IAG shares takeoff as British Airways owner forecast windfall profits

IAG shares liftoff as British Airways owner forecasts £1billion windfall profit after spike in bookings

  • News of the bumper results sent IAG share price up as much as 10%, trading at a high of 110.53p just after midday on Thursday
  • The company will announce its consolidated results for the nine months to September 30, 2022 on October 28
  • IAG shares also saw a rise earlier in the week as Heathrow regained its status as Europe’s busiest airport

British Airways owner IAG is expecting a bumper third quarter profit after a strong period of bookings.

The London-based company told investors Thursday afternoon that it expects operating profit for the period of around £1 billion (€1.2 billion).

The unexpected announcement sent IAG stock price up as much as 10%, trading at a high of 110.53p just after midday on Thursday, before stronger-than-expected US inflation data reduced half the winnings.

British Airways owner IAG has revealed it expects third quarter profits due to bumper bookings

Looking ahead, BA said in a statement: “Forward bookings remain at expected levels for the time of year, with no indication of weakness, and therefore our expectations for the fourth quarter remain unchanged at this time. .”

The company will announce its consolidated results for the nine months to September 30, 2022 on October 28.

Commenting on IAG’s impending third quarter results, Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “Despite the endemic cost of living pressures facing consumers, the British Airways ticket office remained very busy. , it seems.

“IAG has been one of the hardest hit carriers since the pandemic, with long-haul and business travel taking much longer to return to pre-covid levels than its short-haul counterparts.

Despite the buoyant numbers, Lund-Yates warned that the cost of living crisis could impact the overall outlook.

She said: “There is still a long way to go before the champagne can be blown. Consumer behavior has yet to fully adapt to a world of higher inflation and increased costs.

“If spending begins to moderate, the strong futures order book could well come under pressure. Then there’s the matter of IAG’s jaw-dropping pile of debt, following huge liabilities incurred to weather the worst of the pandemic storm.

“Ultimately, this upgrade from expectations is a very nice surprise, but whether the lively background music can be sustained is another question altogether.”

British Airways owner International Consolidated Airlines Group (IAG) saw its share price climb 1.12% to 102.88 pence.

British Airways owner International Consolidated Airlines Group (IAG) saw its share price climb 1.12% to 102.88 pence.

IAG Shares got another boost earlier in the week as Heathrow regained its status as Europe’s busiest airport.

The west London airport said on Tuesday it was used by more passengers between July and September than rivals in cities including Paris, Amsterdam, Frankfurt and Madrid.

The news helped boost the share price of a number of airlines operating out of the UK.

A year ago, Heathrow blamed the UK’s relatively strict coronavirus travel rules for falling in the rankings to become Europe’s 10th busiest airport, after being number one in 2019.

Heathrow has seen an increase in usage since UK travel restrictions were lifted in March.

Some 5.8 million passengers passed through Heathrow in September. But demand last month was still 15% below pre-virus levels in September 2019.

The airport insisted that the outlook for future demand “remains uncertain”.

This is due to “increasing economic headwinds, a new wave of Covid and the escalating situation in Ukraine”.

He added: “However, we expect the peak days over Christmas to be very busy.”

Heathrow said the “vast majority” of passengers traveling through the airport this summer “have had a very good experience”, as a cap on the number of departing travelers “succeeded in keeping supply and demand in balance”.

This follows long queues and baggage handling problems in early July, which were blamed on understaffing.

The cap will be lifted on October 29.

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