BA owner IAG summer profit beats expectations, no weakness in forward bookings

BRITISH Airways (BA) owner IAG reported better than expected results for its key summer period due to strong demand and pricing and said that future bookings were not showing any signs of weakness, pushing its shares up as much as 10 per cent.

The company, which also operates the Iberia, Vueling and Aer Lingus airlines, said it expects pre-exceptional operating profit to be in the region of 1.2 billion euros (S$1.7 billion) for the three months ended Sep 30, compared with a loss during the pandemic last year.

European airline stocks have plunged over the last six months over worries that rising household bills will dampen appetite for travel, but IAG said it was confident on future demand.

“Forward bookings remain at expected levels for the time of year, with no indication of weakness, and accordingly our fourth quarter expectations remain unchanged as of today,” the group said in a statement.

Its shares jumped as much as 10 per cent to 109 pence after the unscheduled announcement, which was likely put out given that the third quarter outcome was materially higher than the consensus of 779 million euros.

The full results statement is due to be announced on Oct 28.

Analysts have noted that the strength of the US dollar against the pound and the euro lately has led to a pick-up in American visitors to Britain and Europe, helping IAG which has a large exposure to the transatlantic market. REUTERS