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BA-owner IAG returns to profit after Covid-19 slump
Posts first quarterly profit since Covid-19; Says demand growing in Europe; Capacity still limited at Heathrow
This photograph taken in Geneva on July 28, 2022 shows planes of carriers British Airways, Swiss International Air Lines, EasyJet and Turkish Airlines seen from the Geneva Airport air traffic control. British Airways-owner IAG on Friday returned to profit for the first time since the outbreak of the Covid-19 pandemic as demand for European flights between April and June boosted its battered finances. — AFP
British Airways-owner IAG on Friday returned to profit for the first time since the outbreak of the Covid-19 pandemic as demand for European flights between April and June boosted its battered finances.
IAG posted an operating profit for the second quarter of 293 million euros ($300 million), compared with an operating loss of 967 million euros in the same period of 2021, the first time it has delivered a profit since 2019.
“This result supports our outlook for a full year operating profit,” Chief Executive Luis Gallego said. IAG’s shares rose 2.5 per cent in early trade before drifting back to be flat.
The owner of Iberia, Vueling and Aer Lingus is returning to some form of normality following the most turbulent two years in the history of flying, when Covid left airports deserted, planes parked up and many airlines going bust.
In recent months the industry, particularly in Europe, has struggled to cope with the rapid rebound in demand, with huge queues building at many airports due to a shortage of staff, prompting last-minute cancellations and angry scenes.
However, a move to limit flight numbers by the industry appears to have stabilised the situation. London’s Heathrow and lower cost airlines such as easyJet and Wizz Air have all reported improving operations this week.
IAG said its passenger capacity hit 78 per cent of 2019 levels in the second quarter, and forecast capacity of around 80% in the third quarter, and around 85 per cent in the fourth.
That’s down from previous estimates of 85 per cent and 90 per cent for the third and fourth quarters respectively, due to the ongoing disruption at Heathrow for BA.
Gallego told reporters he hoped Heathrow would have stabilised by the end of the year.
“Our industry continues to face historic challenges due to the unprecedented scaling up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute,” Gallego said.
Despite the pressure, some airlines are returning to growth.
Air France-KLM beat quarterly expectations as its core and net incomes turned to profits on Friday, however it also lowered its third-quarter capacity forecast due to airport disruption.
IAG noted that fourth-quarter bookings were seasonally low, but it was seeing no signs of weakness in demand. — Reuters
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