British Airways owner IAG predicts summer boom as profits climb

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Winter holidaymakers flying to the Caribbean and a recovery in business travel helped British Airways owner International Airlines Group report a rise in first-quarter profit as it forecast another strong summer for the airline industry.

IAG said it had increased flights to “the strongly growing” Latin America and Caribbean region and that leisure travel demand “remains strong”.

BA rival Virgin Atlantic also highlighted strong bookings for winter breaks in the Caribbean when it reported results last month, as holidaymakers continued to pack airlines’ long-haul routes.

Corporate travel has been slower to rebound from the pandemic, but IAG said it “continued to recover” in the first quarter, after reaching 70 per cent of 2019 levels in 2023.

The company, which also owns Spain’s Iberia and Ireland’s Aer Lingus, reported operating profit before exceptional items of €68mn in the first three months of the year, beating analysts’ expectations and up from €9mn a year earlier.

IAG reported record profits last year and joined rivals Lufthansa and Air France-KLM in predicting another strong summer, as travellers brush off geopolitical fears and a weak economic backdrop.

“We are well-positioned for the summer. The high demand for travel is a continuing trend,” said IAG’s chief executive Luis Gallego.

IAG said that while demand for flying in Europe and across the Atlantic was booming, “the rest of the world is currently more challenging”. It noted the impact of the war in the Middle East in particular, and said revenues per passenger had declined on routes to Asia and Africa.

BA has typically been IAG’s profit engine, but its recovery has lagged behind other airlines in the business and it suffered operational problems at London Heathrow last year.

BA reported an operating profit of £22mn in the first quarter, compared with Iberia’s €70mn. Aer Lingus and Vueling, which are more reliant on summer leisure routes, were lossmaking.