British Airways’ owner IAG commits to investing record profit of £1.1bn
The parent company of British Airways made a record operating profit between January and June, it has announced.
International Consolidated Airlines Group (IAG) said its operating profit in the first half of 2023 reached 1.3 billion euros (£1.1 billion), up from a loss of 446 million euros (£383 million) in the same period last year.
Revenue reached 13.6 billion euros (£11.7 billion), an increase of nearly 45% year-on-year.
Fares were up by an average of around 9.5%, while fuel prices increased by 5.7%.
IAG said the capacity of its flights has been restored to 94% of pre-pandemic levels.
It attributed this to a “strong leisure traffic recovery”, noting the premium leisure segment “continued to perform very well”.
IAG chief executive Luis Gallego said: “Our strong profits since the start of the year are helping to fund investment for our customers, and to improve our balance sheet by reducing debt.
“We are aiming to be back to pre-pandemic capacity at the end of this year.
“These results are thanks to a strong performance from all companies across the group, and we would like to thank our teams for their hard work during the year so far.
“Customer demand remains strong across the group, particularly for leisure travel, with around 80% of passenger revenue for the third quarter already booked.
“And our airlines have put in place plans to support operations during the busy summer period.”
Asked about fares, Mr Gallego said IAG expects its revenue to be “even better” between July and September.
He said: “We don’t see any sign of a slowdown in the demand.
“I think that the performance of the group is going to continue in the way that you see now.”
IAG acknowledged that “some of our operations are not where we would want them to be and this is affecting our overall customer service”.
It said French air traffic control strikes are affecting most of its airlines – which consist of Aer Lingus, British Airways, Iberia, Level and Vueling – while global supply chain issues are “reducing aircraft availability”.
The company said British Airways is “particularly affected” due to its “London exposure and complex schedule”.
IAG said it has responded to the challenges by recruiting 4,000 people in the first half of the year with a “particular focus on ground operations” and is leasing eight aircraft with crew from other airlines.
Press Association – Neil Lancefield