IAG Very Well Positioned as High Demand Continues

IAG (LON: IAG), the parent company of British Airways, Aer Lingus, and Iberia, among others, has reported strong first-quarter results. 

Revenue reached €6.43 billion, up from the €5.89 billion reported in Q1 1013. Meanwhile, operating profit also rose, coming in at €68 million, up from €9 million in Q1 last year and topping the IAG compiled consensus estimate of €49 million.

The airline group attributes this success to a strong demand for travel, positioning them favourably for the upcoming summer season.

The increase in revenue and operating profit reflects a surge in demand across IAG's airlines, particularly evident over the Easter holidays. Passenger revenue per available seat kilometre (ASK) rose by 4.4% compared to the first quarter of 2023, fueled by a rebound in leisure travel, while business traffic recovery remained more gradual.

Despite expected increases in non-fuel unit costs due to planned investments and wage settlements, IAG managed to reduce fuel unit costs by 4.9%, benefiting from lower fuel prices and enhanced aircraft efficiency.

Luis Gallego, IAG's Chief Executive Officer, emphasised the group's strong position, citing the resilience of core markets and ongoing transformation efforts aimed at enhancing customer experience and operational efficiency. Gallego noted that IAG Loyalty continues to perform exceptionally well, contributing to the company's positive trajectory.

“Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvements to both revenue and operating profit,” said Gallego. “We are well-positioned for the summer. The high demand for travel is a continuing trend.”

Looking ahead, IAG remains optimistic about sustained demand for travel, maintaining a focus on strategic growth and shareholder value creation. 

With expectations of around 7% ASK growth for the full year and a commitment to maintaining a strong balance sheet, IAG is poised to capitalise on the continued trend of high travel demand. “We are well-positioned for the summer,” the company stated.