IAG Set to Announce Record-Breaking Operating Profit of €3.5 Billion

International Airlines Group (IAG), the parent company of British Airways, is poised to release extraordinary financial results for 2023 next week, forecasting an unprecedented annual operating profit of €3.5 billion, capitalizing on last year's post-pandemic travel demand surge.

Despite looming threats of a British recession and the turbulence of global uncertainties, IAG is expected to unveil financial outcomes that not only surpass expectations but also set a new benchmark for success in the aviation industry. Total sales are projected to reach a record €29.4 billion, marking a 27% increase year-over-year. The spike in flight demand in 2023, fueled by the lifting of Covid travel restrictions globally, has positioned IAG well above its previous peak in 2018.

Amidst concerns over a potential drop in holiday demand due to the recent UK recession, IAG has demonstrated an unparalleled ability to attract passengers to its key routes and coveted holiday destinations, underlining its success in a challenging global environment as highlighted by The Independent.

However, despite a string of record results, shares of British Airways' parent company, which also owns Iberia, Aer Lingus, and Vueling, have fallen approximately 10% over the past 12 months. Investors' fears that IAG might lose ground to low-cost and short-haul carriers like Easyjet, Ryanair, and Wizz Air are compounded by geopolitical uncertainties in the Middle East and Ukraine, as well as the UK's gradual descent into recession.

Investors will also closely monitor IAG's debt levels. The group has been steadily reducing its debt, earning an upgrade from S&P late last year. "By the end of Q3 2023, net debt stood at €8.0 billion, and the FTSE 100 company had repaid the 2020 £2 billion British export loan (UKEF) three years early. This could potentially pave the way for a return to the dividend list in 2024, after a four-year hiatus," stated analysts at AJ Bell.

Source: Air Journal