International Consolidated Airlines Group (LON:IAG) has announced its interim management report for the nine months to 30 September 2024.
Growing revenue, operating profit and operating margin; announcing a €350 million share buyback
Highlights
- Executing our strategy has driven very strong financial performance in the quarter:
- Increase in total revenue by 7.9%
- Increase in operating profit by 15.4% to €2,013 million
- Increase in operating margin by 1.4 percentage points to 21.6%
- Demand remains strong in all our core markets, supporting a 1.2% increase in passenger unit revenue
- Ongoing focus on improving our customer propositions and operational resilience
- Increased profitability supports significant free cash flow generation, investment and an increasingly strong balance sheet
- We are pleased to announce a €350 million share buyback
- We expect our strong financial performance to continue for the rest of the year
Luis Gallego, International Airlines Group Chief Executive Officer, said:
“We achieved a very strong financial performance in Q3 2024, with a 15.4% increase in operating profit compared to the same period last year and improving our margin to 21.6%. This is due to the effectiveness of our strategy and Group-wide transformation.
“We are also delivering on our commitment to provide sustainable returns for shareholders
“Demand remains strong across our airlines and we expect a good final quarter of 2024 financially.”
Financial highlights for the third quarter of 2024
- Total revenue growth of 7.9% mainly due to to higher passenger revenue, with an improvement in Cargo revenue and Maintenance, Repair and Overhaul (MRO) revenue at Iberia
- Passenger revenue per available seat kilometre (‘ASK’) for the third quarter was 1.2% higher than in the third quarter of 2023, despite an exceptionally strong comparative quarter in 2023. For the nine months to 30 September it has increased by 2.2%
- Non-fuel unit costs increased by 2.2%, as the benefits of transformation and capacity growth partially offset wage settlements and supplier inflation
- Fuel unit cost was down by 4.2% compared to the third quarter of 2023, reflecting the lower effective fuel prices net of hedging and the benefit of IAG’s ongoing deliveries of more efficient aircraft
- Operating margin for the third quarter was 21.6%, a 1.4 percentage point increase compared with the third quarter in 2023, with a 5.4 percentage point improvement in the British Airways margin
- Profit after tax of €1,435 million for the third quarter, an increase of 17% compared to €1,230 million in Q3 2023
- Net debt at 30 September reduced to €6,189 million (31 December 2023: €9,245 million; 30 September 2023: €8,009 million) and net debt to EBITDA before exceptional items reduced to 1.0 times
Summary
- Longer term we see positive, sustainable demand for travel
- We remain focused on executing our strategy to deliver world-class margins and returns
- We take a disciplined approach to capital allocation. We expect to generate significant free cash flow, invest in the business and
maintain a strong balance sheet - International Airlines Group are pleased to announce a €350 million share buyback
- For our shareholders we are committed to sustainable value creation and cash returns
