British Airways owner IAG sees return to profit in Q2

Bloomberg

British Airways owner IAG SA said it should turn profitable from the second quarter, joining other European carriers in predicting a travel rebound in coming months.
While IAG, which also owns Spain’s Iberia and Aer Lingus of Ireland, sees a “significant” loss this quarter, bookings are now running at 85% of pre-pandemic levels as concerns about the omicron variant of Covid-19 fade, it said in a statement.
“Demand slowed down for very near-term trips following the emergence of Omicron in late November,” CEO Luis Gallego said. “However, bookings have remained strong for Easter and summer 2022 having picked up in the New Year.”
The group predicted a profit for 2022 as a whole assuming no setbacks from the pandemic or material impact from the conflict in Ukraine, after posting a smaller than expected adjusted operating loss for 2021 of 2.97 billion euros ($3.3 billion).
IAG’s markets are beginning to revive after its global reach led it to be hit harder by the pandemic than short-haul rivals like Ryanair Holdings Plc. British Airways has seen a boost from the reopening of North Atlantic routes, though long-haul demand remains subdued elsewhere with some Asian countries still effectively closed to travel.
IAG plans to operate almost two-thirds of 2019 capacity in the first quarter, increasing to 85% for the full year after what Gallego said should be a “robust summer.” Seating should return to pre-pandemic levels by the second quarter in Europe and the third on North Atlantic markets, he said on a conference call.
Among IAG’s full-service rivals, Air France-KLM said it would offer up to 78% of pre-pandemic capacity in the first three months, without disclosing the full-year plan. Deutsche Lufthansa AG reports results next week.
Virgin Atlantic Airways, BA’s biggest competitor at London Heathrow airport, said it will reinstate its full 11-city US network from next week with the resumption of flights to Seattle and Washington. It will also add frequencies to New York, Los Angeles, San Francisco, Atlanta and Orlando.
The CEO said that IAG is still talking with Air Europa on ways to collaborate after it dropped a takeover of the Spanish long-haul leisure carrier. He said that while owner Globalia is considering options with other European carriers IAG’s strength in Spain makes it the best suitor.