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HomeLatest NewsThe recovery of air traffic after Covid cleans up IAG's accounts in...

The recovery of air traffic after Covid cleans up IAG’s accounts in 2022

Date: March 24, 2023 Time: 09:38:24

Three years after the start of the pandemic, with hardly any restrictions and with the imminent opening of China, air traffic is gradually recovering and already reaching pre-Covid levels. This total recovery of ‘normality’ will allow IAG to close 2022 with positive results, after losing close to 10,000 million in the two previous years as a result of the stoppage of activity due to the coronavirus.

The group itself – which presents its annual results on Friday the 24th – advanced in the presentation of its accounts until September, when by the end of the year it expected a profit from operations before exceptional results of 1,100 million euros.

Between January and September, IAG, the parent company of Iberia, British Airways, Vueling, Aer Lingus and Level, earned 199 million euros, compared to losses of 2,622 million in the same period last year, thus accumulating two consecutive quarters with revenue.

In the last quarter of the year, and despite the bad omens from analysts, demand has grown strongly, as has happened in the tourism sector as a whole, despite the uncertainties about the evolution of the war in Ukraine and the strong energy price rises.

positive results are prevented

The market consensus that Bloomberg advances foresees positive results close to 300 million euros. The share price on the stock market reflects these good prospects, with an increase of 35% from the beginning of the year to the close of this Friday.

The evolution of revenue per ticket is the key to the results: in January-September 2021 they stood at 3,140 million and in those months of the year just ended they rose to 14,020 million. It is the product of the growth in the number of passengers, which went from 23.5 million in the first nine months of 2020 to 69.5 million in the same period of the following year.

IAG is confident of recovering 95% of the 2019 offer in the first quarter of 2023, after reaching 75.3% capacity at the end of the third quarter of 2022 (measured in offered seat-kilometres or AKO).

Purchase of Air Europa

In this first quarter, the preferential term available to IAG to negotiate the purchase of 80% of Air Europa ends, once the loan of 100 million euros that it made last August had been converted into capital.

The open operation has been going on for more than three years and runs into obstacles in terms of price (initially 1,000 million, later reduced to 500) and in terms of competition, because Air Europa and Iberia overlap on many routes, especially with Latin America.

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.

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