IAG Share Price Spiked Higher, Then Fell 4.01% on Q3 Earnings

The International Consolidated Airlines Grp SA (LON: IAG) share price fell 4.01% after releasing its Q3 earnings results, which indicated that the airline group had recorded Impressive growth in operating profit before exceptional items for the quarter, reaching €1,745 million compared to €1,216 million in Q3 2022.

The airline group’s operating margin also substantially increased to 20.2% compared to 16.6% in Q3 2022. This remarkable performance can be attributed to the following factors:

A substantial increase in capacity (ASK) by 17.9% compared to the previous year, reaching 95.6% of Q3 2019 levels. The growth was mainly focused on European holiday destinations and additional investments in the South and North Atlantic regions. The expansion was supported by the delivery of 20 new aircraft year to date.

Passenger unit revenue experienced a year-on-year increase of 2.2%, reaching 24.6% compared to 2019. This rise is primarily due to the sustained strong demand for leisure travel.

Non-fuel unit costs for the quarter stayed 3.5% below Q3 2022 despite facing approximately a 1.0 percentage point impact from increased disruptions across the business. Notably, the UK NATS systems outage in August contributed to most of these additional costs.

Fuel unit costs for the quarter witnessed a significant decrease of 6.2% year-on-year.

Ongoing efforts to strengthen the balance sheet included the reduction of Gross debt by €2.4 billion, reaching €17.2 billion as of September 30, 2023. The reduction was achieved through the early repayment of a £2.0 billion UKEF-backed loan and the €0.5 billion IAG bond repaid upon maturity.

Luis Gallego, International Airlines Group's CEO, said:  “This quarter represents a record third-quarter performance for IAG. This is allowing us to invest in the business and reduce a significant amount of our debt. During the third quarter, we saw sustained strong demand across all our routes, in particular the North and South Atlantic and in all leisure destinations around Europe. We continue to develop our hubs of Barcelona, Dublin, London and Madrid, supported by our fleet deliveries and future orders. Our strong financial performance is enabling investment in our people and allowing us to improve customer experience further. At the same time, we will keep working towards our sustainability goals.” 

IAG share price. 

The IAG share price fell 4.01% to trade at 137.53p from Thursday’s closing price of 143.28p.