Summary
- The International Airlines Group (IAG) ended H1 2024 with a rising operating profit as travel demand has continued to be strong.
- As a result of the successful half of the year, the group reinstated a dividend to its shareholders.
- During the six months, IAG took delivery of 14 aircraft, including five Airbus A320ceos to cover Vueling’s capacity needs.
The International Airlines Group (IAG), the parent company of Aer Lingus, British Airways, Iberia, LEVEL, and Vueling, has cited robust demand for travel in its core markets as the group ended the first half of 2024 with an operating profit of more than €1 billion ($1.08 billion).
Improving operating profit
Luis Gallego, the chief executive officer (CEO) of IAG, remarked that the group has continued to witness strong demand for air travel in the attractive core markets where IAG’s airlines operate, including the North Atlantic, Latin America, and intra-Europe routes.
As a result, IAG improved its operating profit by €49 million ($53 million), with the company ending H1 2024 with an operating profit of €1.3 billion ($1.4 billion). Its profit after tax, which fell by 1.7% year-on-year (YoY), was €905 million ($979.5 million).
“We are pleased to announce a return to paying a dividend, which reflects our confidence in the business, our performance and our transformation. We are delivering on our strategy and our commitment to sustainable shareholder returns.”
Photo: Mikel Dabbah | Shutterstock
IAG’s dividend was €0.03 ($0.032) per share. Its current issued share capital is 4.8 billion shares, more than 30% of which are held by institutional investors, including Qatar Airways, which has a 25.1% stake in IAG.
According to the group, the interim dividend amounted to €147 million ($159.1 million) in H1.
The last time the group paid a dividend was on December 2, 2019, shortly after the group announced Q3 2019 results, with a dividend of €0.145 ($0.16) per share.
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Despite the operating profit, the International Airlines Group (IAG) was still loss-making during the quarter.
Growing capacity
The group detailed that in H1, it added 7.5% more capacity, measured in available seat kilometers (ASK), YoY. As a result, IAG’s investments in its markets resulted in a total revenue of €14.7 billion ($15.9 billion), with passenger revenues being €13 billion ($14 billion).
In total, the group carried 58.2 million passengers during the first six months of the year, compared to 54.3 million in H1 2023. The average load factor during the former period was 85%, while during the latter, it was 84.1%.
Split between the airlines, Aer Lingus welcomed 5.1 million passengers, while British Airways, Iberia, LEVEL, and Vueling saw 22.1 million, 12.6 million, 379,000, and 17.9 million passengers boarding their aircraft in H1.
Photo: Robert Buchel | Shutterstock
In H1, IAG took delivery of 14 aircraft, including five A320ceo that Vueling leased. The group noted that the five A320ceos would provide backfill for additional aircraft maintenance requirements that were linked to issues and prolonged groundings of A320neo family aircraft powered by the Pratt & Whitney PW1100G engines.
Ch-aviation data showed that Vueling had 25 A320neo and four A321neo aircraft in its fleet, with all of them being equipped with the PW1100G, also known as the Geared Turbofan (GTF).
In addition, Iberia exercised an option to buy a single Airbus A350-900 that the plane maker would deliver in 2026.
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Second time, no dice
Together with the H1 results, IAG announced that it would abandon its attempt to acquire the remaining 80% of shares of Air Europa that it does not already own. Consequently, it paid a €50 million ($54.1 million) break-free penalty to Globalia, the parent company of Air Europa.
Photo: Toni M. | Shutterstock
On August 2, the European Commission (EC) stated the now-abandoned merger attempt, with Margrethe Vestager, the Executive Vice-President of the EC, saying that following an in-depth investigation, the Commission concluded that the merger would have negatively affected competition on numerous routes in, from, and to Spain.
“This is the second time that the Commission was asked to assess the acquisition of Air Europa by IAG under EU merger control rules, after the first attempt failed in 2021 due to the Commission’s competition concerns.”
However, Vestager was adamant that Air Europa was in a stronger position than in 2021, resulting in a greater challenge in identifying adequate remedies to alleviate the EC’s concerns.
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