British Airways owner International Airlines Group has upgraded its full year projections as it flew back into profit in the first quarter for the first time since pre-pandemic 2019.
The company reported an operating profit before exceptional items of €9 million against a loss of €741 million in the same three months to March 31 last year.
BA also returned to profit in quarter for the first time since the same period in 2019.
However, IAG cautioned: “This early in the year, we have limited visibility of customer bookings for the second half of the year; and our business is directly impacted by issues in the external operating environment, such as the strikes currently ongoing at French ATC [air traffic control] and Heathrow airport.”
More: Faremine links with Amadeus to bring British Airways NDC fares to trade
Referring to the UK carrier, IAG said: “We are seeing strong demand from leisure travel to most parts of the network. Corporate travel is recovering slowly.
“The change in the non-premium mix of seats in the long-haul fleet also has a negative impact on unit revenue.”
Customer demand currently remains strong in all IAG’s airlines and in all regions, particularly for leisure customers.
IAG expects capacity to be around 97% of 2019 levels for the full year, “as we focus on our core markets”.
The group, which also includes Aer Lingus, Iberia and Spanish budget carrier Vueling, reported an “encouraging outlook” for the summer with around 80% of second quarter revenue now booked.
“We currently expect our full year 2023 operating profit before exceptional items to be higher than the top end of our previous guidance of €1.8 billion to €2.3 billion,” IAG added.
“We continue to focus our capacity deployment on our core Latin America and North Atlantic markets, which are now back at pre-pandemic levels of capacity, as well as growing Vueling’s year-round leisure network.”
Aer Lingus was reported to be is “more seasonally exposed” than the other airlines, but is seeing good demand to European leisure destinations as well as to the US and the Caribbean.
The Irish airline’s short-haul business is “seeing some softness, as are technology industry-related routes,” IAG added.
Chief executive Luis Gallego said: “IAG has delivered a strong first quarter financial performance, as group airlines recovered capacity to close to pre-pandemic levels.
“Iberia contributed a record first quarter profit and all our airlines performed above expectations, benefiting from robust demand and a lower fuel price in the quarter.
“We are seeing healthy forward bookings with leisure demand particularly strong while business travel continues to recover more slowly.
“As we return to more normal operations, we continue to invest in sustainability, including more fuel-efficient aircraft, and in customer experience, updating the business cabins for British Airways and Iberia. Over the past year we have recruited thousands of new employees across the Group and strengthened our operations so that we are ready to deliver for our customers during the summer peak.
“We have the right model to succeed with synergies and efficiencies across the Group and I want to thank all our employees for the role they have played in our continued recovery.”
IAG revealed that Iberia boss Javier Sanchez-Prieto is to leave the group “to pursue a new professional project outside of aviation”.
Fernando Candela Perez, who has been with IAG for 10 years including as head of Iberia Express, is appointed chairman and chief executive of Iberia until the end of the year.
More: Faremine links with Amadeus to bring British Airways NDC fares to trade