Complete News World

The owner of Iberia and British Airways multiplies its profits by six in 2023

The owner of Iberia and British Airways multiplies its profits by six in 2023

The International Airlines Group achieved profits amounting to $2,665 million due to increased demand for travel as a result of increased capacity on both sides of the Atlantic.

International Airlines Group (IAG), owner of airlines Iberia, Vueling and British Airways, ended the 2023 financial year with profits of 2,655 million euros, multiplied by six times last year's figures, when they reached 402 million. It came close to the historic record of 2018, just before the pandemic, when it made a profit of $2.897 million.

Strong travel demand, especially in the leisure sector – which according to IAG was “strong and sustainable” – combined with the company’s internal transformation, led to an increase in operating margin from 5.4% at the end of 2022 to 11.9%. In 2023. Revenue per passenger grew 8.2% year over year.

At the same time, revenues rose by 27% to €29,453 million (€23,066 million in the previous year), unit costs fell by 4.4%, and net debt fell by €1,140 million to €9,245 million. Business growth and lower debt reduced its net debt-to-EBITDA ratio to 1.7 times, compared to 3.1 a few months ago.

In the presentation of the results published by the economic newspapers, IAG expects 2024 to be positive, with confidence in its ability to continue to generate significant cash flow (in 2023 it was 1,300 million euros), and to maintain a strong balance sheet, in line with what it has presented now. . To prove that the correct reading is underway, the group said that it has already reached, at this moment, 92% of the expected trading volume for the first quarter and 62% for the first six months of the year.

See also  A day of losses for Wall Street on the eve of the Fed's decision - Stock Exchange

Operationally, capacity increased by 22.6% year-on-year – accounting for the ability to respond to increased demand – supported by growth on both sides of the Atlantic. However, he says, this capacity is still 1.4% lower than in 2019. For this year, they hope to increase supply by another 7%, as a result of BA's increased long-haul flights and Iberia's greater flight schedules and connections. To Latin America. Therefore, 2024 included the standard offer.

More specifically, according to El Economista, the business in Spain with airlines such as Iberia, Iberia Express, Vueling and Liv generated operating profits of 1,400 million euros, just over a third of the total, which again places the country as a leading market. The main group.

For the next financial year, the company is focusing on developing the IAG Fidelidade loyalty program, which increased profits by 17% to €327 million and is able to generate significant amounts of cash and contribute to high profit margins.

Quoted by The Economista, the group’s CEO, Luis Gallego, revealed that 2024 will be the year to implement a new strategy designed for the long term. “We will focus on strengthening our businesses and developing demand fidelity, as well as seeking low capital-intensive growth opportunities. We will do this by operating within a strong and sustainable financial structure.

Recall that IAG admitted in the middle of last year to compete for the privatization of TAP, in parallel with the purchase of Air Europe, if the conditions set by the Portuguese government allow it and make sense for the company. “We will see what the Portuguese government considers in this process and analyze whether it is interesting for IAG,” Luis Gallego told EFE.

See also  World Bank Rejects Bitcoin, Refuses to Help El Salvador’s Cryptocurrency Scheme