IAG Returns to Profit for First Time Since Pandemic — Update

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By Anthony O. Goriainoff

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International Consolidated Airlines Group SA said Friday that it returned to profit in the second quarter for the first time since the pandemic started as demand recovered across all its airlines, and that this supported its outlook for a full year adjusted operating profit.

The airline group–which houses carriers British Airways, Iberia and Vueling, among others–said that operating profit for the second quarter was 293 million euros ($298.8 million) compared with an operating loss of EUR967 million the year before. The operating loss for the first half narrowed to EUR438 million from EUR2.04 billion for the first six months of 2021.

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Adjusted operating loss–a metric which strips out exceptional and other one-off items–for the first half was EUR467 million, compared with a loss of EUR2.18 billion a year earlier.

The company said that its performance in the second quarter reflected the significant rise in capacity, load factor–a measure of how full a plane is–and yield compared to the first quarter.

IAG said premium leisure remained strong and that business travel continued to see a steady recovery across all its airlines.

The company said Iberia and Vueling were the best performers in the group as Spain’s domestic market and the routes to Latin America led the recovery, with June’s demand exceeding 2019’s levels.

The company said forward bookings showed sustained strength and that demand in the North Atlantic region continued growing after June’s lifting of Covid-19 testing requirements in the US

“Although bookings into the fourth quarter are seasonally low at this time of year, we are seeing no signs of any weakness in demand,” the company said.

IAG said the industry continued facing challenges due to the unprecedented scaling up in operations, and highlighted the UK where the operational challenges of Heathrow Airport have been acute.

The company said that for the six months ended June 30, its net loss was EUR654 million compared with a net loss of EUR2.05 billion in the year prior-period.

Revenue jumped to EUR9.35 billion compared with EUR2.21 billion.

IAG said second-quarter passenger capacity was 78% of that seen in 2019 before the coronavirus pandemic, below guidance of 80%. Passenger load factor for the first half was 77.8%.

Capacity for the third quarter will be around 80% and around 85% for the fourth quarter, the airline said.

For the full year it sees capacity at around 78% of 2019, compared with previous guidance of around 80%. The company said this was mostly due to challenges at London’s Heathrow Airport, it said.

As at June 30 net debt was down EUR688 million from December to EUR11 billion, but IAG said it expects debt to increase by the end of the year.

Write to Anthony O. Goriainoff at [email protected]

Corrections & Amplifications

This article was corrected at 0946 GMT because the original misstated the currency. IAG’s operating loss for the first half of the year narrowed from EUR2.04 billion in the first six months of 2021.

IAG’s operating loss for the first half of the year narrowed from EUR2.04 billion in the first six months of 2021. “IAG Returns to Profit for First Time Since Pandemic — Update,” at 0744 GMT, misstated the currency.

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Credit: www.marketwatch.com /

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