- IAG says full-year profit is expected to be above the previously guided range
- Strong demand across all airlines and regions with 80% of expected Q2 revenue now booked
- Net debt at the end of the year to be better than previous guidance
British Airways owner IAG (LON: IAG) continued the theme of strong travel demand in Europe, stating in its first-quarter results that it expects full-year 2023 operating profit before exceptional items to be above the top end of its previous guidance.
The carrier, which also owns airlines Iberia, Vueling, and Aer Lingus, revealed strong demand across all airlines and regions means it expects to report operating profit before exceptional items above its previously guided range of €1.8 billion to €2.3 billion.
Despite ongoing economic concerns and inflation in the UK and Europe remaining elevated, travel demand is surprisingly resilient.
IAG’s results and outlook are in line with other airlines in the region, with easyJet and Ryanair previously stating that the consumer appetite for travel is robust as they prioritise travel spending.
IAG’s “encouraging” outlook for the summer has seen 80% of its expected second-quarter revenue now booked, with leisure demand a key driver, while capacity in its Latin America and North Atlantic markets are now back at pre-pandemic levels.
Meanwhile, IAG posted a first-quarter profit for the first time since Q1 2019. The airline group’s operating profit before exceptional items was €9 million, driven by ongoing strong customer demand and a lower fuel price.
Revenue for the quarter came in at €5.89 billion, up 71.4% compared to Q1 2022.
IAG also revealed that it expects net debt at the end of the year to be better than previous guidance of materially flat year on year and to be down in line with its profit outperformance.
“We are seeing healthy forward bookings with leisure demand particularly strong while business travel continues to recover more slowly,” said Luis Gallego, IAG Chief Executive Officer.
By Sam Boughedda
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