International Consolidated Airlines Group SA (LSE:IAG) said it expects to be profitable from the second quarter onwards and for the full year as demand for business and leisure travel bounces back with the lifting of pandemic rules.
The British Airways and Iberia owner made a loss after tax of €787mln in the first quarter of the year, down 27% on the same period last year, as it said business travel recovered to its highest level since the start of the pandemic.
Lifting of government travel restrictions, particularly in the UK, resulted in a flood of holiday and business travel bookings, the FTSE 100-listed airline said, with “no noticeable impact” from the war in Ukraine.
With demand increasing, the Anglo-Iberian carrier said the second quarter is planned to have 80% of passenger capacity seen in 2019, rising to 85% in the third quarter and 90% in the fourth, resulting in full-year capacity of around 80% of 2019, with trans-Atlantic flights close to full capacity by the third quarter.
The group had €8.2bn of cash at the end of March and €11.6bn of net debt.
“The group's operating loss reduced significantly in the first quarter compared to last year, with our losses reflecting normal seasonality, the impact of Omicron and costs associated with ramping up operations,” said chief executive Luis Gallego.
“Globally the travel industry is facing challenges as a result of the biggest scaling up in operations in history and British Airways is no exception. The welcome removal of UK's stringent travel restrictions, combined with strong pent-up demand, have contributed to a steep ramp up in capacity.
“The airline's focus at the moment is on improving operations and customer experience and enhancing operational resilience.”