In the first half, IAG SA (LON:IAG) flew 72.0% of 2019 capacity as travel restrictions continued to ease. As a result, revenue rose from €2.2bn to €9.4bn. There was an underlying operating loss of €467m, though the group did turn a profit in the second quarter for the first time since the start of the pandemic.
The group’s expecting to turn a profit for the full year. Though, due to challenges at Heathrow, full year capacity targets have been dropped 2 percentage points to 78%.
Q2 2022 hedge fund letters, conferences and more
The shares rose 2.1% following the announcement.
IAG’s Earnings
Matt Britzman, Equity Analyst at Hargreaves Lansdown
“The British Airways owner returns to profit for the first time since the pandemic, with an operating profit at the full year mark now looking promising. Markets had a favourable reaction, and commentary suggesting forward bookings show no sign of weakness supports the argument that pent up demand for travel still far outweighs the impact of a cost-of-living crisis.
IAG’s long haul recovery continues to lag that of shorter trips in Spain and further afield, with continued restrictions in large parts of Asia not helping the matter. There’s also trouble closer to home, with Heathrow implementing restrictions on capacity for airlines, hitting BA’s recovery in particular.
We could be staring at a turning point for IAG. There’s no doubt turbulence ahead, but a resilient consumer and cash flow that’s turned positive are hallmarks of a business that can push on.”
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