British Airways owner’s transatlantic focus lifts shares to post-pandemic highs

A big bet on transatlantic flying has paid off for long-suffering investors in British Airways owner IAG, as a year-long rally lifts the airline group’s shares to their highest level since the start of the pandemic. Shares in IAG, the owner of five carriers including BA, Iberia and Aer Lingus, last week closed at just under 316p, the highest level since February 2020. The stock was down on Monday, but it more than doubled last year to make it the top performer on London’s FTSE 100. The turnaround in the company’s fortunes came as investors cheered a second consecutive summer of record profits built on lucrative transatlantic flying, which has seen particularly strong demand since the end of the pandemic. “They have focused on where they can fly to win,” said Andrew Lobbenberg, head of European transport equity research at Barclays. This allowed IAG to pay off its outstanding pandemic debt and reinstate its dividend. It also announced E350mn of shareholder buybacks late last year, the first since the pandemic. “Demand remains strong across the Atlantic and within Europe,” said Nicholas Cadbury, IAG’s CFO, adding that the group’s shares were supported by “significant cash flow and increasingly strong balance sheet”, which increased investor returns. One of the biggest questions now hanging over IAG is whether a £7b investment plan in British Airways can improve service and reduce delays and other operational problems at its main profit generator.<br/>