Anglo-Spanish company International Airlines Group (IAG) today presented its financial and operating results for the third quarter of 2022.
In a statement, the holding company, which owns British Airways, Iberia, Aer Lingus, Level and Vueling, said it achieved “a significant increase” in the profitability of all its airlines between July and September. It also highlighted that total capacity and occupancy rate continue to recover.
“In the third quarter of this year we again achieved solid results, with an operating profit of 1.2 billion euros and liquidity of more than 13 billion euros”, said Luis Gallego, the company’s CEO. “All our airlines were significantly profitable and we continue to see strong demand”, he added.
As is currently the case with other commercial carriers, demand in the leisure segment is particularly strong and corresponding revenues are already back to pre-pandemic average levels. On the other hand, business passenger traffic continues to recover.
IAG third quarter 2022 key financial and operating results
- Total revenues amounted to 7.329 million euros, 0.9% higher than during the same period of 2019, despite constraints at London Heathrow Airport (British Airways’ main hub) and on some routes in the Asia-Pacific region.
- Operating profit reached 1.208 million euros. In the third quarter of 2021, IAG had reported operating losses of 452 million. Between January and September 2022, operating profit reached 770 million euros. In the first nine months of last year, the company had reported losses of 2.4 billion.
- Total capacity of IAG airlines already reached 81.1% of 2019 figures. In European markets, 91% of the capacity recorded in the last year before the start of the pandemic has already been recovered. The trend is repeated in North America (92% recovery) and Latin America (75% recovery).
- Although capacity has not yet fully recovered, revenue from leisure travellers has already reached that of 2019. Revenue from business travellers has already reached 75% recovery.
- The occupancy factor was 87%, only 0.7 percentage points lower than reported in the same period of 2019.
- Unit costs, excluding fuel, increased by 25.5% compared to the the third quarter of 2019. Lower operated capacity, the adverse effect of the foreign currency exchange rate and inflation influenced this result.
- In the first nine months of the year, cargo revenues increased by 42 million euros, to 1.2 billion. The figure represents an increase of 3.6% compared to the same period in 2021, despite only 480 air cargo flights being operated between January and September 2022.
- Net debt at 30 September 2022 was 11.058 million euros, representing a reduction of 609 million compared to the debt recorded at the end of 2021.
Third quarter balances and projections for the last three months of the year
As reported by IAG, the company forecasts that in the last quarter of this year the global passenger capacity of its airlines will reach 87% compared to the same period in 2019. In that case, total capacity recovery would reach 78% during 2022.
“While demand levels remain strong, we are aware of the economic uncertainties and pressure on domestic consumption”, commented Luis Gallego on the current situation and the near future. “In this context, we are focused on adapting our operations to meet demand, strengthening our balance sheet by rebuilding our profitability and cash flow, as well as leveraging our high liquidity”, he explained.
“This will allow us to allocate capital and invest in a disciplined way in our services and our employees to increase our capacity and enable future growth”, he added.
By the first quarter of 2023, the company expects capacity to stand at around 95% of that available in 2019.
“As we rebuild our operational resilience, we are confident in our strengths as a Group”, said Gallego. In that sense, he highlighted the valuation of the company’s different brands, in addition to IAG’s leading position in several of its markets and main hubs.
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