British Airways-owner International Consolidated Airlines Group (LSE:IAG) enjoyed a 43% increase in operating profit to €1.7 billion in what was its best-ever third quarter, helped by improved transatlantic demand and lower costs.
The FTSE 100-listed airline said bookings for the fourth quarter are in line with expectations, meaning there is no change in full-year guidance, though non-fuel costs are expected to be at the lower end of previous guidance for a 6-10% improvement due to a "higher level of disruption".
Overall, the Anglo-Iberian group said it expects 2023 to be “a year of strong recovery” in margins, operating profit and balance sheet, with capacity to be around 96% of pre-COVID-19 levels.
It used the cash generated during the period to trim borrowings built up during the pandemic, cutting net debt to €8 billion at the end of September from €10.4 billion a year earlier.
Operating profit margins improved to 20.2% from 16.6% due to an 18% boost to capacity since last year, supported by 20 aircraft deliveries year to date.
Passenger unit revenue increased 2.2% year-on-year, while non-fuel costs for the quarter were down 3.5% and fuel costs down 6.2%.
Without the impact of the UK air traffic control fault in August on BA flights, non-fuel costs would have been down by around another percentage point, the company said.
Customer demand was "strong across all our routes", in particular both north and south transatlantic and "all leisure destinations around Europe," said chief executive Luis Gallego.