IAG: 'Particularly Pleased' with Q3 North Atlantic Performance
British Airways parent International Airlines Group reported a strong third-quarter performance for its North Atlantic region, including increased revenue and capacity.
JaneWalter
International Airlines Group, which includes British Airways, Iberia, Aer Lingus and Vueling, reported a strong third-quarter performance for its North Atlantic region, including increased revenue and capacity.
"The third quarter saw a strong revenue performance against a strong prior year, reflecting the strength of our core markets and market positions and our customer proposition," IAG CFO Nicholas Cadbury said during a Friday earnings call. "We were particularly pleased with the performance across the North Atlantic, the group's largest market."
IAG increased North Atlantic capacity during the quarter by 3.9 percent year over year and reported that passenger revenue per available seat kilometer increased 3.5 percent, its highest performing geographical segment. The North Atlantic region accounted for 31.7 percent of the company's total capacity for the quarter, followed by Europe at 28.1 percent. The company increased European capacity by 5.3 percent versus Q3 2023, and its passenger revenue per ASK increased 1.4 percent, the only other region to report a year-over-year gain.
"British Airways performed particularly well with its premium cabins and in both its U.S. and U.K. point of sale, where Aer Lingus saw a negative impact from the pilot strike and U.S. competition [to Dublin], but improved as we went through the quarter," Cadbury said.
Business travel "continues to recover," but at different rates for the airlines and different regions, IAG CEO Luis Gallego said. He shared Q3 data for the segment that mostly matched second-quarter figures. British Airways' third-quarter volume from managed corporate travel was at around 65 percent of 2019 levels, with revenue around 80 percent. Iberia's volume was at 83 percent versus 2019, down slightly from Q2's 90 percent, with revenue at 105 percent.
"North America is working very well when we see the recovery of business demand," Gallego said. "Also, Europe. I think we are positive with the recovery, but it's going to take more time to arrive to 85 percent of volume that we said previously."
IAG Q3 Metrics
IAG reported total third-quarter revenue of more than €9.3 billion (US$9.9 billion), an increase of about 7.9 percent year over year. Passenger revenue was up 6.9 percent to €8.27 billion. Operating profit was €2 billion, up 15.4 percent compared with Q3 2023. Total Q3 capacity increased 5.7 percent year over year.
IAG projected a capacity increase of 5 percent year over year for the fourth quarter and about 6 percent for the full year. The company also expected its "strong financial performance to continue for the rest of the year."
