The International Consolidated Airlines Grp SA (LON: IAG) share price rallied 5.2% after releasing its Q1 2023 results, which saw it swing to a €9 million profit, marking its first profitable quarter since Q1 2019. The profit was a €750 million improvement to the loss recorded in Q1 2022.
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Investors cheered the news, as evidenced by the IAG’s share price rally, given that the first quarter is usually a seasonally weak quarter for the airline group. The company raised its full-year profit guidance based on its impressive Q1 performance.
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IAG now expects its full-year profits to be higher than its previous range of €1.8 billion to €2.3 billion while excluding exceptional items. The airline group attributed its profits to a higher yield performance across its various airlines and lower fuel prices after crude oil prices fell.
The company is focused on growing its core Latin America and North Atlantic markets while building Vueling’s year-round leisure network. The company said that the busy summer season looks promising based on the bookings made to date.
IAG revealed that 80% of its summer capacity was already booked, which shows significant demand for its services. The company’s revenues for Q1 surged 71.4% to €5.90 billion compared to Q1 2022, when its revenues were €3.44 billion.
The group noted that all its airlines, including British Airways and Iberia, the UK's and Spain's flag carriers, respectively, showed strong performance during the quarter. The airline group revealed that it had hired thousands of new employees over the past year to strengthen its operations.
IAG also reiterated its commitment to sustainability by buying more fuel-efficient aircraft.
Luis Gallego, IAG’s CEO, said: “IAG has delivered a strong first quarter financial performance, as Group airlines recovered capacity to close to pre-pandemic levels. Iberia contributed a record first-quarter profit, and all our airlines performed above expectations, benefiting from robust demand and a lower fuel price in the quarter. We are seeing healthy forward bookings with leisure demand particularly strong while business travel continues to recover more slowly.”
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IAG share price.
The IAG (LON: IAG) share price surged 5.21% to trade at 155.82p, from Thursday’s closing price of 148.10p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.