BA owner IAG returns to profit for the first time since the start of the Covid pandemic | International airline group

British Airways returned to profit for the first time since the start of the pandemic, with its owner International Airlines Group saying demand was strong despite the “historic challenges” the industry still faces.

IAG said there were no signs of a slowdown in bookings in the fall and beyond – in the face of pessimistic forecasts from its main airport base, Heathrow – and that demand for the most lucrative transatlantic routes continued to grow.

The group, which includes Iberia, Vueling and Aer Lingus, made an operating profit of €293m (£245m) between April and June, compared with a loss of €967m in the same period last year. BA’s contribution, an operating profit of 54 million euros, was the first time the British flag carrier had posted positive results since 2019, and came despite soaring oil costs and jobs.

The group said the “challenging operating environment at Heathrow” meant BA capacity was limited to 69.1% of pre-pandemic levels between April and June, down from 57.4% in the previous quarter.

The airline, which canceled tens of thousands of flights this summer due to aviation labor shortages, plans to increase capacity by around 75% between July and October.

IAG’s plans for overall passenger capacity are around 80% between July and October, and 85% for the last quarter of the year – a 5% reduction for the second half of 2022 from previous forecasts. , which she said were “mainly due to the challenges at Heathrow”.

IAG Chief Executive Luis Gallego said: “In the second quarter, we returned to profit for the first time since the start of the pandemic after a strong recovery in demand across all of our airlines.

“This result reinforces our outlook for full-year operating profit. Our performance reflects a significant increase in capacity, load factor and efficiency compared to the first quarter.

“Premium leisure remains strong while business travel continues its steady recovery across all airlines.”

Gallego said there were no signs of weakening demand despite the “historic challenges” the industry is currently facing. Others, including Heathrow Airport, predicted the industry would start losing customers after this summer’s post-Covid rebound.

“Forward bookings have shown sustained strength and North Atlantic demand continues to grow. Fourth quarter bookings show no signs of slowing demand,” Gallego said.

The half-yearly accounts published show that the remuneration of the board of directors of IAG has increased from €1m to €2m for the first six months of the year, rounded to the nearest million euros.

IAG declined to disclose whether directors received a pay rise, but a spokesperson said the figure in 2021 was just under 1.5 million euros and that the rounded figures included an “adjustment of unfavorable exchange”. They said IAG would disclose the specific numbers in its full annual report.

The questions over directors’ pay came at a time when pilots are threatening to vote on salaries that were slashed during the pandemic and have yet to be restored to 2019 levels. BA has yet to fully resolve a dispute with the Unite and GMB unions over the pay of ground handlers, although strikes called over the summer period have been suspended pending a vote on an improved pay offer.

BA chief executive Sean Doyle did not rule out more disruption this summer due to labor disputes, but said the airline had made a “very fair” offer to Unite and GMB. He said the airline was in discussions with the pilots, adding: “We have different circumstances and starting positions for all of our task forces. We will work and dialogue with our pilots in the days and weeks to come. »

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