The owner of British Airways and the Irish airline Aer Lingus posted better-than-expected first-quarter earnings on Friday with a forecast-beating operating profit of €68 million ($73 million), as the group looks forward to a profitable summer.
International Airlines Group, which also owns Iberia and Vueling, said it was continuing to register a rebound in leisure travel, especially between European cities.
This rebound is reflected in the fact that in the same quarter in 2023, IAG's operating profit was €9 million.
“Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvements to both revenue and operating profit,” said IAG chief executive Luis Gallego.
“Our group benefits from the strength of our core markets – North Atlantic, South Atlantic and intra-Europe – and the performance of our brands.
“We are well-positioned for the summer. The high demand for travel is a continuing trend.”
Business travel, IAG said, was recovering more slowly but, nonetheless, passenger revenue per available seat kilometre (better known in the industry as 'ASK') for the first quarter was 4.4 per cent higher than in the same period last year.
Russ Mould, investment director at AJ Bell feels the lacklustre recovery in business travel means the highly competitive leisure market is IAG's “bread and butter for the time being”.
“Business demand is still a laggard compared to leisure travel, he said.
“That’s a bugbear for International Consolidated Airlines given its British Airways brand used to hang its reputation on attracting large swathes of business customers.
“The advent of video conferencing systems Teams and Zoom have done away with the need to travel to meetings for many companies and that’s hit IAG where it hurts.
“While there are tentative signs of a recovery in demand for in-person meetings in various parts of the world, there is a still long way to go before we return to pre-Covid levels.”
While IAG's fuel costs were 5 per cent lower, operating costs were higher given the increasing number of flights.
Employee costs jumped by more than 14 per cent, due to staff wages being pushed up and the recruitment of more staff before what is predicted to be a busy summer schedule.
“It’s pleasing to see positive progress on all key financial metrics,” said Derren Nathan, head of equity research, Hargreaves Lansdown.
“Lower fuel costs were complemented by a greater mix of more modern efficient aircraft, and operational costs are also being tightly managed.
“There was little in the way of forward guidance but the tone was confident, with IAG well positioned for the summer, against a backdrop of continuing high demand for leisure travel.”
'More challenging'
IAG numbers impressed analysts, given that the first quarter is often loss-making for airlines, with fewer bookings in January and February.
Strikes hit IAG's large European rivals during the quarter. Lufthansa and Air France-KLM reported worse-than-expected earnings numbers.
“Lufthansa had strikes, which was the big problem. Air France-KLM had some one-offs, but IAG was still better. IAG is the higher-margin group anyway: Double-digit margins vs single digits at the others in general,” said Alex Irving at Bernstein.
While IAG said its performance in its European and American markets had been strong, the rest of the world is “currently more challenging”, with capacity to the Africa, Middle East and South Asia regions increasing by a mere 0.4 per cent.
“In particular, the conflict in the Middle East has impacted flying by most of our airlines to the region,” the group said.
However, Mr Gallego added that IAG's exposure to the Middle East was “very small”, so it had not registered a big impact from the conflict.
Shares in IAG rose by 1.5 per cent on Friday morning in London.
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
Killing of Qassem Suleimani
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Killing of Qassem Suleimani
Name: Peter Dicce
Title: Assistant dean of students and director of athletics
Favourite sport: soccer
Favourite team: Bayern Munich
Favourite player: Franz Beckenbauer
Favourite activity in Abu Dhabi: scuba diving in the Northern Emirates
if you go
The flights
Fly direct to Kutaisi with Flydubai from Dh925 return, including taxes. The flight takes 3.5 hours. From there, Svaneti is a four-hour drive. The driving time from Tbilisi is eight hours.
The trip
The cost of the Svaneti trip is US$2,000 (Dh7,345) for 10 days, including food, guiding, accommodation and transfers from and to Tbilisi or Kutaisi. This summer the TCT is also offering a 5-day hike in Armenia for $1,200 (Dh4,407) per person. For further information, visit www.transcaucasiantrail.org/en/hike/
THREE
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Why%20all%20the%20lefties%3F
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SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S24%20ULTRA
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GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
The%20Color%20Purple
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EBlitz%20Bazawule%3Cbr%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EFantasia%20Barrino%2C%20Taraji%20P%20Henson%2C%20Danielle%20Brooks%2C%20Colman%20Domingo%3Cbr%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
Disability on screen
Empire — neuromuscular disease myasthenia gravis; bipolar disorder; post-traumatic stress disorder (PTSD)
Rosewood and Transparent — heart issues
24: Legacy — PTSD;
Superstore and NCIS: New Orleans — wheelchair-bound
Taken and This Is Us — cancer
Trial & Error — cognitive disorder prosopagnosia (facial blindness and dyslexia)
Grey’s Anatomy — prosthetic leg
Scorpion — obsessive compulsive disorder and anxiety
Switched at Birth — deafness
One Mississippi, Wentworth and Transparent — double mastectomy
Dragons — double amputee
Mohammed bin Zayed Majlis
UAE currency: the story behind the money in your pockets
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
FA%20Cup%20semi-final%20draw
%3Cp%3ECoventry%20City%20v%20Manchester%20United%C2%A0%3C%2Fp%3E%0A%3Cp%3EManchester%20City%20v%20Chelsea%3C%2Fp%3E%0A%3Cp%3E-%20Games%20to%20be%20played%20at%20Wembley%20Stadium%20on%20weekend%20of%20April%2020%2F21.%C2%A0%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
Godzilla%20x%20Kong%3A%20The%20New%20Empire
%3Cp%3E%3Cstrong%3EDirector%3A%20%3C%2Fstrong%3EAdam%20Wingard%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStarring%3A%20%3C%2Fstrong%3EBrian%20Tyree%20Henry%2C%20Rebecca%20Hall%2C%20Dan%20Stevens%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%204%2F5%3C%2Fp%3E%0A
In Praise of Zayed
A thousand grains of Sand whirl in the sky
To mark the journey of one passer-by
If then a Cavalcade disturbs the scene,
Shall such grains sing before they start to fly?
What man of Honour, and to Honour bred
Will fear to go wherever Truth has led?
For though a Thousand urge him to retreat
He'll laugh, until such counsellors have fled.
Stands always One, defiant and alone
Against the Many, when all Hope has flown.
Then comes the Test; and only then the time
Of reckoning what each can call his own.
History will not forget: that one small Seed
Sufficed to tip the Scales in time of need.
More than a debt, the Emirates owe to Zayed
Their very Souls, from outside influence freed.
No praise from Roderic can increase his Fame.
Steadfastness was the Essence of his name.
The changing years grow Gardens in the Sand
And build new Roads to Sand which stays the same.
But Hearts are not rebuilt, nor Seed resown.
What was, remains, essentially Alone.
Until the Golden Messenger, all-wise,
Calls out: "Come now, my Friend!" - and All is known
- Roderic Fenwick Owen
What are the GCSE grade equivalents?
- Grade 9 = above an A*
- Grade 8 = between grades A* and A
- Grade 7 = grade A
- Grade 6 = just above a grade B
- Grade 5 = between grades B and C
- Grade 4 = grade C
- Grade 3 = between grades D and E
- Grade 2 = between grades E and F
- Grade 1 = between grades F and G
Pathaan
%3Cp%3E%3Cstrong%3EDirector%3A%3C%2Fstrong%3E%20Siddharth%20Anand%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3EStars%3A%3C%2Fstrong%3E%20Shah%20Rukh%20Khan%2C%20Deepika%20Padukone%2C%20John%20Abraham%C2%A0%3C%2Fp%3E%0A%3Cp%3E%3Cstrong%3ERating%3A%3C%2Fstrong%3E%203%2F5%3C%2Fp%3E%0A
Mohammed bin Zayed Majlis
Killing of Qassem Suleimani
UAE currency: the story behind the money in your pockets
FULL%20FIGHT%20CARD
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