British Airways owner IAG reported a record €3.5m (£3bn) operating profit in its full-year results this morning after travel demand boomed in 2023.
The number was nearly triple last years’ €1.25m and ahead of a 2019 pre-pandemic figure of €3.3m. Revenues soared by over a quarter (27.7 per cent) to €29.5.
The airline conglomerate, which owns British Airways, Iberia, Aer Lingus, Vueling and Level, said that demand continued to be “robust,” with particular strength in leisure travel looking ahead to 2024.
“We are currently 92 per cent booked for Q1 2024 and 62 per cent booked for H1 2024*, ahead of our position last year,” the group said in a statement on the London Stock Exchange.
Luis Gallego, IAG Chief Executive Officer, said: “In 2023, IAG more than doubled its operating margin and profits compared to 2022, generated excellent free cash flow and strengthened its balance sheet position, recovering capacity to close to pre-COVID-19 levels in most of its core markets.
“Our airlines operate in the largest and most attractive markets globally and we will continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.
“I would like to thank all of the teams across the Group for their continued hard work and dedication to delivering our transformation plan.”
The firm operates Vueling as well as British Airways. The profit figure came despite a year marred by disruption in global airspace.
Airlines have also grappled with rising fuel costs and supply chain issues and delivery delays at the world’s two biggest planemakers, Boeing and Airbus.
Shares in British airways parent company have fallen around 10 per cent in the last 12 months with investors concerned it is losing out to its budget rivals.
Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown: “British Airways is charting a robust course, as it rides the tailwinds of strong leisure demand.
“Consumers are continuing to prioritise travel, and that’s translating to longer-haul trips. Rolls Royce’s blockbuster results were an indication that so-called wide-body travel was in for a strong end to the financial year. IAG has put a lot of work into honing its routes, focusing its capacity growth on north and south Atlantic markets.
She added: “There are challenges to overcome though. The group’s set to spend big on its transformation overhaul, which includes leveraging data and technology to improve the customer experience. Many frequent users of ba.com will cheer the news that the website’s getting some much-needed TLC, but IAG is also hoping to boost efficiency by reducing disruption. These are all great targets, but the pace of delivery is far from guaranteed.
“It’s crucial that BA gets this right.”