IAG – welcome relief for bruised long-hauler
- British Airways owner has seen strong passenger revenue and third quarter trading has been better than expected
- Now expects operating profit for the third quarter to be in the region of €1.2bn
- IAG shares rose 9% on the news
Sophie Lund-Yates, Equity Analyst at Hargreaves Lansdown:
“Despite the rampant cost-of-living pressures facing consumers, the British Airways ticket desk has been keeping very busy it seems. IAG has been one of the hardest hit carriers since the pandemic, with long-haul and business trips taking a lot longer to take off back towards pre-covid levels than its short haul counterparts.
There is still a long way to go before any champagne can be popped. Consumer behaviour is yet to fully adjust to a world of higher inflation and increased costs. If spending starts to rein in, the strong forward order book may well come under pressure. Then there’s the question of IAG’s eye watering debt pile, following huge liabilities taken on to get through the worst of the pandemic storm.
Ultimately, this upgrade from expectations is a very welcome surprise, but whether the spritely mood music can be maintained is another question entirely.”
