23 February 2024 , 15:45
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The company that owns British Airways, International Airlines Group (IAG), is expected to announce a record-breaking year of sales.
Despite worries about the UK's recent recession affecting holiday bookings, IAG, which also owns Iberia, Vueling and Aer Lingus, is set to reveal its 2023 financial results on Thursday. The airline giant is predicted to report nearly 30 billion euros (£25 billion) in sales, which is more than a quarter higher than the previous year.
This follows a record profit for IAG during the summer months last year, thanks to a surge in holiday travel. The company saw a particularly high demand for flights across the Atlantic and to top European holiday spots.
Experts predict an underlying operating profit of around 3.5 billion euros (£3 billion) for the full year, beating its previous best in 2018. Analysts at AJ Bell suggest these impressive profits could be achieved despite challenges such as labour disputes, geopolitical uncertainty, and the potential impact of the UK's economic downturn on air travel.
Official numbers show that the UK ended up in a technical recession at the end of the year. This means there were two quarters in a row where the economy didn't grow. Big travel companies like Jet2 and Tui have said recently that people are still making sure they go on their well-deserved holidays abroad.
Britain faces the worst recession among G7 partners, economists predict
This is even though the cost of living crisis is making things more expensive for them. Investors might be hoping to hear the same kind of thing from IAG.
They'll especially want to know that IAG's bookings are doing well compared to cheaper competitors like easyJet, Ryanair, and Wizz Air. Experts at AJ Bell also highlighted that higher oil prices and staff costs could be issues. Another potential problem is airlines adding more seats on their flights. This could mean more competition on popular routes.