International Airlines Group (IAG), which includes well-known airlines such as British Airways, Iberia, Vueling and Aer Lingus, has reported a strong increase in quarterly profit in the third quarter of 2024.
Operating profit rose by 15 percent compared to the previous year and significantly exceeded analysts’ expectations. These positive results underline the strong demand in air travel, send momentum to key transatlantic routes and provide an optimistic view of the future development of the aviation industry.
Successful balance sheet thanks to high demand and more efficient cost control
In the third quarter, IAG achieved an operating profit of two billion euros, above the consensus forecast of 1.78 billion euros. These figures reflect the strong demand experienced by all airlines within the IAG Group, particularly on the transatlantic routes, which have traditionally been among the most lucrative. The routes between London and the USA were particularly busy, resulting in a four percent increase in capacity on these North Atlantic routes. The group was also able to expand its offering on the South Atlantic routes.
IAG CEO Luis Gallego emphasizes that demand remains high in all of the company’s key markets, particularly on transatlantic and intra-European routes. For the full year, IAG expects an operating profit of around 3.7 billion euros, an increase compared to the previous year, when profit was 3.5 billion euros.
Another positive aspect was the significant growth in the cargo sector. Revenue from the freight business increased compared to the same period last year and made a significant contribution to the overall result. Combined with high ticket prices, low fuel costs and a strong focus on efficiency and cost control, IAG was able to offset increased labor costs and achieve success.
Looking to the future: Little capacity expansion and optimistic prospects
Despite these encouraging figures, IAG has slightly adjusted its expectations regarding capacity expansion for the year as a whole. Instead of an increase in capacity of seven percent as originally planned, an increase of only six percent is now expected. This adjustment is related to the ongoing uncertainties in some global markets, particularly with regard to the geopolitical situation and the challenging situation on Asian routes.
IAG has decided to expand its activities in Asia less intensively, particularly due to competition from Chinese airlines that can use Russian airspace for shorter flights and thus gain competitive advantages. This decision demonstrates IAG’s strategic direction to continue to focus on the lucrative and high-demand transatlantic and European routes.
Financial stability and share buybacks
The positive results and strong market performance lead to a significant increase in IAG’s share price, which increased by six percent, reaching levels last seen in March 2020. The stock has already risen an impressive 50 percent this year, which has increased confidence in the company’s long-term development.
As a further signal of financial strength, IAG announced a share buyback worth 350 million euros. A majority of this amount will be used to purchase shares in the market, while the remainder will be used to purchase shares currently held by Qatar Airways. This decision is intended not only to increase value for shareholders, but also to further strengthen the strategic partnership between IAG and Qatar Airways.
IAG on course for further growth
With a quarterly profit that exceeded expectations and a solid balance sheet, IAG impressively shows that the company is well positioned to benefit from passengers’ strong desire to travel in the coming years.
The focus is particularly on the lucrative transatlantic routes and the continuous improvement of efficiency is paying off. The slight adjustments in capacity planning and the cautious strategy on international markets such as Asia underline the company’s forward-looking orientation. With a solid financial foundation and strong market performance, IAG is optimistic about the future.
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