The International Airlines Group (IAG), which includes well-known airlines such as British Airways, Iberia, Vueling and Aer Lingus, reported a sharp increase in quarterly profit in the third quarter of 2024.
Operating profit increased by 15 percent compared to the previous year, significantly exceeding analysts' expectations. These positive results underline the strong demand for air traffic, especially on the important transatlantic routes, and provide an optimistic outlook for the future development of the aviation industry.
Successful balance sheet thanks to high demand and efficient cost control
In the third quarter, IAG posted an operating profit of €1,78 billion, which was above the consensus forecast of €XNUMX billion. These figures reflect the strong demand experienced by all airlines within the IAG group, particularly on the transatlantic routes, which are traditionally among the most lucrative. The routes between London and the USA were particularly busy, leading to a four percent increase in capacity on these North Atlantic routes. The group was also able to expand its offering on the South Atlantic routes.
IAG CEO Luis Gallego stressed that demand remains strong in all of the company's key markets, particularly on transatlantic and intra-European routes. For the full year, IAG expects operating profit to be around €3,7 billion, an increase on last year's profit of €3,5 billion.
Another positive aspect was the significant growth in the cargo sector. Revenue from the freight business increased compared to the same period last year and contributed significantly to the overall result. Combined with higher ticket prices, lower fuel costs and a strong focus on efficiency and cost control, IAG was able to compensate for increased wage costs and record another success.
Looking to the future: Low capacity expansion and optimistic prospects
Despite these encouraging figures, IAG has slightly adjusted its expectations regarding capacity expansion for the year as a whole. Instead of the originally planned seven percent increase in capacity, it now only expects an increase of six percent. This adjustment is related to the ongoing uncertainties in some global markets, particularly with regard to the geopolitical situation and the ongoing challenging situation on the Asian routes.
IAG has made a conscious decision to develop its activities in Asia at a lower intensity, particularly due to competition from Chinese airlines that can use Russian airspace for shorter flights and thus gain a competitive advantage. This decision reflects IAG's strategic focus to continue to focus on the lucrative and high-demand transatlantic and European routes.
Financial stability and share buyback
The positive results and strong market performance led to a notable increase in IAG's share price, which rose by six percent, reaching levels last seen in March 2020. This year, the stock has already risen by an impressive 50 percent, boosting confidence in the company's long-term development.
As a further signal of financial strength, IAG announced a share buyback worth €350 million. Much of this amount will be used to purchase shares on the market, while the remainder will be used to purchase shares currently held by Qatar Airways. This decision is intended not only to increase value for shareholders, but also to further cement the strategic partnership between IAG and Qatar Airways.
IAG on course for further growth
With quarterly profits that exceeded expectations and a solid balance sheet, IAG is demonstrating that the company is well positioned to benefit from passengers' strong desire to travel in the coming years.
The focus on the lucrative transatlantic routes and the continuous improvement of efficiency are paying off. The slight adjustments in capacity planning and the cautious strategy in international markets such as Asia underline the company's forward-looking approach. With a solid financial foundation and strong market performance, IAG is optimistic about the future.
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