BA owner IAG lands record profits as travel sector rebounds

iag-british-airways

Airline operator IAG, which owns brands such as British Airways and Iberia has reported a full year operating profit of €3.5 billion as leisure travel returns to strength in the wake of the global pandemic.

IAG cruises back to growth

Total revenue for the year came in at €29.4bn, the company said, as it restored 95.7% of 2019 capacity, measured in available seat kilometres (ASKs), with the 4th quarter at 98.6% of 2019.

Pretax profits came in at just over €3bn, however, long-suffering nvestors, who may have thought the airlines operator would also be a dividend bonus, were left disappointed, as the airline made no allowance for this in its full year statement.

The airline stopped paying dividends during the pandemic.

Brand & marketing spend

IAG also said its brand and marketing spend for the year increased by €80m, from €267m to €347m.

In its outlook, IAG noted that: “Demand continues to be robust, with particular strength in leisure travel”.

It added that it was already 92% booked for Q1 2024 and 62% booked for H1 2024, which puts it ahead of its position for the same time last year.

Luis Gallego, IAG Chief Executive Officer, said: “In 2023, IAG more than doubled its operating margin and profits compared to 2022, generated excellent free cash flow and strengthened its balance sheet position, recovering capacity to close to pre-COVID-19 levels in most of its core markets.

“In 2024, we will execute on our strategy, building long-term value into the business. We will focus on strengthening our core airline businesses and on developing IAG Loyalty and our other asset-light growth opportunities, and we will do this while operating under a strong financial and sustainability framework.

“Our airlines operate in the largest and most attractive markets globally and we will continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.

“I would like to thank all of the teams across the Group for their continued hard work and dedication to delivering our transformation plan.”

IAG’s shares in London were trading 1.5% lower at £1.50 per share following its full year results.