Profit statements

Airline group AIG expects to return to profit this year as passenger numbers rise

Airline group AIG reported an increase in passenger numbers in the first three months of the year as pandemic-related restrictions eased and business travel rebounded.

Chief executive Luis Gallego said the group expects to return to profit in the second quarter and for the full year.

In its consolidated results for the year to March 31, AIG said the lifting of Covid measures, particularly in the UK, has seen a “sharp increase in capacity” at British Airways and Heathrow Airport. .

The group said in a statement that it had seen “no noticeable impact” from the war in Ukraine.

AIG announced an operating loss of 731 million euros in the first quarter, 32% less than the loss of more than one billion euros (restated) recorded in the same period last year.

Losses after tax and exceptional items amounted to 787 million euros in the first quarter, down almost 27% on the more than 1 billion euros recorded in the first three months of 2021.

Total revenues amounted to €3.4 billion for the first quarter, with passenger revenues of €2.6 billion.

The adjusted loss per share fell to 16.3 cents, more than a quarter lower than losses per share in the first quarter of 2021.

Passenger capacity in the first three months of 2022 was 65% of 2019 capacity, down from 58% at the end of December.

It forecasts full-year passenger capacity of around 80% of 2019 levels.

Cash stood at 8.2 billion euros at the end of March, up by 241 million euros since December 2021, with “a markedly positive working capital, driven by reservations for the rest of the year”, AIG said.

Cash was impacted by the financing of five Iberia aircraft, which were delivered and paid for in the first quarter but are not expected to be drawn until the second.

Aircraft finance facilities increased to €4.2bn from just over €4bn in December due to a €200m loan facility for Aer Lingus from the Irish strategic investment.

It brought total liquidity to 12.4 billion euros.

“Demand is recovering strongly in line with our previous expectations. We expect to be profitable from the second quarter and for the full year,” said IAG CEO Luis Gallego.

“Premium leisure continues to be the best performing segment and business travel is at its highest level since the start of the pandemic.

“The group’s operating loss decreased significantly in the first quarter compared to last year, with our losses reflecting normal seasonality, the impact of Omicron and the costs associated with the ramp-up of operations.

“Globally, the travel industry is facing challenges due to the biggest increase in operations in history and British Airways is no exception. The welcome removal of strict travel restrictions from the UK, combined with a strong pent-up demand, has contributed to a strong increase in capacity. The airline is currently focused on improving operations and customer experience and building operational resilience.”