BA owner returns to profit after return from Covid. International Airlines Group

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The owner of British Airways has bounced back on a €1.25bn (£1.1bn) profit in 2022 and said the figure could almost double in the coming year as leisure and business travel takes a hit ahead of the coronavirus pandemic.

International Airlines Group (IAG), which posted losses of almost €11bn in 2020 and 2021 as Covid crippled the aviation industry, said revenue tripled last year to almost €23bn as the lifting of restrictions eased And travel boomed.

“2022 was set to be a year of strong recovery, driven by continued holiday demand and the reopening of markets,” said Luis Gallego, IAG chief executive. “At this point of the year we continue to see strong forward bookings while being mindful of global macroeconomic uncertainties. We are transforming our businesses with the intention of returning IAG to pre-Covid profitability levels over the next few years.”

The company, which also announced a €400m deal to acquire the 80% of Air Europa it did not already own, said it forecast an operating profit of between €1.8bn and €2.3bn this year Has been

“However, we are mindful of the uncertainty in the macro environment and fuel and non-fuel cost inflation,” it said.

IAG said capacity reached 78% of pre-Covid levels last year – rising to 87% of 2019 levels in the final quarter – with a strong recovery in the holiday market, while business-related travel was “steadily improving”. Is.

However, with oil prices being higher due to the Russia-Ukraine war, the company said aviation fuel unit prices are 30% higher than in 2019, with costs rising from €1.78bn to €6.1bn a year.

Headline inflation at a 40-year high has also pushed up non-fuel unit costs by a quarter compared to pre-Covid levels. Employee costs rose from €3bn to €4.6bn, while handling, catering and other operating costs more than doubled from €1.3bn to €2.97bn.

IAG’s total costs almost doubled from €11.2bn to €21.8bn between 2021 and 2022.

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Despite rising costs, Gallego said the airline group is confident of returning to pre-Covid-19 levels of operating profit in the next few years.

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