The International Airlines Group posted a dramatic rise in profits for the year¡¯s first quarter, but noted in its earnings report published today (10 May) that business travel recovery continues to lag behind leisure.

The parent company of British Airways, Iberia, Aer Lingus, LEVEL and Vueling recorded an operating profit of €68 million in the three months ending 31 March, up from €9 million for the same period in 2023, while revenue increased 9.2 per cent year on year to €6.4 billion. The company also significantly reduced its after tax loss to?€4 million, down from €87 million posted in 2023.

Passenger revenue for the quarter increased by €591 million (11.7 per cent) year on year to €5.6 billion, driven largely by leisure demand and the earlier timing this year of the Easter holiday.

IAG said leisure travel demand across its airlines ¡°remains strong¡±, while business traffic is ¡°recovering more slowly¡±. The group also flagged the impact of geopolitical tensions and conflicts on business travel among its principal risks during the quarter.

Group capacity increased 7 per cent year on year, while load factor increased 1.6 percentage points to 83.1 per cent. Revenue per available seat kilometres (ASKs) also increased 4.4 per cent.

IAG chief executive Luis Gallego, said: ¡°Our transformation initiatives and increased demand, including over the Easter holidays, have delivered another very good set of results with improvements to both revenue and operating profit.

¡°Investment across the Group in transformation is delivering encouraging improvements in punctuality and customer experience at our airlines,¡± he said in a statement.

Capacity growth across Europe was 9 per cent higher than in 2023, with increases largely at Aer Lingus, British Airways and Iberia ¨C the latter, in particular, saw an impressive 15.4 per cent year-on-year rise in capacity due to an additional six Airbus A350-900 aircraft flying to North and South America compared to Q1 2023.

In the North Atlantic region, capacity increased 0.6 per cent and unit revenue grew by 6.5 per cent, with IAG noting ¡°good demand¡± in both the business and leisure segments.

While core markets in Europe and the US performed well, the group said the rest of the world ¡°is currently more challenging¡±. Capacity to the Africa, Middle East and South Asia region increased by 0.4 per cent in the quarter and unit revenues declined by 3.4 per cent, largely due to conflict in the Middle East.

Capacity to the Asia Pacific region increased 43.4 per cent, however this accounts for just 3.7 per of overall group capacity, and reflects the gradual restoration of British Airways¡¯ long-haul network.

Gallego said IAG is ¡°well-positioned for the summer¡± and expects long-term travel demand to remain high.

The group also said it is ¡°making progress¡± towards its proposed acquisition of Spanish carrier Air Europa after presenting a package of remedies to the European Commission and expects the process to be complete later this year.