Demand for travel has bolstered International Airlines Group‘s (IAG) performance in the first quarter, with passenger revenue per available seat kilometre (ASK) rising by 4.4% compared to the same period in 2023. This increase was attributed to the timing of Easter and a robust recovery in leisure traffic, although business travel showed slower signs of recovery.
Non-fuel unit costs saw a 3.7% rise compared to the first quarter of 2023, driven by investments in the business and wage settlements agreed upon during 2023. However, fuel unit costs decreased by 4.9% due to lower average fuel prices and more efficient aircraft deliveries.
The operating margin before exceptional items stood at 1.1%, with a loss after tax of €4 million, a significant improvement from the €87 million loss reported in Q1 2023. Additionally, net debt reduced to €7.4 billion from €9.2 billion at the end of December 2023.
IAG increased capacity in the North Atlantic region by 0.6%, with Aer Lingus, British Airways and Iberia showing incremental growth. Unit revenue rose by 6.5% with strong demand from both business and leisure segments.
The group continued to invest in the Latin America and Caribbean region, achieving overall capacity growth of 14.4% in the first quarter. Capacity growth to Europe was 9.0%, with robust demand for travel between major European cities driving unit revenue growth of 5.7%.
In the Domestic region (Spain and UK), capacity growth was 6.5%, mostly through Iberia and Vueling, resulting in a 6.9% increase in unit revenue.
However, challenges persisted in the rest of the world. Capacity to the Africa, Middle East and South Asia region increased by 0.4%, but unit revenues declined by 3.4% due to conflicts in the Middle East. Capacity to the Asia Pacific region increased by 43.4%, leading to a 12.6% decline in unit revenue, primarily due to the annualisation of British Airways' route restoration in 2023.
