British Airways Parent Company Soars with Record £1.1Bn Profit
With passenger numbers approaching pre-pandemic levels, IAG announced record-breaking profits of around $1.42 billion for the first six months of 2023
The parent company of British Airways, International Airlines Group (IAG), has announced a record profit of £1.1 billion ($1.42 billion) for the first half of 2023. This is a positive sign that the global airline industry is continuing to recover from the effects of the pandemic.
IAG, which also owns Spanish flag carrier Iberia, Irish flag carrier Aer Lingus, and low-cost carrier Vueling, posted its first half-year results for 2023, and its £1.1 billion profit represents a vast improvement on the £383 million ($492.6 million) loss reported over the same six month period last year.
Its total revenue for the first six months of 2023 was £11.7 billion ($15 billion)—a 45% year-on-year rise. IAG said that capacity across all of its airlines is currently at around 94% of pre-pandemic levels, with profits being boosted by the fact that fares have increased by an average of 9.5% compared to fuel price increases of just 5.7%. It also added that it aims to reach pre-pandemic passenger levels by the end of this year.
According to the report, the record profits have helped IAG to reduce its net debt by around 27%, from £8.92 billion ($11.47 billion) at the end of December 2022 to £6.52 billion ($8.39 billion) by the end of June 2023.
Leisure Market Booming
Luis Gallego, the CEO of IAG, attributed much of the rebounding passenger demand to the leisure travel sector while promising to reinvest the profits into improving the service for its customers.
“Our strong profits since the start of the year are helping to fund investment for our customers and to improve our balance sheet by reducing debt,” said Gallego. “We are aiming to be back to pre-pandemic capacity at the end of this year.
“These results are thanks to a strong performance from all companies across the Group, and we would like to thank our teams for their hard work during the year so far. Customer demand remains strong across the Group, particularly for leisure travel, with around 80% of passenger revenue for the third quarter already booked. And our airlines have put in place plans to support operations during the busy summer period.”
However, IAG did admit that its airlines face significant operational challenges in the coming months due to air traffic control strikes in France and ongoing global supply chain issues, among other factors.
IAG is not the only airline company to post record profits in recent weeks and months. Singapore Airlines posted record profits in the twelve months to April 2023, while Emirates posted record-high profits, and Qatar Airways recorded its highest-ever revenue over the same period.
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