International Aviation Group (IAG) reported an operating profit of €1,208 million for the third quarter of 2022 and an operating profit of €770 million for the first nine months of 2022. The Group’s total liquidity at the end of Q3 increased to €13,488 million.
Luis Gallego, IAG Chief Executive Officer, said: “We achieved another strong performance in the third quarter, with an operating profit of €1.2 billion and liquidity of over €13 billion. All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover.”
Despite the restrictions imposed at London Heathrow airport and the Asia Pacific network remaining substantially closed, the group posted total revenue of €7,329 million, 0.9% higher than in 2019. Also, the passenger unit revenue increased in by 21.9% as of 2019. By the end of Q3, IAG reported a full recovery of the premium leisure revenue 2019’s level, despite capacity being significantly lower.
“Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily,” Luis added.
On September 30, 2022, the Group had total liquidity of €13,488 million, up from €11,986 million on December 31, 2021, comprising cash and interest-bearing deposits of €9,260 million, €3,259 millions of committed and undrawn general facilities, and a further €969 millions of committed and undrawn aircraft-specific facilities.
The Group successfully raised finance since the outbreak of COVID-19, having financed all aircraft deliveries in 2020 and 2021, and continued to successfully finance aircraft in the nine months to September 30, 2022.
During Q3 the Group extended the availability of its $1,755 million revolving credit facility by one year to March 2025.
The Group’s cash balance of €9,260 million on September 30, 2022, was up €1,317 million on December 31, 2021. During the nine months, 20 Airbus aircraft were delivered, together with one Boeing 787-10, of which 13 were financed by the end of September.
In the first nine months of 2022, IAG capacity, measured in available seat kilometers (ASKs) reached 75.3% of that operated in the first nine months of 2019. Capacity steadily increased through the period, with Q1 at 65.1% of 2019, Q2 at 78.0% of 2019, and Q 3 at 81.1% 2019.
The Group’s operating profit for the period was €770 million, an improvement of €3,257 million versus 2021. Excluding exceptional items, the operating profit improved by €3,404 million as against Q3 of 2021.
IAG reported a Net debt as on September 30, 2022, to be €11,058 million, down €609 million from December 31, 2021.
IAG expects its 2022 pre-exceptional operating profit to be approximately €1.1 bn. Net cash flow from operating activities is expected to be significantly positive for the year. This assumes no further setbacks related to COVID-19 and material impacts from geopolitical developments. Net debt is expected to increase by year-end, linked to seasonal booking patterns and capital expenditure associated with aircraft deliveries in Q4.