IAG’s financial performance has resulted in a profit in the third quarter of 2024. In the results, released in November, the company made a profit of 1.435 billion euros in the three months up to 30th September 2024. This is a 16.7% improvement from the same time period in 2023 when the company made a profit of 1.23 billion euros.
The Results
The Results
This is a significant improvement and achievement given the fact that in the second quarter of 2024, IAG’s financial performance, even though it still resulted in a profit, was a reduction when compared its performance in the second quarter of 2023. In addition, IAG’s financial performance in the third quarter of 2024 is also better than the loss making first quarter. As we know, the aviation industry has had problems in the past few years. IAG’s financial performance, like that of many airlines, has had setbacks because of this. The Covid pandemic meant that governments around the world restricted international travel, which meant that demand for air travel slumped affecting the financial bottom lines for many airlines.
To make matters worse, even after restrictions were lifted in 2022, problems ensued due to staff shortages as many had been laid off during the pandemic when demand was less. Mass flight delays and cancellations came about due to congestion at airports and many such as London Heathrow in the UK came up with mandatory restrictions to reduce this. One of IAG’s subsidiaries, British Airways took its own initiative by reducing its own flights before these restrictions came into force. However, IAG’s financial performance, as with other airlines, has had further setbacks with conflicts in Ukraine and the Middle East resulting in a reduced ability to fly as well as longer detours and fuel price hikes resulting from sanctions on Russian oil.
Continued Growth in IAG’s Revenue
Fortunately IAG’s financial performance has been strong for this quarter with a continued improvement in revenue as well, showing that the company’s airlines are gaining more demand from customers. In the third quarter of 2024, IAG received a total revenue of 9.329 billion euros. This is a 7.9% improvement in IAG’s revenue when compared to the third quarter of 2023 when the company made 8.646 billion euros. This follows a similar trend but with a slight improvement to that in the second quarter of 2024 where revenue increased by 7.8%.
In terms cost control, IAG’s financial performance resulted in an improvement in profit by 16.7%. For IAG’s revenue however, even though there was an improvement, this was less at 7.9%. The fact that profitability has improved to a greater extent than revenue indicates that cost control has improved for the company. There has also been a reduction in fuel prices since the same time last year. This is good news for IAG.
Outlook For The Fourth Quarter and Year-End
In terms of the next quarter and end of year results, it is estimated that non-fuel costs are going to be up by 2% for the year, reflecting the lower growth in capacity (number of seats) due to flight disruption and lack of availability in the group. There is however a planned growth in capacity that the company is hoping for the fourth quarter of 5% and for the year-end results will be at 6%. Total fuel cost for the year is expected to be 7.7 billion euros. IAG’s financial performance is expected to be strong for the rest of the year.
In conclusion, therefore IAG’s financial performance has had a good third quarter improving both in terms of revenue as well as profitability when compared to the same time period last year. In addition, IAG has exceeded the performance of the previous two quarters this year. Overall, therefore the news is good for IAG. We wait to see how this progresses.
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