British Airways owner IAG posts Q1 profit for first time since pandemic

Airline group boosted by strong customer demand

IAG, owner of British Airways, recorded profit amid fears Heathrow Airport will struggle with this summer's travel boom. PA

British Airways’ parent company returned to an operating profit in the January to March quarter for the first time since before the pandemic, the company announced on Friday.

International Consolidated Airlines Group (IAG) said its first quarter operating profit was £7.9 million ($9.9 million), up from a loss of £629 million in the same period last year.

Revenue reached £5.2 billion, a year-on-year increase of more than 71 per cent.

Fares were up by 10 per cent but fuel prices increased by about 35 per cent.

"In terms of fares, we've seen good yield increases for quarter one overall," chief financial officer Nicholas Cadbury said on Friday.

"We're not giving specific guidance for what that's looking like going forward because it's so early in the year but we are expecting yields to hold up in the short term."

IAG attributed the financial results to “ongoing strong customer demand across all our airlines”, which consist of Aer Lingus, British Airways, Iberia, Level and Vueling.

“IAG has delivered a strong first-quarter financial performance as group airlines recovered capacity to close to pre-pandemic levels," chief executive Luis Gallego said.

“Iberia contributed a record first-quarter profit and all our airlines performed above expectations, benefiting from robust demand and a lower fuel price in the quarter.

“We are seeing healthy forward bookings, with leisure demand particularly strong, while business travel continues to recover more slowly.”

Concerns Heathrow Airport will not cope with summer boom

Mr Gallego insisted IAG’s airlines have enough staff to cope with demand over the coming months but expressed anxiety over recruitment levels at London's Heathrow Airport.

“We are a little concerned about Heathrow because usually the forecast we have about the passengers that are going to fly during the summer is higher than what they think, so we are a little worried about that," he said.

“We hope they have the resources.”

He said he was “very worried” about further French air traffic control strikes, which affect many routes including to and from Heathrow.

The first three months of the year are usually the least profitable for airlines before the all-important summer season.

In Paris on Friday, Air France-KLM posted a smaller loss in the first quarter of 2023 compared with last year's figure.