British Airways bounces back as owner sees record earnings

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The owner of British Airways has hit record annual earnings after cashing in on the bounce back in world journey demand.

The group – which additionally owns airways Iberia, Vueling and Aer Lingus – stated demand continues to be sturdy, significantly from leisure travellers, with the group’s airways 92% booked for the primary quarter of the yr and 62% booked up for the primary half.

International Airlines Group (IAG) reported underlying working income of three.5 billion euros (£3 billion) for 2023, practically 3 times the 1.3 billion euros (£1.1 billion) in 2022 and better than its pre-pandemic peak.

Its outcomes confirmed that pre-tax income for the yr jumped to three.1 billion euros (£2.7 billion) from 415 million euros (£355 million) in 2022 on revenues up 27.7% at 29.5 billion euros (£x billion).

In the fourth quarter, underlying earnings lifted 5% to 502 million euros.

Luis Gallego, IAG chief govt, stated: “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.”

The group stated capability for the ultimate three months of 2023 was at 98.6% of the degrees seen earlier than the pandemic struck in 2019, with full-year capability at 95.7% of these ranges.

At BA, capability recovered extra slowly to 90.1% of 2019 ranges, largely as a result of slower rebound in Asia Pacific.

The group stated it expects to develop total capability by round 7% in 2024.

But shares within the group fell 2% in morning buying and selling on Thursday.

Mr Gallego shrugged off the impression of a recession within the UK on demand, saying it “continues to be very strong, particularly in leisure”.

“We don’t see any weakness in the market,” he added.

He remained tight-lipped on the outlook for air fares this yr, saying solely that they might be “determined by the market”.

The group stated company passenger demand in North America was impacted on the finish of final yr and into the primary quarter of 2024 by the Gaza battle and considerations over instability within the Middle East.

But he stated demand within the US market was exhibiting indicators of restoration within the second and third quarters.

He added that punctuality was enhancing at BA, with ranges in January near the place they have been earlier than Covid.

It is investing closely in its operations at Heathrow after service was hampered lately by disruption and air visitors management (ATC) issues.

The group is spending £7 billion total on BA over the following three years – on areas such as IT and new aircrafts.

“British Airways is our biggest asset with huge potential and that’s the reason we are investing,” Mr Gallego stated.