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The National Times - British Airways parent IAG flies back to profit

British Airways parent IAG flies back to profit

ECONOMY 28.07.2023
British Airways parent IAG flies back to profit
British Airways parent IAG flies back to profit / Photo: © AFP/File

IAG, parent of British Airways, said Friday it returned to first-half profit as the aviation sector recovers from the Covid pandemic despite inflation lifting company costs and ticket prices.

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Profit after tax was 921 million euros ($1 billion) in the first six months as passenger demand rallied at IAG, owner also of Spanish carrier Iberia and Ireland's Aer Lingus among others.

IAG had posted a net loss totalling 654 million euros one year earlier, it added in a statement.

"Our strong profits since the start of the year are helping to fund investment for our customers, and to improve our balance sheet by reducing debt," said group chief executive Luis Gallego.

"We are aiming to be back to pre-pandemic capacity at the end of this year," he added.

Group revenue surged 45 percent to 13.6 billion euros in the first half.

"Customer demand remains strong across the group, particularly for leisure travel, with around 80 percent of passenger revenue for the third quarter already booked," Gallego added in the statement.

Shares in IAG climbed 2.5 percent at the start of trading Friday following the results.

- Sector-wide recovery -

Elsewhere Friday, Air France-KLM said it had doubled year-on-year net profit in the second quarter to 604 million euros.

The Franco-Dutch group saw sales rise almost 14 percent to 7.6 billion euros, boosted by an increase in passengers and higher air fares.

Ticket prices have soared since the pandemic, driven by rising fuel costs, increased demand and capacity constraints.

Air France-KLM said it expects bookings for the current quarter -- which includes the crucial summer holiday season -- to be at the same or higher level compared with 2022.

However, inflation is affecting the group's costs, which have risen 5.6 percent in the second quarter, compared with less than one percent in the first quarter.

Airlines posted huge losses and laid off thousands of staff during the Covid pandemic that grounded planes worldwide for long periods.

IAG on Friday added it had converted options on six Boeing 787-10 long-haul planes into firm orders for British Airways, while taking on another six options.

It is also converting one Airbus A350-900 option into a firm order for Iberia.

The firm orders will be delivered in 2025 and 2026, IAG said.

"These latest generation aircraft will contribute to restoring capacity to pre-pandemic levels," said Gallego.

"They will be among the most fuel-efficient aircraft in our long-haul fleet and will help towards our commitment to achieve net zero carbon emissions by 2050," he added.

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E.Reid--TNT

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