Bloomberg | | Posted by Zarafshan Shiraz
British Airways parent IAG SA posted record third-quarter profit, led by strong summer demand for leisure travel on transatlantic and European routes.
The group, which also includes Spain’s Iberia and Aer Lingus, reported an operating profit of €1.75 billion ($1.85 billion) for the period. Capacity for the full year is expected to reach 96% of pre-Covid 19 levels.
Airlines have benefited from bumper summer as travel got close to pre-pandemic levels and the last remaining travel restrictions were lifted. But the rest of the year looks more challenging, with cost of living pressures in key markets and growing geopolitical difficulties, as the Israel-Gaza conflict adding to the continued closure of airspace over Ukraine.
“We’re very mindful of the geopolitical and macroeconomic uncertainty, in particular the events happening in the Middle East,” said Chief Executive Officer Luis Gallego on a media call. “We continue with the forecast that we’ve had for the year and we are monitoring very carefully the situation.”
IAG shares rose as much as 4.3% and were 1.7% higher at 8:11 a.m. in London. The stock has gained 17% so far this year.
Rival Air France-KLM also reported results on Friday, posting third-quarter revenue, profit and passenger figures that fell slightly below analysts’ estimates.
IAG has made progress on a number of fronts as it rebounds from the devastating effects of the pandemic, when its fleet was virtually grounded. The carrier group regained its investment grade credit rating from Standard & Poor’s and BA reached a tentative deal with its pilot which removes the threat of strike action through 2027.
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