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British Airways’ owner IAG raises profit guidance as capacity reaches 97% of pre-pandemic levels.

The company reports that demand for international travel is high despite the tightening of family budgets and that lowering fuel prices are also contributing to its improved profit outlook.

The parent company of British Airways has increased its annual operating profit forecast due to an increase in reservations, stating that it expects capacity to reach 97% of the pre-pandemic year in 2019.

IAG, which owns Iberia and Aer Lingus, said that its transatlantic profitability initiatives were succeeding.

The company cited leisure travel as its primary driver, while lower fuel costs boosted its bottom line.

British airways' owner iag raises profit guidance as capacity reaches 97% of pre-pandemic levels.
British airways' owner iag raises profit guidance as capacity reaches 97% of pre-pandemic levels.

It was reported that traffic in Latin America and North America had already surpassed levels seen before the COVID public health emergency devastates international travel.

As foreign flights restarted, the company’s first-quarter revenue rose to €5.9bn (£5.2bn) from €3.4bn (£3bn).

It reported a first-quarter operating profit of €9 million (£7.9 million) before exceptional items. As is typical for the three months, analysts had anticipated losses of approximately €180 million (£157,4 million).

The company expects its yearly profit to exceed the February forecast of €1.8 billion to €2.3 billion.

Such a performance at the highest level would represent a 90% advance over 2022.

It described the summer prognosis as “encouraging.”

In defiance of the impact of the cost of living crisis on family budgets, the update confirms rivals’ claims that demand for vacations abroad remains high.

At the opening bell, the stock market increased by 4%.

Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, commented on the figures. British Airways owner IAG earned an underlying operational profit for the first time since 2019 in the first quarter.

While not all pandemic headwinds have completely dissipated. IAG is in much better condition overall, as business travel, to which it is highly exposed, remains sluggish.

She added, “Being more long-haul oriented, it has taken IAG a very long time to return to normalcy. But all things considered, normalcy is now back on the agenda.

Continued workforce disputes at major hubs, such as Heathrow, could reduce demand and brand allure if queues and disruptions are worse than anticipated heading into the crucial summer travel season.

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