© Reuters
International Consolidated Airlines Group (LON:) SA (IAG), the parent company of British Airways, reported a record third-quarter pretax profit of EUR1.58 billion ($1.79 billion), marking a 56% increase from last year’s EUR1.01 billion ($1.14 billion). The company’s nine-month profit also saw a significant rise to EUR2.62 billion ($2.96 billion), up from EUR166 million ($188 million) in 2022.
IAG’s total Q3 revenue rose by 18% to EUR8.65 billion ($9.79 billion), with passenger and other revenues increasing, while cargo revenue, which accounts for only 3% of total revenue, fell by 30%. Amid these financial gains, IAG managed to boost passenger capacity by 18%, setting a goal to reach 96% of pre-pandemic levels by the end of the year.
Despite disruptions such as the UK air traffic control system outage, IAG successfully cut fuel unit costs by 6.2% and non-fuel unit costs by 3.5%. The company anticipates these reductions will hit the lower end of the previously guided 6% to 10% improvement for 2023.
The airline group also made strides in reducing its debt, bringing it down to EUR 17.23 billion ($19.48 billion) from EUR 19.98 billion ($22.59 billion). It added 20 new aircraft within nine months, contributing to its capacity expansion.
Fourth quarter customer bookings are progressing as expected, with 75% of revenue already secured. Despite a yearly rise of 17%, IAG shares dropped by 1.4% to 140.90 pence early Friday in London.
In addition to British Airways, IAG’s portfolio includes Aer Lingus, Iberia, and Vueling. These airlines reported Q3 revenue increases of 20%, 19%, and 16% respectively, while Vueling’s summer revenues were not disclosed.
For the upcoming year, IAG anticipates a strong recovery in margins, operating profit, balance sheet, and capacity. This positive outlook is based on the robust demand across all routes, especially on the North and South Atlantic routes and at European holiday destinations.
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