Aer Lingus, British Airways, Iberia Owner IAG Posts $73 Million Profit In Q1 With Strong Travel Demand

The International Airlines Group (IAG), the parent company of Aer Lingus, British Airways, Iberia, and others, has issued its Q1 2024 financial results, saying that strong demand has driven up the group’s revenues, increasing its operating profit margin year-on-year (YoY).

Transformation initiatives bearing fruit

According to Luis Gellego, the chief executive officer (CEO) of IAG, the group’s transformation initiatives and ever-growing demand for travel, including over the Easter holidays, delivered good results, with the group showing improvements in revenues and operating profit. In total, IAG earned €6.4 billion ($6.8 billion) of revenue during the quarter, ending the period with an operating profit of €68 million ($73.3 million), compared to an operating profit of €9 million ($9.7 million) in Q1 2023.

However, the group was still loss-making, as its net loss amounted to €4 million ($4.3 million) in Q1 2024. During the same period a year prior, the group lost €87 million ($93.7 million). IAG noted that its non-fuel unit costs were as expected, reflecting its planned investment that will deliver customer benefits and efficiency improvements, as well as the annualized impact of various pay deals reached with unions in 2023.

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Different performance in different markets

IAG went into detail about the group’s performance in five different markets, including Asia-Pacific, Africa, Middle East, and South Asia, Europe, Domestic (Spain and the United Kingdom), Latin America and the Caribbean, and North Atlantic. Overall, its capacity, measured in available seat kilometers (ASK), increased by 7% YoY.

However, some markets’ capacity increased by little, including North Atlantic and Africa, Middle East, and South Asia, where IAG’s ASKs grew by 0.6% and 0.4%, respectively. Meanwhile, the largest capacity growth was in Asia-Pacific, where its capacity increased by 43.4%, while its Latin America and Caribbean-bound flying was up 14.4%.

Photo: Fasttailwind | Shutterstock

At the same time, passenger revenue per ASK (unit revenue) was lower on IAG’s Africa, Middle East and South Asia, Asia-Pacific, and Latin America and Caribbean networks, decreasing by 3.4%, 12.6%, and 1.4%, respectively. The group explained that while certain markets performed well, the trio was “more challenging.”

Still, IAG highlighted that the strong demand for travel should continue in the long term, with the group being well-positioned for the upcoming summer period. It plans to grow its full-year capacity by 7%, which will include investments in its core markets.

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Progressing with the Air Europa merger

IAG offered little detail about the progress of its Air Europa merger, stating that it has presented a package of remedies to the European Commission (EC). It expects to fully acquire the Spanish airline, which will complement its operations at Madrid Barajas Airport (MAD).

Photo: Toni M. | Shutterstock

According to data from the aviation analytics company Cirium, out of the 20,717 weekly departures scheduled from Spanish airports in May 2024, Air Europa, Iberia, and Iberia Express have scheduled 4,228 weekly itineraries, representing a market share of 20.4%.

Still, the EC issued a statement of objections to IAG on April 26, with the Commission detailing that it expressed concerns about competition on domestic routes, short-haul routes to certain destinations, and long-haul flights to North and South America.

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