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Investing.com — The post-pandemic rebound at International Airlines Group (LON:ICAG) is set to continue in style this year.
The owner of British Airways and Iberia said on Friday it expects operating profit to rise by around 60% this year to around €2.05 billion (€1 = $1.0591) before exceptional items, after a sharp swing back to surplus in 2022 that followed two years of heavy losses.
Chief executive Luis Gallego said 2022 had been “a year of strong recovery, driven by sustained leisure demand and markets reopening.” He added that “we continue to see robust forward-bookings, while also remaining conscious of global macro-economic uncertainties.”
IAG finished the fourth quarter on a strong note, with a net profit of €232 million on an 81% rise in revenue to €6.39B. Operating profit was €486M, a turnaround from a loss of €305M a year earlier, thanks in part to a sharp rise in prices as its airlines cashed in on pent-up demand across Europe.
Passenger unit revenue was up 11% from 2019, with a particularly strong increase in the second half thanks to a sharp recovery in leisure traffic and a steadier one in business travel. The group’s load factor, which measures how full its aircraft were, rose to 83.2% in the fourth quarter from only 71.5% a year earlier.
The group still expects to lose €200M on an operating level in the current quarter, usually the slowest of the year for airlines. However, it is now running at just below the capacity level it had immediately before the pandemic, with available seat-kilometers back at 96% of 2019 levels in the current quarter and expected to average 98% of 2019 levels over the full year.
The company is still having to cope with a heavy debt burden as a legacy of the pandemic. Net debt fell only moderately from €11.7B to €10.4B and is expected to stay around that level this year, not least because of capital spending commitments of €4.0B.
IAG stock fell 2.0% in early trading in response to the news, which contained no word of when shareholder payouts might resume. The stock has still to recover meaningfully from its collapse at the start of 2020.
