Airlines
British Airways owner IAG, Air France-KLM benefit from bumper summer travel
On Friday, British Airways parent IAG and Air France-KLM both announced record third-quarter operating profits, boosted by strong summer demand, particularly between Europe and North America.
However, the CEOs of both carriers have indicated that they will proceed with caution. While most airlines have suspended flights to Israel, which accounts for a modest portion of most major carriers’ revenue, some travelers are also avoiding surrounding countries such as Egypt and Oman.
“We are seeing some slight reduction in demand to some of the other destinations we serve around Israel,” said Chief Executive Officer Ben Smith on a conference call following the release of results that fell short of analysts’ expectations. According to the corporation, the war has had no material impact.
At 8:11 a.m. in London, IAG shares had increased by 4.3% and were 1.7% higher overall. This year, the stock has increased by 17% already. Competitor Air France-KLM also released numbers on Friday, revealing passenger, revenue, and profit figures for the third quarter that were marginally lower than forecast by analysts.
After hitting intraday lows earlier, Air France-KLM shares mostly recovered to close little changed at 5:06 p.m. in Paris. After plunging as much as 3.8% in London, IAG was down 0.5%.
During the period, IAG declared an operating profit of €1.75 billion ($1.85 billion). From a previous prediction of 100%, the business reduced its capacity objective for this year to 96% of pre-Covid levels for 2023.
