British Airways owner surpasses expectations, cautiously awaiting future plans

IAG, the parent company of British Airways, recently reported that its quarterly profits exceeded analysts' estimates by 40%. The company is optimistic about summer travel but remains cautious about the wider economy. Despite inflation and rising interest rates affecting household incomes, leisure travel has been booming since the lifting of pandemic restrictions last year, leading to higher ticket prices and increased profits for airlines. 


Air France-KLM also reported better-than-expected earnings recently, however, Ryanair expressed concerns about demand for the remainder of the year. IAG is the owner of several airlines including Iberia, Aer Lingus, and Vueling. The company is mindful of potential uncertainties that could impact the full-year results, such as fuel prices and demand. 

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While it has not seen any weakness in Q3 and Q4, it remains cautious about the full-year outlook. The company's shares have risen by 25% this year, but are still far below pre-pandemic levels. IAG did not provide an update on its full-year guidance but previously stated that it anticipated annual profits above 2.3 billion euros ($2.5 billion), with analysts' consensus forecast standing at 2.8 billion euros. 


According to IAG, bookings for the October-December period are currently at 30%, which is typical for this time of year. The company is focused on providing resilient operations throughout the summer, despite the challenges of air traffic control and labor disputes in Europe. Overall, while the outlook remains uncertain, IAG's recent profits have exceeded expectations and are likely to push expectations for this year's operating profit above 3 billion euros.

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