International Airlines Group (IAG) reported its 2023 full-year financial statements, showing growth across its airline brands thanks to the widespread passenger level recovery across the industry.
The Group’s total revenues grew nearly 28% year-on-year, with the majority produced by its passenger operations. IAG reported a decrease in revenues from its cargo business.
Costs also rose by 19% on the year, but the Group’s profits after tax were €2.65bn ($2.86bn) compared to just €431m ($466m) in 2022.
The results mark IAG’s full recovery from the falls in revenue and profits of the pandemic-affected years, with operational profits reaching $3.7bn, up from $3.4bn in 2019.
The reason for the increases is clear, with 22% more Available Seat Kilometres (ASK), and nearly 28% more Revenue Passenger Kilometres.
IAG airlines flew 115m passengers in 2023, a 22% growth on the year previous. “Capacity was almost fully restored to 2019 levels by the end of the year, reaching 98.6% of 2019 levels in the final quarter,” the Group explained.
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Split by brand, LEVEL had the largest ASK growth (year-on-year) followed by British Airways and Aer Lingus.
But LEVEL and British Airways both had lower ASK compared to 2019. The Group said the BA numbers were impacted by “the accelerated retirement of its Boeing 747-400 fleet during the COVID-19 pandemic.”
Spanish brand LEVEL was affected by a change of business plan, with flights from Paris Orly scrapped in 2020 but Barcelona operations scaled up by 32%.
IAG, in its note to investors, explained its Spanish and Atlantic businesses drove the success despite increasing costs.
“The Group was able to substantially restore its capacity compared with 2019 and saw recovery in all its businesses, with particular strength in Spain and the North and South Atlantic. Fuel costs were substantially higher than in 2019 and the Group also faced higher supplier cost inflation.
“The Group was able to successfully offset both of these challenges through its high-quality and increasingly diverse revenue stream,” it said.
Looking forward, CEO Luis Gallego, said IAG and its brands would aim for “sustainable growth”.
“In 2024, we will execute on our strategy, building long-term value into the business. We will focus on strengthening our core airline businesses and on developing IAG Loyalty and our other asset-light growth opportunities, and we will do this while operating under a strong financial and sustainability framework,” he said.
“Our airlines operate in the largest and most attractive markets globally and we will continue to invest in our brands to transform the business, improve the customer experience and support the delivery of sustainable growth and world-class margins.”
