LONDON, July 29(ABC): British Airways parent IAG said Friday it flew back into profit for the first time since the start of the Covid pandemic, boosted by a “strong recovery” in demand. IAG said in a statement that it swung back to net profit of 133 million euros ($135 million) in the second quarter from a loss of 981 million euros a year earlier. The group had already forecast a return to annual profit after Covid travel curbs were fully lifted.
“In the second quarter, we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines,” said chief executive Luis Gallego. “This result supports our outlook for a full-year operating profit.”
There were “no signs” of any weakness in demand, Gallego said. The airline conglomerate slashed first-half losses to 654 million euros from two billion euros last time around. IAG had collapsed into annual losses in 2020 and 2021 as Covid ravaged global demand for international air travel, forcing BA and its peers to slash thousands of jobs. IAG owns various airlines that also include Ireland’s Aer Lingus and Spain’s Iberia and Vueling.
Aviation is still in recovery mode from the deadly Covid pandemic that grounded planes worldwide. Nevertheless, the outlook for the sector remains fragile due to major disruptions, notably staff shortages. Airlines and airports are struggling to recruit staff having sacked thousands of workers as the world entered Covid pandemic lockdowns.
“Our industry continues to face historic challenges due to the unprecedented scaling-up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute,” Gallego said. “We will continue working with the industry to address these issues as aviation emerges from its biggest crisis ever.” IAG is nevertheless expanding its ageing fleet with fuel-efficient aircraft, positioning itself for the recovery.
So far this year, IAG has announced the addition of 50 new Boeing 737s and 59 Airbus A320neo family aircraft. These will help replace more than 60 percent of its short-haul fleet by 2028. IAG’s share price edged up 0.1 percent in early London deals following the results.
“The post-pandemic trajectory is moving in the right direction, despite headwinds from staff shortages, passenger delays, strikes and cancellations,” said analyst Richard Hunter at Interactive Investor. “There has been supercharged demand for international travel… that IAG has capitalised on, with particularly strong demand for flights to Spain and Latin America.”