The owner of British Airways delivered a better than expected summer performance and indicated no signs of weakness in forward bookings.
International Airlines Group, which also runs Aer Lingus, Iberia and Vueling, saw its shares rise by as much as 10% on the announcement on Thursday.
Operating profits from the summer peak quarter to September 30 are expected by the company to be in the region of €1.2 billion against a loss during the pandemic at the same time last year.
IAG said: “Trading during the third quarter has been better than expected due to passenger revenue strength.
“Forward bookings remain at expected levels for the time of year, with no indication of weakness, and accordingly our fourth quarter expectations remain unchanged as of today.”
IAG shares jumped as much as 10% to 109 pence after the unscheduled announcement, which was likely put out given that the third quarter outcome was materially higher than the consensus of €779 million, Reuters reported.
Full results for the nine months to September 30 are due to be issued on October 28.
The positive message from IAG followed Easyjet reporting that operations had normalised since the start of July with a “record bounce back” over the summer and Delta Air Lines achieving record revenues in the three months to September 30.
The positive outlook from IAG came as the US Travel Association’s latest forecast suggested that growth in business travel cannot be sustained in the long term amid recessionary fears, leading to a decline in the coming quarters.
The new survey data followed economists in the US and around the world sounding alarm about worsening economic conditions.
JPMorgan Chase chief executive Jamie Dimon cautioned on Monday that “very, very serious” headwinds – including inflation, rising interest rates and the ongoing war in Ukraine – were likely to tip the US into a recession in the next six to nine months.
With many economists and business leaders anticipating a mild recession in 2023, companies may look for ways to limit investment and travel spending, delaying a full recovery in business travel activity, the US travel trade organisation warned.
It called on the US Congress to support temporary tax provisions that would encourage companies to restore business travel spending, particularly covering workers in the food service and entertainment sectors.
The US state department should take steps to “greatly reduce” visitor visa interview wait times, which have crept to more than 440 days on average from top source markets, to facilitate more international business travel particularly as the strength of the US dollar is posing a hurdle to attracting international meetings and events.
US Travel Association president and chief executive Geoff Freeman said: “Business travel is coming back slowly, and these policies will be essential to keeping employees on the road and helping still-recovering companies weather an oncoming recession.”