By Sarah Young and Federica Mileo
(Reuters) -British Airways-owner IAG and Air France-KLM on Friday reported bumper summer bookings as travellers pressed ahead with holiday plans despite a cost-of-living crisis.
IAG, which also owns Iberia, Vueling and Aer Lingus, said strong ticket sales for summer and a winter season that beat expectations meant 2023 profit would come in above its previous forecasts.
Its positive outlook is in line with other major European airlines. Lufthansa, easyJet and Ryanair have all pointed to robust summer bookings, showing consumers prioritising travel spend despite high inflation and an uncertain economic outlook.
Air France-KLM, meanwhile, reported better-than-expected first-quarter revenue and said it was seeing strong summer ticket sales too.
IAG called the outlook for the summer “encouraging” and said capacity in its key North Atlantic and Latin American markets was now back at pre-pandemic levels, with demand from leisure travellers driving bookings.
The group said it now expected annual profit to come in above the top end of a 1.8-2.3 billion euros ($2.0-$2.5 billion)range given in February. The top end of that range already represented a jump of as much as 90% on last year’s result.
For the three months to the end of March – often loss-making for airlines as fewer people travel then – IAG said high demand combined with lower fuel prices helped it turn a profit.
It made an operating profit before exceptional items of 9 million euros, well above the 179 million euro loss expected by analysts.
Air France-KLM’s first-quarter revenue rose 42% year-on-year to 6.33 billion euros, just above the 6.30 billion expected on average by analysts polled by the company.
In another indication that travel is returning to pre-pandemic levels, Holiday Inn owner IHG Plc reported a 33% jump in first-quarter revenue per available room (RevPAR) – a key measure for a hotel’s top-line performance.
Hotel operators are benefiting from China lifting its COVID-19 restrictions, boosting travel throughout the Asia Pacific region.
($1 = 0.9058 euros)
(Reporting by Sarah Young and Federica Mileo; Writing by Matt Scuffham; Editing by Andrew Kate Holton and Mark Potter)
