British Airways owner International Airlines Group reported strong demand over the summer quarter with operating profits up by 15%.
Total revenue in the three months to September rose by 7.9% to €9.3 billion, giving an operating profit of more than €2 billion.
The company, which also includes Aer Lingus, Iberia, Vueling and Level, expects the “strong financial performance” to continue for the rest of the year.
The North Atlantic region “continues to be a major area of strength” with capacity up by 3.9% in the quarter and passenger unit revenue rising by 3.5%.
“Within this, unit revenue at British Airways was particularly strong whilst Aer Lingus saw a negative impact from the pilots’ strike as well as increased competitor capacity to Dublin,” IAG noted.
The group also investing in the growing Latin America market, in particular through Iberia and Level.
IAG added: “We continue to see strong customer demand in our intra-European network, where capacity increased by 5.3% in the quarter and passenger unit revenue increased by 1.4%.
“All of our short-haul airlines saw good demand and revenue performance across Europe in the quarter.
“Our capacity growth in the Domestic region (Spain and UK) was 4.1% in the third quarter, with good performance in particular from our short-haul airlines Vueling and Iberia Express.
“The rest of the world continues to be more challenging, albeit as a smaller part of IAG’s total capacity (15%).
“Whilst IAG has grown capacity by 17.6% in Asia Pacific, this reflects the restoration of pre-Covid-19 network points and frequencies, which our airlines will continue to review to ensure disciplined capital allocation.
“Our Loyalty business has continued to grow both revenue and profit as it increases ways for customers to earn and spend Avios.”
IAG announced a €350 million share buy-back scheme “reflecting our confidence in the strategy and business model, as well as the long-term prospects of the business”.
Chief executive Luis Gallego said: “We achieved a very strong financial performance in Q3 2024, with a 15.4% increase in operating profit compared to the same period last year and improving our margin to 21.6%.
“This is due to the effectiveness of our strategy and Group-wide transformation.
“We are also delivering on our commitment to provide sustainable returns for shareholders.
“Demand remains strong across our airlines and we expect a good final quarter of 2024 financially.”
Commenting on the Q3 results, Julie Palmer, partner at Begbies Traynor, said: “Following the important summer season, IAG appears in rude health, with the airline’s Q3 results showing improved figures across the board.
“In contrast to its peers, heavily affected by Boeing delivery delays and falling ticket prices, the British Airways owner was able to materially increase passenger revenues leading to a near 8% uptick in overall revenues. This is all the more impressive given it has also been able to sustain some solid capacity growth.
“This is not to say IAG has been immune to the challenges facing the industry this quarter. Aer Lingus saw a negative impact from the pilots’ strike, but with its strong European network, the group is particularly adept at capitalising on strong customer demand.
“There will be issues to navigate over the quieter winter period, and performance in regions like Africa and Asia-Pacific is not going quite as well currently, but IAG expects momentum to continue for the rest of the financial year and the announcement of a €350 million share buyback programme today indicates just how strong a position IAG believes it is in”.