BA owner IAG expects £1bn profit due to strong summer
British Airways’ owner IAG expects its pre-exceptional operating profit for the third quarter to be around €1.2bn (£1bn) after better than expected trading.
The airline consortium said strong passenger revenue drove profits while forward bookings remained at expected levels, showing no signs of slowing down.
Shares went up as high as 10 per cent following the announcement.
Forecasts are also aligned with recent comments made by chief executive Luis Gallego.
The chief executive said last month all of IAG subsidiaries – including BA, Aer Lingus and Iberia – would post profit this year.
“We foresee all the airlines of the group to make profits again this year,” he told journalists late last month.
But according to analysts, forward bookings could come under pressure as the cost-of-living crisis bites into people’s pockets.
“This upgrade from expectations is a very welcome surprise, but whether the spritely mood music can be maintained is another question entirely,” said Sophie Lund-Yates, equity analyst at Hagreaves Lansdown.
Following two years plagued by significant pandemic-induced losses, IAG returned to black for the first time in July.
The company posted a €293m (£245m) operating profit for the period between April and June, up from a €967m loss reported during the same time last year.