British Airways Parent Company Set to Announce Record Profit Amid Strong Travel Demand
International Airlines Group expects a 15% rise in profit, bolstered by increased passenger numbers and lower fuel costs.
British Airways' parent company, International Airlines Group (IAG), is poised to report a significant increase in annual profit next week, attributable to a surge in passenger demand coupled with a decline in oil prices that has reduced operational costs.
IAG is expected to announce its annual results on February 28, forecasting a profit rise of 15%, reaching approximately 4.1 billion euros (£3.4 billion).
The past year has shown robust performance for the group, particularly during the critical summer season, despite challenges presented by widespread flight delays.
Alongside British Airways, IAG also operates Aer Lingus and other airline brands.
Analysts predict that sales will grow by 8%, totaling around 31.7 billion euros (£26.3 billion) compared to the previous year.
Contributing factors include a decline in fuel expenses, as lower global oil prices have positively impacted operational costs.
IAG previously disclosed a 4.2% decrease in its fuel bill before Christmas, partly due to the introduction of newer, more fuel-efficient aircraft into its fleet.
The load factor for the airline, which measures the percentage of available seating capacity that is filled with passengers, was reported at 89.9% in the last results released before Christmas.
Despite the favorable outlook, challenges persist for IAG, with industry scrutiny directed towards CEO Luis Gallego regarding predictions for consumer demand in the upcoming summer season.
German travel operator Tui has expressed concerns about slower growth in bookings, indicating potential difficulties for the travel sector in the months ahead.
Additionally, British Airways has recently encountered criticism over changes to its loyalty program, which transitioned from a distance and fare class-based points system to one based on the amount spent, allocating one point for every pound spent.
This modification, announced in late December 2024, has led some frequent flyer advocates to claim that the airline is distancing itself from the leisure travel market.
Industry analyst Michael Hewson from MCH Market Insights noted that there is a possibility that this shift in the loyalty program could affect the airline's relationship with its most devoted customers.
Nevertheless, IAG’s shares have seen a substantial increase, reportedly doubling in value over the past year, driven by a resilient travel industry.
IAG is expected to announce its annual results on February 28, forecasting a profit rise of 15%, reaching approximately 4.1 billion euros (£3.4 billion).
The past year has shown robust performance for the group, particularly during the critical summer season, despite challenges presented by widespread flight delays.
Alongside British Airways, IAG also operates Aer Lingus and other airline brands.
Analysts predict that sales will grow by 8%, totaling around 31.7 billion euros (£26.3 billion) compared to the previous year.
Contributing factors include a decline in fuel expenses, as lower global oil prices have positively impacted operational costs.
IAG previously disclosed a 4.2% decrease in its fuel bill before Christmas, partly due to the introduction of newer, more fuel-efficient aircraft into its fleet.
The load factor for the airline, which measures the percentage of available seating capacity that is filled with passengers, was reported at 89.9% in the last results released before Christmas.
Despite the favorable outlook, challenges persist for IAG, with industry scrutiny directed towards CEO Luis Gallego regarding predictions for consumer demand in the upcoming summer season.
German travel operator Tui has expressed concerns about slower growth in bookings, indicating potential difficulties for the travel sector in the months ahead.
Additionally, British Airways has recently encountered criticism over changes to its loyalty program, which transitioned from a distance and fare class-based points system to one based on the amount spent, allocating one point for every pound spent.
This modification, announced in late December 2024, has led some frequent flyer advocates to claim that the airline is distancing itself from the leisure travel market.
Industry analyst Michael Hewson from MCH Market Insights noted that there is a possibility that this shift in the loyalty program could affect the airline's relationship with its most devoted customers.
Nevertheless, IAG’s shares have seen a substantial increase, reportedly doubling in value over the past year, driven by a resilient travel industry.
