BA owner reports strong travel demand despite summer profit decline

British Airways owner International Airlines Group (IAG) issued an upbeat projection on future travel demand despite decline in summer net profit.

 

The figure for the three months to September fell by 2.3% year on year to €1.4 billion.

 

This came as key transatlantic routes saw “some softness”. 

 

BA also rationalised its network to the Asia Pacific region with capacity down 9.8% due to “constrained aircraft availability”.    

 

However, IAG’s net profit for the first nine months of the year rose by by 15.5% to reach €2.7 billion based on revenue rising by almost 5% to €25.2 billion.

 

Passenger revenue for the third quarter increased by €177 million against a record equivalent period last year. 

 

The group, which also include Aer Lingus, Iberia, Veiling and Level, said: “Demand for travel remains strong. 

 

“We are well positioned, with a strong business model with great brands and a best-in-class network, whilst being mindful of the macroeconomic and geopolitical backdrop.”

 

Passenger unit revenue declined by 2.4% in IAG’s third quarter, including an estimated two percentage points of a negative impact of foreign exchange.

 

“Overall it was a good performance, on top of a record third quarter in 2024,” the company said.

 

“As expected the North Atlantic market saw some softness in US point-of-sale economy leisure and unit prices across our airlines were lower in the European market due to a combination of high growth by British Airways and more competitive markets elsewhere. 

 

“The South Atlantic and Asia Pacific markets were strong. 

 

"Specifically, around half of the 7.1% unit revenue decline on the North Atlantic was due to foreign exchange impacts.”

 

Meanwhile, BA delivered its best third quarter on time performance at Heathrow since 2012 and network-wide since 2017.

 

IAG chief executive Luis Gallego said: “We delivered a strong performance in the third quarter and remain on track to deliver another year of growth in revenues, profit and shareholder returns.

 

“So far this year we have grown our operating profit by 18% and adjusted earnings per share by 27% and increased our interim dividend. 

 

“Having nearly completed a €1 billion share buyback, we intend to update the market about further shareholder returns

when we report our 2025 full year results in February.

 

“We remain focused on long-term value creation for our shareholders, helping to deliver our financial ambitions through disciplined investment for the future to improve customer experience and operational efficiencies.”