IAG Airlines Post Positive Q1 Results

The International Airlines Group (IAG) has reported a significant increase in operating profit for the first quarter of the year (Q1 2024). The consortium that includes British Airways (BA), Iberia, Vueling, Aer Lingus, and LEVEL posted a €68 million ($73 million) profit up from €9 million ($9.71 million) in Q1 2023.  Luis Gallego, IAG Chief Executive Officer, said: “Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvements to both revenue and operating profit.”

With limited exposure to the Middle East and slow-recovering countries in the Asian market, IAG airlines performed better than some of its long-haul competitors. Reuters reported that Air France-KLM and the Lufthansa Group published first-quarter earnings below expectations. Gallego stated: “Our Group benefits from the strength of our core markets – North Atlantic, South Atlantic and intra-Europe – and the performance of our brands. Investment across the Group in transformation is delivering encouraging improvements in punctuality and customer experience at our airlines. IAG Loyalty continues to perform very well.”

Continued Latin American Growth

The Latin American and Caribbean regions were areas where IAG considerably increased capacity, up 14 percent. The majority of that capacity, measured in Available Seat Kilometers (ASKs), was serviced by Iberia, though LEVEL and British Airways also contributed. The regions accounted for 21.6 percent of IAGs ASKs for the quarter, third behind the North Atlantic (28.7 percent) and Europe (23.6 percent).

IAG classifies the United Kingdom and Spanish markets as ‘Domestic’ and together it accounted for 8.3 percent of the group’s capacity for Q1 2024. Though from a ‘passenger revenue per ASK’ metric, the ‘Domestic’ network gave the group its highest unit revenue increase at 6.9 percent for the quarter. The North Atlantic network had the second-highest gain at 6.5 percent benefitting from the strong premium traffic and an overall positive demand. Overall passenger capacity for the group was up 7 percent with passenger revenue scoring an increase of 11.7 percent vs Q1 2023.

With the early Easter period already contributing to the Q1 2024 results, IAG was looking forward to the upcoming northern summer season. For the group this is shaping up to be a solid one, barring any escalations in international crises or unforeseen events. Reuters reports Gallego mentioning on the earnings call that IAG ‘had already secured more than 80% of projected bookings for the second quarter and over 40% for the third quarter.’

In related news, British Airways Holidays released the results of a ‘Travel Trends Report’ this week that highlighted the way in which Brits are looking to travel. Of particular note was the increase in searches for packages in May and June as compared to the peak July/August period. According to the data, searches for the earlier months were double that of the traditional peak. Perhaps skewing the results for this year may be cost-savvy travelers looking to vacation earlier to avoid the Euros football tournament in Germany and the Paris Olympics.

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John Flett

John has always had a passion for aviation and through a career with Air New Zealand has gained a strong understanding of aviation operations and the strategic nature of the industry.

During his career with the airline, John held multiple leadership roles and was involved in projects such as the introduction of both the 777-200 and -300 type aircraft and the development of the IFE for the 777-300. He was also part of a small team that created and published the internal communications magazines for Air New Zealand’s pilots, cabin crew and ground staff, balancing a mix of corporate and social content.

John is educated to postgraduate level achieving a Masters degree with Distinction in Airline and Airport Management. He has been the course director of an undergraduate commercial pilot training programme at a leading London university and a member of Heathrow Community Trust’s ‘Communities for Tomorrow’ panel.

John is currently living in Canada and is contracted as an external instructor for aviation-related organizations.

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