British Airways owner IAG and Air France-KLM predict summer boom

British Airways owner IAG and Air France-KLM have said they expect a surge in summer bookings as the post-pandemic travel boom gathers pace. IAG, which also owns Iberia, Aer Lingus and Vueling, on Friday raised its annual profit forecast, helped by consumers’ willingness to stomach higher ticket prices, as well as a drop in fuel costs across the sector. The volume of wealthier passengers taking business class to Paris is buoying demand, according to Air France-KLM, which said that it had repaid all of the state aid it received during the pandemic. The two European airlines join Germany’s Lufthansa in reporting an optimistic outlook for the summer travel season. IAG said it had “healthy forward bookings” from leisure travellers in particular. As a result, the company expects full-year operating profit before exceptional items to surpass the E1.8b to E2.3b range it had forecast in February. The industry’s recovery from the pandemic has outpaced the expectations of many senior executives and investors, with consumers appearing to prioritise travel amid the surge in inflation across large western economies. For the first time since 2019, IAG began the year with a profitable quarter. Its earnings before exceptional items were E9m compared with a loss of €741mn a year before. “All our airlines performed above expectations,” said CE Luis Gallego. Analysts at Bernstein said IAG’s Q1 performance “put other legacy airlines in the shade” in what is a typically lossmaking quieter period. The group expects to fly 97% of its 2019 capacity this year, and highlighted strong demands on routes including in Spain and Latin America. The rebuilding of British Airways’ flight schedules is lagging behind the rest of the group, largely due to the slower reopening of Asia, and is forecast to hit 92% this year.<br/>