A passenger airplane, operated by British Airways, a unit of International Consolidated Airlines Group SA (IAG).
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IAG‘s quarterly profit beat analyst forecasts by 40% and the British Airways parent company said the outlook for summer travel was encouraging, although it warned it was “mindful” of uncertainty in the wider economy.
IAG, which also owns Iberia, Aer Lingus and Vueling, did not on Friday provide an update on its full-year guidance. It had said in May it expected annual profit above the top end of a 1.8 billion euros to 2.3 billion euros range.
Leisure travel has boomed since pandemic restrictions ended last year, driving up ticket prices and helping deliver huge profits for airlines despite the squeeze on household incomes from high inflation and rising interest rates.
Air France-KLM on Friday also reported higher-than-expected quarterly earnings.
But there are early signs that that momentum could be slowing and the winter could be tougher.
IAG said in its statement that while there was no sign of weakness in forward bookings it was “mindful of wider uncertainties that might affect the full year.”
This week, Ryanair was cautious on demand for the rest of 2023, saying fares for passengers booking close to their departure dates softened from late June, while British airport Heathrow warned of a second-half slowdown.
IAG said it was 30% booked for the October-December period, which is typical for this time of year and for now its focus was on delivering resilient operations over the summer given the air traffic control and labour dispute challenges in Europe.
For the three months to the end of June, the group recorded an operating profit before exceptional items of 1.25 billion euros ($1.37 billion), compared to the 895 million euros analysts were on average expecting.