IAG sees strong summer demand as Q1 profits take off

10th May 2024 07:04

(Sharecast News) - British Airways owner IAG said it was "well positioned" for the summer after posting a huge rise in first quarter profit on the back of strong leisure travel demand, especially over the Easter holidays.

Operating profit before exceptional items in the three months to March 31 surged to €68m from €9m a year earlier. Passenger capacity grew 7% over the period.

On an after-tax basis, IAG posted a better-than-expected loss of €4m, narrower than the €87m reported a year earlier. Revenues rose 9% to €6.42bn.

"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," said chief executive Luis Gallego.

"Investment across the group in transformation is delivering encouraging improvements in punctuality and customer experience at our airlines. IAG Loyalty continues to perform very well. "We are well-positioned for the summer. The high demand for travel is a continuing trend."

Passenger revenue per available seat kilometre (ASK) was 4.4% higher year on year, through the benefit of the timing of Easter and a continued strong leisure traffic recovery, with business traffic recovering more slowly.

IAG also owns Aer Lingus, Iberia and Vueling.

While European travel showed signs of momentum, it was a different story in the rest of the world as the wars in Ukraine and Gaza made trading "currently more challenging".

Revenues per passenger per flight in its Africa, Middle East and South Asia market were down because of the impact on services from the conflicts, while ASK revenues to and from Asia-Pacific, also fell as British Airways rebuilt its network to the region after the Covid pandemic.

Reporting by Frank Prenesti for Sharecast.com