By Geoffrey Smith
Investing.com -- The parent company of British Airways and Iberia said on Friday it expects to return to profit in the current quarter and stay profitable for the rest of the year, despite another hefty loss in the first quarter.
International Consolidated Airlines Group (LON:ICAG) said the rebound in travel demand had suffered only a short-term hit from the winter wave of Omicron-variant COVID-19 and none at all from Russia’s war in Ukraine.
"Demand is recovering strongly in line with our previous expectations,” said chief executive Luis Gallego. “We expect to be profitable from the second quarter onwards and for the full year.”
The group will fly at 80% of 2019 capacity in the current quarter, up from 65% in the first quarter. That will rise to 85% in the summer and 90% in the final quarter of the year. The key North Atlantic routes are expected to be close to pre-pandemic capacity already in the third quarter, thanks to exceptionally strong demand for the premium leisure segment. It also joined its U.S. competitors in saying that business travel is already back at its highest level since the pandemic.
The group said it will concentrate in the near term will be in trying to restore its battered reputation, after a series of operating problems in the first quarter, such as a software outage in February that led to mass cancellations.
The problems have been made worse by widespread staff shortages, not least caused by Omicron.
“The airline's focus at the moment is on improving operations and customer experience and enhancing operational resilience,” Gallego said.
Revenue leaped five-fold in the first quarter to 2.65 billion euros, allowing it to narrow its operating loss to 731 million euros from 1.14 billion euros a year earlier. Net debt inched down to 11.59 billion by the end of the period.