British Airways owner IAG expects bumper profits for the third quarter after a solid period for bookings.
The London-headquartered company told investors on Thursday afternoon it expects operating profit for the period to be in the region of £1bn (€1.2 billion).
The unexpected announcement sent IAG’s share price up as much as 10 per cent, trading at a high of 110.53p just after midday on Thursday, before higher-than-expected US inflation data slashed gains in half.
British Airways owner IAG has revealed that it expects expected profits for the third quarter due to bumper bookings
Looking ahead, BA said in a statement said in a statement: ‘Forward bookings remain at expected levels for the time of year, with no indication of weakness, and accordingly our fourth quarter expectations remain unchanged as of today.’
The company will announce its consolidated results for the nine months to 30 September 2022 on 28 October.
Commenting on IAG’s impending third quarter results Sophie Lund-Yates, an equity analyst at Hargreaves Lansdown said: ‘Despite the rampant cost-of-living pressures facing consumers, the British Airways ticket desk has been keeping very busy it seems.
‘IAG has been one of the hardest hit carriers since the pandemic, with long-haul and business trips taking a lot longer to take off back towards pre-covid levels than its short haul counterparts.
Despite the buoyant figures, Lund-Yates warned that the cost-of-living crisis could impact the overall outlook.
She said: ‘There is still a long way to go before any champagne can be popped. Consumer behaviour is yet to fully adjust to a world of higher inflation and increased costs.
‘If spending starts to rein in, the strong forward order book may well come under pressure. Then there’s the question of IAG’s eye watering debt pile, following huge liabilities taken on to get through the worst of the pandemic storm.
‘Ultimately, this upgrade from expectations is a very welcome surprise, but whether the spritely mood music can be maintained is another question entirely.’
British Airways’ owner International Consolidated Airlines Group (IAG) saw a 1.12 per cent spike in its share price, taking it to 102.88p
IAG shares experienced another boost earlier in the week as Heathrow regained its status as Europe’s busiest airport.
The west London airport said on Tuesday it was used by more passengers between July and September than rivals in cities such as Paris, Amsterdam, Frankfurt and Madrid.
The news helped boost the share price for a number of airlines operating out of the UK.
A year ago, Heathrow blamed the UK’s comparatively strict coronavirus travel rules for it falling in the rankings to become the 10th busiest airport in Europe, after being number one in 2019.
Heathrow has seen an increase in usage since the UK’s restrictions on travellers were lifted in March.
Some 5.8 million passengers travelled through Heathrow in September. But demand last month was still 15 per cent below pre-virus levels in September 2019.
The airport insisted the outlook for future demand ‘remains uncertain’.
This is due to ‘growing economic headwinds, a new wave of Covid and the escalating situation in Ukraine’.
It added: ‘However, we expect peak days at Christmas to be very busy.’
Heathrow said the ‘vast majority’ of passengers travelling through the airport this summer ‘had a very good experience’ as a cap on the number of departing travellers ‘successfully kept supply and demand in balance’.
This followed long queues and problems with baggage handling in early July, which was blamed on staff shortages.
The cap will be lifted on 29 October.
