Fresh from announcing its planned full acquisition of Air Europa, International Airlines Group (IAG) reported a €1.25bn operating profit in 2022, leaving it with €431 million after tax.
The group, which counts Aer Lingus, British Airways and Iberia among its carriers, said the result was a "significant improvement" of almost €4.2bn on a loss-making 2021.
The group said it was back to 87% of 2019 pre-Covid capacity with passenger unit revenue up 11% on that year as ticket prices were increased on the back of 30% higher fuel costs and 24% higher non-fuel costs. What the group described as "adverse foreign currency movements" cost it just over €1,1bn, "mainly due to the strengthening of the US dollar against the euro and pound sterling".
Passenger revenue hit €19.45bn for 2022 and €5.4bn for the final three months, the latter almost as much as full-year revenue for 2021, as passenger numbers rose to over 94 million from 2021's 38.4 million. The passenger load factor for the year of 81.8 per cent was 17.3 points higher than in 2021 and only 2.8 points lower than in 2019, the group added.
Cargo revenue held at just over €1.6bn. Operating expenses of over €21.8bn were fuelled by a rise in fuel costs from €1.7bn in 2021 to over €6.1bn in 2022, while "employee costs" were up 54% to over €4.6bn.
The group said it invested €3.9bn during 2022, to boost fleet, IT and customer offerings, while cutting net debt to €10.4bn.
Liquidity was €14bn at year-end, up €2bn from a year before, and comprised cash, cash equivalents and interest-bearing deposits of €9.6bn, €3.28bn million of committed and undrawn general facilities, and a further €1.11bn of committed and undrawn aircraft-specific facilities.
The group said it "has been successful in raising financing since the outbreak of COVID-19, having financed all aircraft deliveries in 2020, 2021 and 2022" and that it was seeking to "secure aircraft financing on long-term arrangements". The group's fleet stood at 558 aircraft at the end of 2022, 27 more than one year earlier.
By the final quarter of the year, capacity was back to around 98% of 2019 levels at Aer Lingus and Vueling, almost 80% for British Airways and 93% at Iberia. Operating profit by carrier came to €382 million for Iberia, €303 million for British Airways, €187 million for Vueling and €45 million for Aer Lingus
The group said it expects "further recovery in profits" in 2023, giving a range of €1.8bn to €2.3bn, based on current exchange rates and jet fuel costs. Domestic capacities across the group topped 100%, with regions all between 75% and 85% with the exception of Asia-Pacific, which lagged badly at just over 11% as the region, led by China, reopened cautiously.
"At this point of the year we continue to see robust forward-bookings, while also remaining conscious of global macro-economic uncertainties. We are transforming our businesses, with the intention of returning IAG to pre-Covid levels of profit within the next few years, through major initiatives to improve customer experience and operational performance," said chief executive Luis Gallego.