Leisure Demand Boosts IAG Q3 Profits

DALLAS - International Airlines Group (IAG) has announced a third-quarter operating profit of €1.2bn (US$1.19bn). This is compared to an operating loss of €452m (US$449m) for the same period last year.

IAG, which is made up of Aer Lingus (EI), British Airways (BA), Iberia (IB), Level (IB), and Vueling (VY), said that BA was the group's most profitable carrier. The British flag carrier provided an operating profit of €411m (US$408m). VY came in second, making €259m (US$257m), followed by IB, who posted €246m (US$244m). EI, meanwhile, made €139m (US$138m).

The Q3 results come after IAG confirmed an order for an additional Airbus A320neo family aircraft. This brings the total number of the type ordered by the group this year to 59.

Mr. Gallego said that the airline group remained focused on adapting to meet demand and rebuilding its profits. Photo: IAG

CEO Comments

Speaking of the results, Luis Gallego, IAG CEO, said: "We achieved another strong performance in the third quarter…All our airlines were significantly profitable, and we are continuing to see strong passenger demand, while capacity and load factors recover."

"While demand remains strong, we are conscious of 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 re-building our profitability and cashflows and capitalising on our high level of liquidity. This will allow us to allocate capital while investing in a disciplined way in our service and our people, to build capacity and enable future growth."

He continued, "As we build back our operational resilience, we are confident in our strengths as a Group: first, a portfolio of leading airline brands; second, leading positions in our key markets and hubs; and third, the flexibility afforded by IAG to drive operational efficiency and innovation. These will enable us to return to pre-COVID levels of profit and generate long-term value for all our stakeholders."

Strong demand in the leisure sector saw VY be the second most profitable airline in the group. Photo: Fabrizio Spicuglia/Airways

Rising Passenger Numbers

Passenger load factor averaged 81.1%, up from 78% in quarter two. This, the group said, was 'driven primarily by IAG's key regions of European short-haul (91% of 2019), North America (92%) and Latin America & Caribbean (75%).'

Leisure travel provided the group's most robust performance, as Gallego explained: "Leisure demand is particularly healthy, and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily."

A full-year operating profit, before exceptional items, of €1.2bn (US$1.1bn) is expected to be announced now that all its airlines are back in profit.

Featured Image: British Airways Airbus A350-1000 (G-XWBC). Photo: Roberto Leiro/Airways