IAG: Corp. Travel Recovery Helps Drive Q2 Profit

British Airways parent International Airlines Group on Friday reported a profitable second quarter, its first such quarter since the pandemic started. Business travel continues to recover, executives said. 

The results represent “a strong recovery in demand across all our airlines,” IAG CEO Luis Gallego said in a statement. IAG is the parent company of Iberia and Aer Lingus along with BA. “Premium leisure remains strong, while business travel continues a steady recovery in all airlines.” 

Business channel bookings are about 60 percent recovered in terms of volume and 70 percent in terms of revenue. The company currently does not see any signs of weakness in demand, Gallego said on a Friday earnings call.

IAG’s operating profit for the second quarter was €293 million (US$299 million) on total revenue of €5.92 billion, compared with a Q2 2019 profit of €951 million on revenue of €6.73 billion. Q2 2022 passenger revenue was €4.95 billion, about 17 percent below the same quarter for 2019.

Capacity was 78 percent of 2019 levels during the quarter, compared with 65 percent in the first quarter, driven by IAG’s key regions of European short-haul, North America and Latin America and the Caribbean, according to the company.

IAG anticipates capacity to be about 80 percent of 2019 levels in the third quarter, and 85 percent for the fourth quarter, which are both lower than previous guidance, mainly due to the “challenges at Heathrow.” That airport was beset during the quarter by delays, cancellations and luggage-handling woes among other challenges, and instituted a summertime passenger capacity cap to help manage them. 

IAG’s 2022 capacity is expected to be 78 percent. The company also expects to be profitable for the full year.

British Airways’ quarterly income was €54 million on revenue of €2.74 billion. Passenger revenue was €2.28 billion, down about 27 percent compared with 2019. Aer Lingus’ income was €15 million on revenue of €475 million. Passenger revenue was €452 million, down about 23 percent from 2019. Iberia reported a profit of €93 million on revenue of €1.38 billion. Passenger revenue was €976 million, down only 4 percent from 2019 levels.

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