in 2021, when operations were heavily affected by coronavirus curbs. Pre-tax profit was €1bn, against a pre-tax loss of €714mn for the same period of 2021.
In the third quarter, IAG operated 81 per cent of the capacity it did in the same quarter of 2019. For the fourth quarter, it said it expected to operate 87 per cent of pre-pandemic capacity.
The recovery came in spite of restrictions on passenger numbers at London’s Heathrow, the group’s most important hub, imposed by the airport’s owner to cut queues.
Since July, the airport has imposed a 100,000-a-day limit on the number of departing passengers, although it announced this week that the cap would be lifted from this Sunday.
Luis Gallego, IAG’s chief executive, called the figures a “strong performance”.
“All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover.”
Gallego said leisure demand was “particularly healthy” — the company said in the results that premium leisure travel had “fully returned” to 2019 levels.
Business travel continued to “recover steadily”, Gallego added. The company said business travel in the quarter was running at about 75 per cent of pre-pandemic levels.
However, Gallego acknowledged the “uncertainties” in the economic outlook and the “ongoing pressures on households”.
“Against this backdrop, we are focused on adapting our operations to meet demand, strengthening our balance sheet by rebuilding our profitability and cash flows and capitalising on our high level of liquidity.”