British Airways’ parent company returns to quarterly operating profit for first time since before pandemic

Revenue reached 5.9 billion euros (£5.2bn), an increase of more than 71 per cent year-on-year.

IAG attributed the financial results to “ongoing strong customer demand across all our airlines”, which consist of Aer Lingus, British Airways, Iberia, Level and Vueling.

Luis Gallego, IAG Chief Executive Officer, said: “IAG has delivered a strong first quarter financial performance, as group airlines recovered capacity to close to pre-pandemic levels. Iberia contributed a record first quarter profit and all our airlines performed above expectations, benefiting from robust demand and a lower fuel price in the quarter.

"We are seeing healthy forward bookings with leisure demand particularly strong while business travel continues to recover more slowly. As we return to more normal operations, we continue to invest in sustainability, including more fuel-efficient aircraft, and in customer experience, updating the business cabins for British Airways and Iberia.

“Over the past year we have recruited thousands of new employees across the group and strengthened our operations so that we are ready to deliver for our customers during the summer peak.

“We have the right model to succeed with synergies and efficiencies across the group and I want to thank all our employees for the role they have played in our continued recovery.”

In a statement to accompany the results, IAG said a stronger performance than expected had been recorded at every airline, supported by more “good progress” at IAG Loyalty. It said this outperformance was mainly driven by leisure demand in both long-haul and short-haul.

The statement added: “Aer Lingus is more seasonally exposed than the other airlines, but is seeing good demand to European leisure destinations as well as to the US and the Caribbean. Short-haul business is seeing some softness, as are technology industry-related routes.

"British Airways returned to profit in quarter one for the first time since quarter one, 2019. We are seeing strong demand from leisure travel to most parts of the network. Corporate travel is recovering slowly. The change in the non-premium mix of seats in the long-haul fleet also has a negative impact on unit revenue.

"Particularly strong demand in Spain and Latin America, as well as on routes to the USA, has delivered Iberia’s best-ever quarter one performance and made it one of the world’s most profitable airlines in quarter one, 2023. Business demand is recovering slightly faster than in other airlines.”

Richard Hunter, Head of Markets at interactive investor, commented “Even though the British Airways owner has flown back to profit for the first quarter since 2019, the numbers underline that full recovery remains a long-haul journey.

"The improvement in the group’s fortunes is a welcome development as evidenced by the initial price reaction to the release, but the road to recovery remains long and arduous. Strong demand and a slightly lower fuel price in this quarter are helpful, but do not necessarily establish a trend.”