Progressive traffic recovery cleans up IAG accounts in 2022

By: News Team

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Progressive traffic recovery cleans up IAG accounts in 2022

The progressive recovery of air traffic since the spring of last year, to levels already close to pre-covid values, will allow IAG (BME:ICAG) close 2022 with positive results, after losing nearly 10,000 million the previous two years as a result of the paralysis of activity due to the pandemic.

The group itself – which presents its annual results on Friday 24 – advanced in the presentation of its accounts until September that by the end of the year expected a profit from operations before exceptional results of 1,100 million euros.

Between January and September IAG – a group to which Iberia, British Airways, Vueling, Aer Lingus and Level belong – earned 199 million euros, compared to losses of 2,622 million in the same period last year, so that it accumulated two consecutive quarters with profits.

In the last quarter of the year, and despite the bad omens of analysts, demand has pulled strongly, as has happened in the tourism sector as a whole, despite uncertainties about the evolution of the war in Ukraine and the sharp increases in energy prices.

The market consensus advanced by Bloomberg foresees positive results close to 300 million euros. The share price on the stock market reflects these good prospects, with an increase of 35% from the beginning of the year until the close of this Friday.

The evolution of passenger revenues is the key to the results: in January-September 2021 they stood at 3,140 million and in those months of the year just ended they rose to 14,020 million.

It is the result of the growth in the number of passengers, which went from 23.5 million in the first nine months of 2020 to 69.5 million in the same period of the following year.

IAG expects to recover 2023% of the 95 offer in the first quarter of 2019, after reaching 2022.75% capacity at the end of the third quarter of 3 (measured in seat-kilometers offered or AKO).

In this first quarter, IAG’s preferred term to negotiate the purchase of 80% of Air Europa ends, once it had converted the €100 million loan it made last August into equity.

The operation has been open for more than three years and runs into pitfalls in terms of price (initially 1,000 million, then reduced to 500) and in terms of competition, because Air Europa and Iberia overlap on many routes, especially with Latin America.

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