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BA owner IAG says demand holding strong after summer boost

Published 10/28/2022, 02:18 AM
Updated 10/28/2022, 04:26 AM
© Reuters. FILE PHOTO: British Airways tail fins are pictured at Heathrow Airport in London, Britain, May 17, 2021. REUTERS/John Sibley/File Photo
ICAG
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By Paul Sandle

LONDON (Reuters) - British Airways owner IAG (LON:ICAG) said demand for its flights had not wavered after a strong summer that saw revenue exceed pre-pandemic levels despite a cap on capacity at its London Heathrow hub and lingering COVID restrictions in Asia.

Chief Executive Luis Gallego said all of IAG's carriers - which include Iberia, Aer Lingus and Vueling - were "significantly profitable" in the quarter and the recovery looked set to continue.

The group's capacity will increase to 87% percent of 2019 levels in the fourth quarter, up from 81% in the third quarter.

"We continue to see strong bookings," he said on Friday. "Leisure demand is particularly healthy while business travel continue to recover steadily."

He added that while demand was strong, the group was conscious of the uncertainties in the economic outlook and the ongoing pressures on households.

IAG reported third-quarter adjusted operating profit of 1.21 billion euros ($1.21 billion) in the busy third quarter on revenue of 7.33 billion euros, 0.9% higher than in 2019.

It expected adjusted operating profit for the year to be about 1.1 billion euros, including the 467 million-euro loss it made in the first half.

Shares in IAG, which have risen 19% since the group said on Oct. 13 that its third-quarter profit would be well ahead of market expectations, were trading down 1.3% in early deals on Friday.

IAG said premium leisure revenue had fully recovered by the end of the summer period, while the business channel was around 75% of 2019's level.

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