Revenues at the owner of British Airways are back above pre-pandemic levels – despite flying fewer passengers.
International Airlines Group (IAG) booked £6.3billion of business in the three months to September, 0.9 per cent higher than the same period in 2019.
But the rise was driven by higher prices, with passenger numbers still almost a fifth lower than before Covid.
Taking off: International Airlines Group booked £6.3billion of business in the three months to September, 0.9 per cent higher than the same period in 2019
IAG, which also owns Aer Lingus, Iberia and Vueling, said revenue per passenger was 21.9 per cent higher than the same time in 2019.
The rise came despite a summer of travel chaos as flights were cancelled and Heathrow capped passenger numbers at 100,000 per day.
The carrier said profit in the third quarter was £171m, swinging back from a £2.3billion loss this time last year. It expects full-year profit of just under £1billion, providing respite for shareholders after back-to-back years of multi-billion pound losses. But after a note of caution from boss Luis Gallego, IAG shares slipped 3.7 per cent, or 4.4p, to 115.3p.
Gallego said: ‘We are continuing to see strong passenger demand, while capacity and load factors recover. Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.’
But the chief executive added: ‘While demand remains strong, we are conscious of the uncertainties in the economic outlook and the ongoing pressures on households.’
Hargreaves Lansdown analyst Derren Nathan said the BA owner has staged an ‘impressive turnaround’ after Covid. But he added: ‘As the cost of living crisis intensifies in many key markets, holidays are set to drop off the essentials list and so we are cautious about next year.’ IAG said overall 2022 capacity will be just 78 per cent of 2019 levels.
But it expects a bumper Christmas, with passenger numbers up to 87 per cent of pre-pandemic levels in the last three months of 2022, rising to 95 per cent of the 2019 figures in the first three months of 2023.
Interactive Investor’s investment head Victoria Scholar said the squeeze on incomes is piling pressure on IAG.
It is also struggling to woo back business travellers due to the shift to Zoom meetings.
Scholar said: ‘After the disastrous impact of the pandemic, 2022 was meant to be the comeback year for airlines with the resumption of international travel and the release of pent-up demand.
‘While demand has certainly rebounded, particularly for leisure trips, IAG is still facing pressures.’
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