IAG increases revenues by 9%, but does not avoid red numbers in the first quarter
Aviation group IAG, which owns airlines such as Iberia and Vueling, ended its first quarter of the year – traditionally its weakest – with a significant improvement in its earnings, allowing it to trim normal losses for the period but falling short of profitability. In particular, its turnover amounted to 6.429 million euros, which is 9% more than in 2023, when sales amounted to 5.889 million.
However, The after-tax result was -4 million euros.a figure that significantly reduces the losses of the previous year, when 87 million were registered in red and brings the airline holding closer to profitability in the worst months of its operations. This is reflected in operating profit, which increased from 9 to 68 million euros compared to the first quarter of 2023, an increase of almost seven times.
The group, led by Luis Gallego, attributes these circumstances to strong travel demand across all its airlines, which “led to increased revenues, positive unit income and increased operating profit.”
During the first three months of the year, including the Easter holidays, IAG increased capacity by 7% compared to the same period last year, mainly due to the restoration of British Airways routes. Passenger seat/km revenue grew 4.4% in these months, driven by the leisure segment.
For airlines, the contribution of each to improving operating results is practically determined by the expression Vueling, which has a profit of 39 million euros.. British Airways 9 after increasing occupancy by more than two points; Iberia earned 4 million, helped by higher revenue per passenger from the addition of six aircraft to North and South America; and Aer Lingus contributed another million euros.
Specific, Iberia has carried more than 6 million passengers, 9.5% more; and achieved an occupancy rate of 85.5% on its aircraft. In its turn, Vueling also increased its passenger numbers by 7.4%., to 7.77 million, with occupancy increasing to 91%. Level, the group’s low-cost airline, increased its passenger numbers by 7.4% to 140,000 thanks to planes that were even more completeuntil it reaches 95% of its capacity.
For our part, the loyalty program Loyalty to IAG This brought in 12 million in profit, and Gallego “continues to get very good results.” For this reason, the group integrated its British Airways Holidays program into this program on 1 April.
By segment, revenue from passenger traffic increased by 11.7% to 5.632 million euros, or 591 million more; cargo transportation fell 12.4% to 283; and the rest of the company’s revenue fell 2.1% to 514. IAG attributes the drop in freight traffic to increased passenger capacity and high prices during the first three months of 2023.
Top manager of the company believes they are “well prepared for summer” as “strong travel demand continues to be a strong trend.” It maintains its expectations for the remainder of the year, including spending that continues to be “in line with expectations.” These included an increase in personnel costs and investment costs, which led to an increase in the cost item by 3.7%, while fuel costs decreased by 4.9%.
Strong cash generation increased the company’s cash flow by more than 27%, increasing from 6,837 million to 8,726 million. Net debt has now fallen to 7.438 million euros, down 860 million from last year.
Looking ahead to the coming months, the holding company confident that travel demand will remain “robust and positive” in the long termunderlines its good position for the summer season and will maintain capacity growth of approximately 7%.