International Consolidated Airlines Group (LSE: IAG) is gearing up for a strong summer season after reporting improved Q1 results.
The British Airways owner narrowed its pretax loss to €87 million, down from €121 million a year earlier, as operating profit multiplied to €68 million from just €9 million previously.
The positive figures were driven by a 9.2% jump in total revenue to €6.43 billion, compared to €5.89 billion in Q1 2022. IAG cited the well-timed Easter holidays as a key factor fuelling the surge, with leisure travellers leading the recovery while business traffic lagged behind.
Passenger revenue per available seat kilometre (PASK) climbed 4.4% year-on-year, reflecting the robust appetite for holiday travel. However, IAG faced higher non-fuel costs, up 3.7%, due to investments and wage settlements, though fuel expenses dropped 4.9% aided by new efficient aircraft.
IAG’s net debt position strengthened, decreasing from €9.25 billion to €7.44 billion over the past year as the group recovered from pandemic disruptions.
Chief Executive Luis Gallego highlighted the positive impact of IAG’s “transformation initiatives” combined with resurgent demand over Easter, delivering “improvements to both revenue and operating profit.”
Looking ahead, IAG is boosting capacity to meet anticipated summer demand, with a planned 7% increase in average seat kilometres versus 2022 levels. Growth was sharpest for Latin American & Caribbean routes at 14%, followed by a 9% capacity rise across Europe.
However, Africa, Middle East & South Asia routes saw muted 0.4% growth, with revenues down 3.4% due to conflicts impacting regional flying.
Despite the challenges, IAG expressed confidence in “positive long-term, sustainable demand for travel” as it continues investing for future growth.
Shares in IAG rose 1.1% early Friday. The stock is up 18% year to date.
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