British Airways owner confidence in long-haul flights with big move
While the airline group noted these new aircraft are 'mainly for replacement', as it revealed the orders this morning, it added that around one-third are for 'growth in IAG's core markets'.
IAG has today ordered 21 Airbus A330-900neo aircraft and 32 Boeing 787-10 planes for delivery from 2028 to 2033 for its 'medium-term long-haul fleet requirements'.
In addition to this, it revealed today that it had exercised options for six Airbus A350-900 aircraft for Iberia, six Airbus A350-1000 planes for British Airways and six Boeing 777-9 aircraft for British Airways.
IAG reported that it made operating profit before exceptional items of €198 million in the three months to March 'as strong revenue growth and a lower fuel price offset expected cost increases', up by €130 million from €68m in the first quarter of last year. Operating margin increased by 1.7 points to 2.8%
Revenues in the first quarter were up by 9.6% on the same period of last year at €7.044 billion.
IAG chief executive officer Luis Gallego seemed in upbeat form as he presented the results.
He said: 'Our strong first-quarter results reflect the performance of our businesses and the effectiveness of our strategy and transformation. We continue to deliver on our industry-leading financial targets.'
Mr Gallego added: 'We remain focused on strengthening our broad portfolio of market-leading brands across our core markets of the North Atlantic, Latin America and intra-Europe. We continue to see resilient demand for air travel across all our markets, particularly in the premium cabins and despite the macroeconomic uncertainty.'
IAG revealed: 'Latin America and Europe continue to be strong and the North Atlantic demand has been robust, with strength in our premium cabin mitigating some recent softness in US point-of-sale economy leisure.'
It declared that, as of May 6, it was 'around 80% booked for the second quarter, with revenue ahead of last year, and 29% booked for the second half, broadly in line with last year'.
Aarin Chiekrie, equity analyst at stockbroker Hargreaves Lansdown, said: 'IAG has been delivering for both passengers and investors alike after landing a big profit beat in the first quarter. The group's market-leading networks, strong brands, and fierce operational focus continue to drive performance skyward. Profitability's also getting a helping hand from falling fuel costs.'
He added: 'IAG shows no signs of slowing, and demand for its routes remains strong despite the current pressure on consumers' incomes. Tariffs had been weighing on sentiment towards the travel sector. But with 80% of flights for the second quarter already booked, the outlook is brighter than many expected. That's also given IAG the confidence to place orders for 53 new Airbus and Boeing aircraft, which will be delivered between 2028 and 2033, highlighting the group's confidence in the longer-term picture for the travel industry.'
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