IAG shares start as British Airways owner forecasts record £1bn profits after booking period surge
- News of the record results sent IAG’s share price up as much as 10 percent, trading at a high of 110.53 pence just after midday on Thursday
- The company will report its consolidated results for the nine months ended September 30, 2022 on October 28
- IAG shares also rallied earlier in the week as Heathrow regained its status as Europe’s busiest airport
British Airways owner IAG is expecting record third quarter profits after a solid booking run.
The London-headquartered company told investors on Thursday afternoon that it expects operating profit in the region of £1 billion (€1.2 billion) for the period.
The unexpected announcement sent IAG’s share price up as much as 10 percent, trading at a high of 110.53 pence just after noon on Thursday, before higher-than-expected US inflation data halved gains.
British Airways owner IAG has said it expects third-quarter profits on the back of record bookings
Looking ahead, BA said in a statement, “Forward bookings remain at expected levels for the time of year with no sign of weakness and accordingly our expectations for the fourth quarter remain unchanged as of today.”
The company will report its consolidated results for the nine months ended September 30, 2022 on October 28.
Commenting on IAG’s upcoming third quarter results, Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown said: “Despite the tremendous cost of living pressures consumers are facing, the British Airways ticket office appears to have been very busy.
“IAG has been one of the hardest hit airlines since the pandemic, with long-haul and business travel taking much longer to return to pre-Covid-19 pandemic levels than their short-haul counterparts.
Despite the buoyant numbers, Lund-Yates warned that the cost of living crisis could weigh on the overall outlook.
She said: “There’s still a long way to go before champagne can be popped. Consumer behavior has yet to fully adjust to a world of higher inflation and rising costs.
‘If spending begins to slow down, the strong appointment book could certainly come under pressure. Then there’s the question of IAG’s teary-eyed mountain of debt after taking on enormous liabilities to weather the worst of the pandemic storm.
“Ultimately, this improvement over expectations is a very welcome surprise, but whether the lively mood music can be maintained is another matter entirely.”
British Airways owner International Consolidated Airlines Group (IAG) saw its share price rise 1.12 percent to 102.88 pence
IAG shares gained another boost earlier in the week as Heathrow regained its status as Europe’s busiest airport.
West London Airport said on Tuesday it was used by more passengers between July and September than rivals in cities like Paris, Amsterdam, Frankfurt and Madrid.
The news helped boost the share price of a number of airlines operating out of the UK.
A year ago, Heathrow blamed Britain’s comparatively strict coronavirus travel rules for slipping into the ranking of Europe’s busiest airports after being number one in 2019.
Heathrow usage has increased since UK travel restrictions were lifted in March.
Around 5.8 million passengers passed through Heathrow in September. But demand last month was still 15 percent below pre-virus levels in September 2019.
The airport insisted the outlook for future demand remains “uncertain”.
This is due to “growing economic headwinds, a new Covid wave and the escalating situation in Ukraine”.
It added: “However, we expect the peak days leading up to Christmas to be very busy.”
Heathrow said the “vast majority” of passengers traveling through the airport this summer have had “a very good experience” as a cap on the number of departing travelers has “successfully balanced supply and demand”.
This was followed by long queues and baggage handling problems in early July, which were blamed on staff shortages.
The cap will be lifted on October 29th.