IAG hopes to close the deal with Air Europa in less than five months

Five months. It is a term in which the CEO of International Airlines Group (IAG) – the group to which they belong, among others – Iberia, British Airways and Vueling– Luis Gallego. The the differences concern the price. The 500 million agreed with the airline of the group chaired by Juan José Hidalgo (reduced from the initial 1,000) “may be a little for Globalia and a lot for us,” so it will be necessary to find “something that works for both of us,” Gallego said in presentation of results.

Iberia has period of exclusivity in the negotiations with Air Europa, which expire at the end of the first quarter of next year, and at this moment he wants to conclude an agreement that will later have to be analyzed by the authorities for the protection of market competition, which will last about a year. Gallego insisted that after 100 million loan to Air Europe euros, awarded last March, which later became 20% of the capital, in August IAG continues negotiations on taking over 100% of the company and thus strengthens the “hub” (air traffic distribution center) of Madrid.

IAG confirmed the exit from the Covid crisis and earned 199 million

IAG this Friday scored a benefit between January and September of 199 million euros, compared to losses of 2,622 million in the same period last year, and it has already accumulated two quarters of profits. As reported by the group – which includes both Aer Lingus and Level – to the National Securities Market Commission (CNMV), the improvement in results is the result of an increase in revenue per passenger, from 3.140 million a year ago to 14.020 million by last September. Adding freight derivatives, it grows to 16,680 million (4,921 million a year earlier).

in third trimester The airline group recorded a profit of 853 million euros (losses of 574 million in the same period in 2021), adding to the black figures for two consecutive quarters, as a result of improved traffic after the pandemic, and despite headwinds including rising costs and high inflation. For the end of the year, IAG expects an operating profit before exceptional results of 1.1 billion euros.

Aircraft occupancy increased to 87%

The progressive recovery normality caused IAG airlines to transport 69.5 million passengers between January and September, significantly more than 23.5 million in those months of 2021, with greater dynamics in the premium holiday segments and in business travel. In addition, capacity (measured in offered seat-kilometers or ASK) reached 75.3% in the first nine months of 2021with rising rates throughout the year allowing for a recovery of 81.1% of 2019 capacity at the end of the third quarter.

Accordingly, the aircraft load factor also improved significantly, from 60% a year ago to 81.3%, a figure that increased to 87% in the third quarter. IAG hopes to recover 95% of 2019 capacity, before the pandemic, in the first quarter of 2023, but is not reporting figures for the whole of next year due to macroeconomic uncertainties.

Iberia earned 246 million, and Vueling 259 million

Iberia recorded a profit of 246 million euros in the third quarter of the year (just 29 million below 2019), and passenger revenue is up 5% on pre-Covid figures, although capacity is still 16% below that time. President of Iberia, Javier Sanchez-Prietohe assured in the presentation of the results that by 2023-2024 will not resume flights with China and Japan because, although in the latter case the borders are already open, demand is still “weak”.

What it is recovering more strongly in Latin and North America, where the Spanish company has all destinations open and is even opening new routes, such as connections to Washington and Dallas, both in the United States. Vueling, for its part, made a profit of 259 million euros in the third quarter (29 million less than in 2019).

British Airways is still a long way off pre-covid figures: between July and September it recorded a profit of 411 million, 223 million less than in the same period in 2019, which was partly influenced by the reduction in capacity at Heathrow airport.

The price of fuel is multiplied by four

The fuel bill of the group rose to 4,100 million euros, multiplying by four compared to the period from January to September 2021. IAG explains that the increase in fuel costs it is partially mitigated thanks to the protection policyalthough restrictions on access to these hedging instruments or on the ability to pass on price increases to customers “could affect” the group’s profitability.

The personnel costs amounted to 3,417 million, 62.8% more than in 2021. At the end of September, IAG had an average workforce of 58,077 people, 14.8% more than twelve months earlier. As of September 30, the group had total liquidity of EUR 13,488 million and a cash balance of EUR 9,260 million (1,317 million in December 2021). The Matica currently does not plan to distribute dividends because it prefers to focus on paying off the debt that was assumed to pay for the covid crisis, which totals HRK 11,058 million, HRK 609 million less than at the end of last year.


Analysts of Rent 4 point out results show “breakthrough” according to the levels from 2019, which are already harmonized in terms of income, noting that the capacity recovery is in line with the other two large European alliances (Lufthansa and Air France-KLM), and the high level of liquidity, good traffic development and the best capacity to generate money . At Bankinter, its analysts believe that the aviation sector is under the influence of the economic slowdown and the increase in the price level, along with the high price of oil, which “limits its attractiveness”.

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