IAG says recovery being led by long-haul, expects return to profit in 2022
The owner of British Airways and Iberia says a significant demand recovery is underway, led by long-haul bookings, and it expects to return to profit in 2022.
International Airlines Group (IAG) (IAG), which also owns Aer Lingus and Vueling, said new bookings for transatlantic travel are close to 100% of 2019 levels. Long-haul bookings are recovering faster than short-haul over the winter, the group said.
British Airways is aiming to fully restore its North Atlantic network by the third quarter of 2022, while Iberia is planning full restoration of North American routes by the second quarter of 2022.
“We continue to see more and more evidence of built up travel demand when restrictions are lifted,” IAG CEO Luis Gallego said on November 5, 2021 after the group reported third quarter results. He described the easing of travel restrictions to the United States as “a very important day” for IAG.
“Long-haul is not only driven by the US, but winter sun destinations,” Gallego added on a call with analysts, citing strong demand for Latin America too.
The CEO said British Airways was still working on plans for a new short-haul unit at Gatwick. The airline has reached agreement with pilots but requires approval from other employee groups.
Turning to aircraft orders, chief financial officer Steve Gunning said IAG would require additional short-haul aircraft from 2024 or 2025 and that it was important for IAG to have competition between Boeing and Airbus.
IAG agreed a letter of intent with Boeing for 200 737 MAX agreement but has never firmed it up into an order.
In the third quarter of 2021, IAG made an operating loss before exceptional items of €485 million ($560 million), down from €1.305 billion ($1.506 billion) a year ago, thanks to returning demand for travel. Cargo also reported record revenue for the quarter, with bottlenecks in supply chains driving demand for air freight.
The group predicts an operating loss before exceptional items of €3 billion ($3.5 billion) for 2021.
“For next year, we are very confident we can return to profitability,” Gallego said.
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