British Airways and Aer Lingus owner sees earnings soar as fuel prices drop

It reported an operating profit for the first three months of the year of €68m (£58.5m), up from the €9m (£7.7m) reported this time last year.

Total revenues also jumped to €6.4bn (£5.5bn), up from €5.9 (£5.1bn) last year.

IAG said the improved profits and sales had been driven by stronger demand across its airlines, which also include Iberia and Vueling.

It highlighted demand for travel between major European cities, particularly for leisure, while business travel has recovered more slowly.

But conflict in the Middle East affected flying by most of its airlines to the region.

Fuel costs were about five per cet lower than the previous year, due to lower average prices and more efficient aircraft deliveries, IAG said.

But it still spent more on operating the business over the latest quarter because of the higher volume of flights.

It also said employee costs jumped by more than 14 per cent year-on-year, due to staff wages being pushed up and hiring more staff for a busy summer schedule.

Luis Gallego, IAG’s chief executive, 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.

"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.

"We are well-positioned for the summer. The high demand for travel is a continuing trend."

IAG also announced that it has increased capacity for the North Atlantic region by 0.6 per cent in the first quarter, with incremental growth at Aer Lingus, British Airways and Iberia.

Unit revenue increased by 6.5 per cent with “good demand” in both the business and leisure segments.

The Group said it had continued to invest in the “strongly growing” Latin America and Caribbean region, mainly through Iberia, but also adding capacity at British Airways and LEVEL, delivering overall capacity growth of 14.4 per cent in the first quarter.

Capacity growth to Europe for the firm was nine per cent in the first quarter, with growth in particular at Aer Lingus, British Airways and Iberia.

In Spain and the UK, capacity growth was 6.5 per cent in the first quarter, mostly in Spain through Iberia and Vueling.

Passenger revenue per available seat kilometre for the group in the first quarter was 4.4 per cent higher than in the first quarter of 2023.

IAG said this was benefited by the timing of Easter and a continued strong leisure traffic recovery.