IAG shares saw a 7.5 per cent rise in early trading today following the release of its third-quarter results for the period ending 30 September. The British Airways parent company reported a 7.9 per cent increase in total revenue and a 15.4 per cent surge in operating profit, exceeding €2bn (£1.7bn).
IAG attributed this growth to robust demand across all its primary markets, resulting in a 1.2 per cent uptick in passenger unit revenue. For the nine months concluding in September, the group posted total revenue of €24bn and pre-tax profits of €2.3bn, as reported by .
As of September's end, IAG reported a cash balance just shy of €10bn and borrowings amounting to €16bn.
The airline's crucial North Atlantic, London, and New York routes continued to bolster IAG's performance. Over the three months leading up to September's end, the group observed particularly strong unit revenue at its flagship brand, British Airways.
However, its Aer Lingus brand was negatively impacted by a pilot strike and increased capacity from Dublin airport. Domestic flights within Spain and the º£½ÇÊÓƵ, where the Iberia and British Airways brands are based, rose by 4.1 per cent in the fourth quarter, marking one of the group's strongest segments during this period.
On the flip side, the company issued a warning about operating conditions on its global routes. Although these only account for 15 per cent of group capacity, passenger unit revenue saw a decrease of 15 per cent in the third quarter.
The owner of British Airways experienced a drop in fuel costs for the period, with fuel expenses falling by 4.2 per cent compared to the third quarter of 2023.
IAG attributed this to lower effective fuel prices and the introduction of more efficient margin aircraft into its operational fleet.
However, the firm noted that non-fuel unit costs rose by 2.2 per cent during the period as cost-cutting measures and capacity growth balanced out wage settlements and supply inflation.
In light of the strong figures, IAG unveiled a new share buyback scheme worth over €350m, which management stated was a reflection of their confidence in the strategy, business model, and long-term prospects of the group.
Overall, the owner of British Airways announced plans to boost capacity by approximately six per cent for the full year, with non-fuel costs predicted to rise by two per cent.
IAG anticipates the delivery of 20 aircraft over the year, including four in the fourth quarter.
