IAG’s financial performance has resulted in profit in the three months up to 30th June 2023. The fact that British Airways’ parent company is back in the black is good news particularly since in made a loss in the previous quarter. Overall however IAG’s financial performance has been good since the lifting of pandemic restrictions, with the company making a profit at the year end in 2022.
As we know the pandemic took a terrible toll on airlines as government restrictions meant that demand for flights slumped. Like many companies, IAG’s financial performance was also affected. To make matters worse, airlines had to reduce flights after pandemic restrictions were lifted. This is because there was a post pandemic surge in demand for flights with mass congestion at airports which struggled to cope due to lack of staff. The reason for this is that many staff had been laid off during the pandemic and the airlines needed time to recruit more staff as many were now in other fields. Congestion particularly affected airports such as London’s Heathrow in the UK. However British Airways took a pro-active stance and voluntarily reduced its number of flights.
IAG’s Financial Performance
In terms of IAG’s financial performance, as airlines which were part of the group such as British Airways took steps to reduce flights, the company was able to reduce the negative effects of the post pandemic surge. As a result IAG’s financial performance has been good overall since most pandemic restrictions were lifted last year. In the three moths up to the 30th June 2023, the company made a profit of 1.008 billion euros. This is an improvement on the previous quarter’s profit. In the three months up to 31st March 2023, the company made a loss of 87 million euros. The fact that profit in the second quarter was so high whereas the loss in the first quarter was relatively low meant that overall IAG’s financial performance resulted in profit for the first half of the year. In the six months up to 30th June 2023, the company made a profit of 921 million euros.
When compared with the same time last year, there has also been a dramatic improvement in IAG’s financial performance in the second quarter. In the three months up to 30th June 2022 the company made a profit of 133 million euros when compared to 1.008 billion euros in the three months up to 30th June 2023. This translates to an improvement in profit of over 7 times. The improvement in profits when comparing the half year figures is even more significant. In the 6 months up to June 30th 2022, IAG’s financial performance resulted in a loss of 654 million euros whereas as we know, in the same period this year, the company made a profit of 921 million euros.
In terms of revenue (total money received), IAG’s financial performance has resulted in a figure of 7.694 billion euros. This is 30% higher than the revenue made in the three months up to 30th June 2022, which was 5.916 billion euros. The fact that IAG’s revenue has improved since last year indicates that the company is attracting more customers. In addition ,the fact that profit has improved by over 7 times even though revenue has improved proportionately to a lesser extent at 30% indicates that IAG has significantly improved in its ability to control costs.
In terms of the company’s response to IAG’s financial performance, the company’s Chief Executive Officer, Luis Gallego said that strong profits have helped to fund greater investments for their customers and reduced company debt. He also thanked the company’s teams for their hard work contributing to the strong performance. He has added that there is a strong customer demand across the group particularly for leisure travel with 80% of the passenger revenue for the third quarter already booked.
As one can see, IAG’s financial performance appears to have fared well this quarter with a good profit. This has also eclipsed the loss made in the previous quarter resulting in a good half year performance, especially when compared to last year. The outlook for the third quarter, from what the Chief Executive Officer says, also looks positive. We have to wait to see how this progresses.