IAG reported a return to profit on Friday following a strong recovery in demand across all its airlines.
The airline company reported an operating profit for the second quarter of €293 million, compared to an operating loss of €967 million in 2021. Therefore, the company also reported a profit after tax and exceptional items of €133 million, compared to a loss of €981 million the year before.
The company reported a return to profit in the second quarter despite cancelling tens of thousands of flights this summer. This is the first time the company has reported a quarter of profit since pre-pandemic.
IAG shareholders are smiling.
However, the company still reported an operating loss for the half year at €438 million. However, this significantly declined from €2.05 billion in the prior year.
Passenger capacity in Q2 was at 78% of 2019 levels, up from 65% in Q1.
“In the second quarter we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines,” said Luis Gallego, IAG CEO.
Gallego continued, “This result supports our outlook for a full year operating profit.”
Finally, the trading outlook for IAG includes operating profit to be significantly improved in the third quarter compared to the second quarter. In addition, the outlook is based on no further setbacks related to Covid-19 and government restrictions.
I think we’re all hoping for no major Covid related news anymore.
Google trends shows a common theme across IAG’s airlines in 2022. British Airways, Aer Lingus and Iberia have all seen spikes in interest in recent periods. And with IAG shares falling almost 15% this year, its shares may be undervalued.