- 1Q operating profit €68 million
- Fuel unit costs down 4.9%
- IAG shares up 18% this year
Shares in International Consolidated Airlines (IAG) were up 1.5p or 0.8% at 184p in morning trading as the British Airways owner said strong travel demand helped lift its results in the three months to 31 March 2024.
EARNINGS TOP FORECASTS
Total revenue for the three months to 31 March was €6.43 billion compared to €5.89 billion in the same year ago period.
Operating profit before exceptional items of €68 million for the first quarter of 2024 beat analysts’ forecasts of €49million, according to company-compiled consensus.
Fuel costs were down by nearly 5%, while non-fuel costs increased by 3.7% from a year earlier due to investments in the business and wage settlements agreed during 2023.
Luis Gallego, International Consolidated Airlines chief executive, said increased demand over the Easter holidays, transformation initiatives and strength in core markets buoyed revenue and operating profit.
The airline group, which also owns Iberia, Aer Lingus and Vueling, said it was ‘well-positioned for the summer’ with 7% capacity growth compared to the first quarter of 2023.
EXPERT VIEW
Buoyed by strong demand for travel across its airlines, IAG reported a notable increase in total revenue driven by higher passenger traffic and yields, said Neil Shah, director of content and strategy at Edison Group.
‘Particularly encouraging is the significant improvement in operating profit before exceptional items, soaring to €68 million from a mere €9 million in Q1 2023, boosted by heightened travel demand', said Shah.
‘Amidst the backdrop of favorable demand dynamics, IAG has strategically invested in its core markets, witnessing a 7% passenger capacity growth compared to Q1 2023. Notably, the company's balance sheet has strengthened, with net debt to EBITDA before exceptional items reducing to 1.3 times, reflecting strong profit and cash performance', added Shah.
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