British Airways owner IAG's profits soar to £3bn, higher than pre-pandemic peak

29 February 2024 , 08:55

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IAG, which also has other airlines like Iberia and Aer Lingus, said demand for flights is strong (Image: PA Wire/PA Images)

The company that owns British Airways is flying high with the biggest earnings ever because more people are travelling again.

International Airlines Group (IAG) made a huge profit of 3.5 billion euros last year. IAG, which also has other airlines like Iberia and Aer Lingus, said demand for flights is strong.

They're almost full for early this year and over half booked for the first six months. Revenues were growing before paying taxes, about 3. 1 billion euros, and their sales went up by nearly 28%.

Luis Gallego, the boss of IAG, said: "In 2023, IAG more than doubled its operating margin and profits compared to 2022... recovering capacity to close to pre-Covid 19 levels in most of its core markets."

They flew almost as many planes at the end of last year as they did before Covid-19. For the whole year, they were really close to old times too. But British Airways didn't add more flights as quickly, especially to places in Asia Pacific. The group is looking forward to a 7% growth in capacity for 2024.

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However, the company's shares dropped by 2% when markets opened on Thursday. Mr Gallego isn't worried about a UK recession affecting people wanting to fly, as he says demand "continues to be very strong, particularly in leisure".

"We don't see any weakness in the market," he said confidently. He didn't say much about what will happen to air fares this year, only that prices will be "determined by the market". Towards the end of last year and into early 2024, the group noticed fewer business travellers from North America because of the Gaza conflict and worries about the Middle East being unstable.

But now, there are signs that more people from the US want to fly in the second and third quarters. Mr Gallego also mentioned that British Airways is getting better at being on time, with January's punctuality almost back to pre-Covid levels.

They're have addressed problems at Heathrow Airport after some problems with delays and air traffic control (ATC) issues. Over the next three years, they're spending £7 billion on British Airways, which includes new technology and planes. "British Airways is our biggest asset with huge potential and that's the reason we are investing," explained Mr Gallego.

Lawrence Matheson