The owner of British Airways, International Airlines Group (IAG), has reported strong profits for the year 2023, driven by sustained demand for leisure travel. Operating profits doubled compared to the previous year, surpassing pre-Covid levels from 2019.
IAG posted an annual profit of €2.7 billion (£2.3 billion) after tax, with operating profits reaching €3.5 billion (£3 billion). The company attributed this success to high fares and increased premium leisure travel, which offset the lower number of business travelers.
Despite a recession in the UK, demand for flights remained robust. IAG’s Chief Executive, Luis Gallego, stated that there were no signs of weakness in the market. He highlighted the company’s strong financial performance, including doubling operating margins and profits compared to 2022. Capacity had also nearly returned to pre-Covid levels in most core markets.
While British Airways operated at only 90% of its previous capacity due to ongoing challenges in some Asian destinations, it plans to reach near 2019 levels this year, particularly with increased frequencies on transatlantic routes.
Looking ahead, IAG’s Chief Financial Officer, Nicholas Cadbury, revealed plans for a 7% capacity growth and emphasized the importance of filling this additional capacity efficiently. British Airways is set to undergo a £7 billion overhaul, including investments in new aircraft, updates to business-class seats, lounge enhancements, and IT system upgrades.
Gallego highlighted British Airways as a key asset with significant potential, underscoring the company’s commitment to ongoing investment and improvement.
