International Consolidated Airways (IAG) has reported strong financial results for the first quarter of the year, with robust travel spending from both holidaymakers and business travelers. The British Airways owner saw its share price rise by 1.1% to 184.9p per share in Friday trading, and its revenues increased by 9.2% to €6.4 billion. Passenger revenues also showed a significant jump of 11.7% to €5.6 billion, while cargo revenues experienced a slight dip of 12.4% year on year to €283 million.
During the first quarter, IAG carried 26.4 million passengers, marking an 8.6% year-on-year increase. The firm’s load factor also improved from 81.5% to 83.1%, indicating strong performance. Operating profit rose to €68 million from €9 million in the same period last year, largely due to lower fuel-related expenses. However, staff costs increased by 14.3% in the quarter. IAG’s net debt decreased to €7.4 billion by the end of March, resulting in a 40-basis-point fall in the firm’s net debt to EBITDA ratio to 1.3 times.
IAG credited the increase in revenues and operating profit to its transformation initiatives and high demand, particularly over the Easter holidays. CEO Luis Gallego praised the strength of the company’s core markets, including North Atlantic, South Atlantic, and intra-Europe, as well as the performance of its brands. He expressed confidence in IAG’s positioning for the summer, noting the continued high demand for travel. Analyst Javier Molina from eToro highlighted IAG’s ability to enhance profitability and operational efficiency post-COVID, emphasizing its transformation initiatives and strengths in key markets.
Analyst Derren Nathan of Hargreaves Lansdown commended IAG’s impressive start to the year, noting the positive impact of the Easter break and the sustained demand for leisure travel. While no specific forward guidance was provided, IAG’s outlook appeared confident, with a focus on the upcoming summer season. The company’s strong start to the year is seen as a testament to its resilience and ability to capitalize on market opportunities. With the worst of the pandemic’s impact behind it, IAG is well-positioned to continue its positive momentum and drive further growth in the coming quarters.
