The owner of Aer Lingus and British Airways has seen its revenues recover to pre-pandemic levels and revealed it returned to profit in the third quarter.
International Consolidated Airlines Group (IAG) reported operating profits of €1.2 billion in the three months to September 30th, after it swung to a loss of €452 million last year.
The resurgence of leisure travel and steady recovery of business trips boosted sales, the FTSE 100-listed airline group said.
It took a heavy hit during the pandemic and was still loss-making earlier this year after the Omicron variant drastically reduced the number of passengers.
But the group reported strong passenger demand in its latest results and saw its revenues just overtake pre-pandemic levels by 0.9 per cent.
Its total revenue hit €7.3 billion, despite the recent disruption at London’s Heathrow airport and its network in Asia Pacific largely staying closed.
Although passenger capacity was still only 81 per cent this year on pre-pandemic levels.
And the group said that average spot prices of jet fuel almost doubled this year compared with last.
Prices shot up from March, when Russia’s war in Ukraine began and sparked rising costs for commodities around the world.
Furthermore, the airline group reported that it had been adversely impacted by fluctuations in foreign exchange rates with the US dollar strengthening 10 per cent against the euro and 7 per cent against the pound in the first nine months of 2022 compared to last year.
Considering the current higher fuel prices and exchange rates, IAG said it expects its full-year operating profits, before exceptional items, to be around €1.1 billion.
Aer Lingus’s third quarter results showed an operating profit of €139 million, after a loss of €95 million in the first six months of the year. However, the company's profit for the quarter was below the equivalent quarter in 2019.
The Irish airline said it was progressing with its North American expansion plans, growing the number of transatlantic routes from and through its Dublin hub.
Aer Lingus will operate 19 transatlantic routes in summer 2023, with Cleveland and Hartford, Connecticut added to the network.
Luis Gallego, IAG’s chief executive, said: “All our airlines were significantly profitable and we are continuing to see strong passenger demand while capacity and load factors recover.
“Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.
“While demand remains strong, we are conscious of the uncertainties in the economic outlook and the ongoing pressures on households.
“Against this backdrop, we are focused on adapting our operations to meet demand, strengthening our balance sheet by rebuilding our profitability and cashflows, and capitalising on our high level of liquidity.”
