International Airlines Group (IAG), the parent company of British Airways, has announced a remarkable surge in annual profits for the year 2023, driven by a sustained demand for leisure travel. Operating profits have more than doubled compared to the previous year, surpassing the pre-Covid levels of 2019.
The company reported an annual profit of €2.7 billion (£2.3 billion) after tax, with operating profits reaching €3.5 billion (£3 billion). This exceptional performance has been attributed to high fares and an increase in premium leisure travel, which offset the decrease in business travelers.
Despite a recession in the UK, the demand for flights has remained strong. IAG’s Chief Executive, Luis Gallego, expressed confidence in the market, noting no signs of weakness. He highlighted the company’s robust financial results, with operating margins and profits doubling compared to 2022. Furthermore, capacity has almost returned to pre-pandemic levels in most core markets.
While British Airways has been operating at 90% of its previous capacity due to ongoing challenges in certain Asian destinations, there are plans to reach near 2019 levels this year, especially with increased frequencies on transatlantic routes.
Looking forward, IAG’s Chief Financial Officer, Nicholas Cadbury, disclosed plans for a 7% capacity growth and stressed the importance of efficiently filling this additional capacity. British Airways is gearing up for a £7 billion overhaul, which includes investments in new aircraft, updates to business-class seats, lounge enhancements, and IT system upgrades.
Gallego emphasized the significance of British Airways as a key asset with substantial potential, showcasing the company’s dedication to continuous investment and enhancement. The future looks promising for British Airways as it strives for further growth and innovation in the aviation industry.