BA owner raises profit forecast as travel demand rebounds
The owner of British Airways has upgraded its full-year profit expectations thanks to strong demand for holiday travel, as the airline group said it expected to fly almost the same number of passengers this year as it did before the coronavirus pandemic.
International Airlines Group (IAG) reported a first-quarter profit for the first time since 2019, before the travel industry was plunged into chaos by Covid lockdowns. It made an operating profit of €9m (£7.9m) in the first three months of the year.
IAG’s share price rose by 3.6% on Friday morning.
Since the end of most global travel restrictions airlines have been racing to restart routes, with demand for holidays in particular soaring and business travel also recovering, albeit more slowly.
British Airways was benefiting from strong demand for leisure travel on long- and short-haul routes, the group said.
IAG, which also owns the Spanish flag carrier Iberia and the budget airline Vueling, said it expects capacity this year to be about 97% of 2019 levels. That means its operating profit for the full year will probably be higher than the €2.3bn it had previously predicted.
Shares rose 4.5% on Friday morning, making IAG the top riser on the FTSE 100.
The group returned to full-year profit in 2022 after racking up losses of almost €11bn through 2020 and 2021.
On Friday it cautioned that it still faced uncertainties over the coming year. Fuel prices in particular could be affected by “ongoing volatility in the geopolitical and macroeconomic environment”, after a year when energy markets have been roiled by Russia’s invasion of Ukraine. Economists are also watching the world’s largest economies closely for signs of recessions as the Federal Reserve and other central banks raise
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