British Airways owner IAG posts record profits on leisure travel boom

British Airways owner International Airlines Group (IAG) has revealed record annual profits after cashing in on resurgent travel demand, including from leisure travellers booking premium economy, and business class seats. Underlying operating profits at the group, which also includes Iberia, Vueling and Aer Lingus, more than doubled to GBP3b for 2023, higher than its previous pre-pandemic peak in 2019. CE Luis Gallego shrugged off the impact of the recession in the UK on demand, saying it “continues to be very strong, particularly in leisure”. “We don’t see any weakness in the market,” he added. However, the group admitted poor performance from BA at its London Heathrow hub, where only 60% of flights departed or arrived within 15 minutes of schedule during 2023. “As a result, significant resources have been invested to drive better performance and some early initiatives are now starting to deliver improvement,” IAG said in its results presentation. Business travel has been slow to bounce back, but has been offset by leisure travellers booking premium seats, it said. Capacity for the final three months of 2023 was at 98.6% of the levels seen before the pandemic struck in 2019, with full-year capacity at 95.7% of those levels. It expects to grow overall capacity by around 7% in 2024. Gallego said: “In 2023, IAG more than doubled its operating margin and profits compared to 2022… recovering capacity to close to pre-Covid 19 levels in most of its core markets.”<br/>