IAG’s financial performance remains in the black in its third quarter financial results. This is good news for the parent company of British Airways which made a loss in the first quarter of this year, recovering to make a good profit in the second quarter and therefore an overall profit in the first half of the year. However as one can see the situation has not been easy but for the most part the company over the past year has remained in the profit zone.
IAG’s Financial Performance
In terms of IAG’s financial performance, in the three months ending 30th September 2023 the company made a profit of 1.23 billion euros. This is a 44.2% increase when compared to the same period in the previous year, when the company made a profit of 853 million euros. When compared to the previous quarter there was also an improvement of 22% with the company making at this time a profit of 1.008 billion euros. So IAG’s financial performance has improved on both counts.
In terms of IAG’s revenue (total money received) the company has made a figure of 8.646 billion euros in the three months up to 30th September 2023. This is an 18% increase when compared to the same time period in 2022 when IAG’s financial performance resulted in a revenue of 7.329 billion euros. In addition, when compared to the previous quarter this year, where the company made a revenue of 7.694 billion euros, there was a 12.4% improvement. This shows that revenue has also increased on both counts suggesting that IAG is overall attracting more customers. The fact that profit has improved to a greater extent than revenue also indicates that cost control has improved.
Individual Airlines
The release detailing IAG’s financial performance has also credited the performance of individual airlines, which have seen strong demand for leisure travel. British Airways has increased its profits by 20% this quarter. This shows that British Airways itself is attracting more customers. In terms of profit there has been a 50% increase in profit when compared to the same period last year. As we know British Airways did suffer initially after pandemic restrictions were lifted. This is because flight numbers needed to be cut due to a surge in demand which airports and airlines were initially unable to cope with due to staff shortages. British Airways did gain credit for being proactive in cutting flight numbers before restrictions were imposed.
Aer Lingus, another subsidiary of IAG, has also had a mention in the report detailing IAG’s financial performance. The flagship carrier of the Irish Republic, has had an increase in revenue of 16% and a profit growth of 25.5%. Another of IAG’s subsidiaries, Vueling, originally a Spanish low cost carrier, has also reported a record operating profit and has been praised for having robust cost control. Iberia, the Spanish flagship carrier has also reported increases in revenue and profit and strong trading across its network, which means that there is good demand for its services. So as one can see there has been a positive outlook for most of IAG’s subsidiaries.
The Company’s Response
In response to IAG’s financial performance, the company’s Chief Executive Officer, Luis Gallego has commented that this is a record result for this time period. Because of this strong performance the company has been able to reduce its debt and invest in the business. He said that the company has strong demand across all of its routes. He also said that the company’s strong financial performance has meant that it could invest more in its people and improve the customer experience. He also adds that IAG will continue to move towards its sustainability goals (these may include for example growth in harmony with the environment as well as ensuring that growth continues in a way that improves the long-term prospects of the company). He then thanked staff for their contribution to this performance.
As one can see IAG’s financial performance continues to improve. It appears that performance remains strong among most of its airlines, with a particular increase in leisure travel. The performance of IAG and its subsidiaries appear to be in line with its positive performance in most of the previous quarters. However historically the situation has not been easy. This having been said, IAG boasts a record performance for this time of year according to its Chief Executive Officer. We have to wait to see how this progresses.
