IAG profits up 56% due to ‘strong demand across all routes’

British Airways owner IAG said its profit rose by 56% in the three months to the end of September as bosses hailed strong performances on its North and South Atlantic routes.

The business said pre-tax profit rose from just over one billion euro (£879 million) in the third quarter of last year to 1.6 billion euro (£1.4 billion) in the most recent quarter.

Flight capacity was up 17.9% and revenue rose 18.0% to 8.6 billion euro (£7.5 billion) during the period, IAG said.

We saw sustained strong demand across all our routes

The cost of fuel dropped 6.2% compared with a year ago while revenue per passenger rose 2.2% and is up by almost a quarter since 2019.

IAG reduced its gross debt by 2.4 billion euro (£2.1 billion) to 17.2 billion euro (£15.0 billion) in the three months to the end of September.

Chief executive Luis Gallego said: “This quarter represents a record third-quarter performance for IAG. This is allowing us to invest in the business and reduce a significant amount of our debt.

“During the third quarter we saw sustained strong demand across all our routes, in particular the North and South Atlantic and in all leisure destinations around Europe.

“We continue to develop our hubs of Barcelona, Dublin, London and Madrid, supported by our fleet deliveries and future orders.”

Mr Gallego said the Israel-Hamas conflict has had an impact on revenue for flights to Cairo and Amman, the capitals of Egypt and Jordan respectively.

British Airways has suspended flights to and from Israel since October 11.

Mr Gallego told reporters: “We are very mindful of the geopolitical and macroeconomic uncertainties and in particular now the events that are happening in the Middle East.

“Regarding this terrible situation we see some limited revenue impact on flights to Cairo and Amman, and for sure Israel, but it’s too early to conclude if we’re going to have a wider strain and implications.”