- First-quarter revenue rose 9.2% to €6.4bn.
- Operating profit improved from €9mn to €68mn.
- Net debt down from €9.2bn to €7.4bn.
Derren Nathan, head of equity research, Hargreaves Lansdown:
“International Consolidated Airlines Group (IAG), whose brands include British Airways and Iberia, has maintained altitude in the first quarter of the year. The timing of the Easter break no doubt helped but, even so, it’s an impressive start to the year. The strong recovery in leisure travel continues with passengers keeping the annual getaway high up the list of discretionary spending priorities. The Group’s flying more planes and keeping them full. There’s been good demand for business travel too, albeit the recovery has had a shallower flight path. It’s pleasing to see positive progress on all key financial metrics. Lower fuel costs were complemented by a greater mix of more modern efficient aircraft, and operational costs are also being tightly managed. Debt keeps on coming down so it’s worth keeping an eye on dividend policy if strong trading continues. There was little in the way of forward guidance but the tone was confident, with IAG well positioned for the summer, against a backdrop of continuing high demand for leisure travel. Although the shares have performed well recently, the valuation is still below the historic average as a multiple of revenue. With the outlook for inflation, rates and the economy in Europe pointing in the right direction, IAG could fly higher still.”
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