IAG, which also owns Aer Lingus, Iberia and Vueling, reversed its fortunes this summer thanks to strong demand from holidaymakers during the quarter from July to September. The company had made a loss of €452 million for the same period of 2021.
The aviation giant said revenue for the quarter of €7.3 billion was around 1% higher than in 2019, despite BA having to cut back its planned schedule this summer due to the daily cap on passengers imposed by Heathrow airport. The limit of 100,000 departing passengers per day is due to finally be removed this weekend (29-30 October).
Luis Gallego, IAG’s chief executive, said: “All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover.
“Leisure demand is particularly healthy, and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.”
As a group, IAG said that passenger capacity for the third quarter was still only 81.1%, with the recovery being led by flights within Europe, as well as to North America, Latin America and the Caribbean.
The company has particularly benefited from strong bookings of its premium cabins by leisure customers, with passenger yields for the quarter up by 22.9% compared with 2019.
But Gallego also struck a note of caution as the results were announced due to the cost of living crisis and rapidly rising inflation.
"While demand remains strong, we are conscious of the uncertainties in the economic outlook and the ongoing pressures on households,” he added.
“Against this backdrop, we are focused on adapting our operations to meet demand, strengthening our balance sheet by rebuilding our profitability and cashflows and capitalising on our high level of liquidity.”
IAG said its overall capacity would recover to 78% of 2019 levels for the whole of 2022, with capacity reaching 87% of pre-Covid numbers during the final quarter of this year. IAG plans to further increase capacity in the first quarter of 2023 up to around 95% of 2019’s level.
The company also stressed that BA’s operational performance had “significantly improved” after being hit by waves of cancellations in the early part of the summer.
IAG said that it expected its operating profit to be around €1.1 billion for the current financial year.
