Profit statements

BA owner IAG’s summer earnings beat expectations, no weakness in forward bookings

Oct 13 (Reuters) – British Airways owner IAG (ICAG.L) reported better than expected results for its key summer period due to strong demand and prices and said future bookings showed no sign of weakness, sending its shares soaring as much as 10%.

The company, which also operates airlines Iberia, Vueling and Aer Lingus, said it expects pre-exceptional operating profit to be around 1.2 billion euros (1 $.17 billion) for the three months ended Sept. 30, versus a loss during the pandemic last year.

European airline stocks have plunged over the past six months on fears that rising household bills will dampen appetite for travel, but IAG said it was confident about future demand.

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“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 group said in a statement.

Its shares jumped 10% to 109 pence after the unexpected announcement, which was likely released given that the third-quarter result was well above consensus of 779 million euros.

The full statement of results is expected to be announced on October 28.

Analysts noted that the strength of the dollar against the pound and the euro has recently led to an increase in the number of American visitors to Britain and Europe, helping IAG which has a large exposure to the transatlantic market.

($1 = 1.0272 euros)

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Reporting by Sinchita Mitra in Bengaluru and Sarah Young in London; Editing by Savio D’Souza and James Davey

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