British Airways owner IAG reports bigger than expected profits

International Airlines Group has reported a second summer of record profits, with sustained demand for transatlantic travel helping the owner of British Airways outperform its European rivals. The Anglo-Spanish company reported an operating profit before exceptional items of E2.01b for the three months to the end of September, 15% higher than a year earlier and a record quarter for the company. IAG, which owns five airlines including BA, also announced a E350m share buyback programme, reflecting “our confidence in the strategy and business model, as well as the long-term prospects for the business”. “Demand remains strong across our airlines and we expect a good final quarter of 2024 financially . . . we don’t see any weakness in the future,” said CE Luis Gallego. IAG shares rose 6% in morning trading on Friday in London as the results beat analysts’ expectations. The strong results and bullish outlook contrast buck the gloom among the group’s competitors in Europe, which have struggled to match last summer’s record-breaking profits. They also come despite BA facing major operational problems. Flight delays and cancellations have risen significantly at the UK-based carrier since the Covid-19 pandemic, even though the company put extra resources into this summer’s operations at Heathrow, which suffers from congestion and air traffic delays Industry executives believe BA will have to do more, even at the expense of future financial returns, and the airline has trimmed back its winter flying schedule. “I think we have got to reflect on what next summer will be like,” said BA CE Sean Doyle. “We will want to be more resilient and better next summer, on the basis that I don’t think that external environment may improve too much.”<br/>