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IAG’s financial performance has resulted in a loss in the three months up to 31^st March The company remains in the red for the first quarter of its financial year having made a loss in the first quarter of as well. On a positive note, IAG’s financial performance has improved when compared to the same time last year. In the first quarter of , IAG made a loss of 87 million euros. However, in the first quarter of , the company made a loss of 4 million euros, a % improvement on the first quarter of This shows that even though IAG’s financial performance for this quarter is still in the loss zone, it is making progress.

Financial Setbacks

The situation has not been easy for any airline at the moment. During the pandemic, IAG’s financial performance suffered along with many other airlines as governments around the world restricted international travel to curb the spread of Covid, and demand for air travel slumped. Even after restrictions were lifted the situation did not improve as airlines and airports were short-staffed as a result of layoffs when demand was less. As we know, this resulted in mass flight delays and congestion at airports until the authorities introduced mandatory restrictions. To make matters worse, the Russian invasion of Ukraine and the more recent Israel-Gaza conflict have also caused issues with disruption to flight paths and hikes in fuel prices.

British Airways, a subsidiary of IAG, was one of those airlines that took the initiative and reduced flight numbers themselves before mandatory restrictions came in. It does appear that this sort of action paid off with IAG making a profit at year-end in both and with a dramatic improvement of over 6 times between and However, the first quarter profits remain stubbornly in the loss zone. The good news however is that the situation is at least improving.

In terms of revenue, IAG’s financial performance has improved when compared to the same time last year.  In the first quarter of , the company made billion euros which was % higher than the previous year at the same time when IAG’s financial performance resulted in a revenue of billion euros. The fact that IAG’s revenue increased by % but the loss reduced by % indicates that cost control has improved in the first quarter of when compared to the same period in the previous year.

Outlook

Luis Gallego, Chief Executive Officer of the company has responded to IAG’s financial performance, in a very positive way. He comments that there has been an improvement in the company’s revenue. In addition, he adds that efforts to transform the business, which he discussed wanting to do in the financial report for the year-end results, have reaped rewards for the company with improvements in punctuality and customer experience across its airlines. He also adds that IAG is well positioned to perform this summer with the company report also saying that it expects a positive long-term sustainable demand for travel.

As one can see the company is optimistic in terms of its response to IAG’s financial performance in the first quarter of It also has a positive outlook. However, although IAG’s financial performance has improved when compared to the same time last year, it is still languishing in the loss zone. We have to wait to see how this progresses.

What do you think about the progress IAG is making? Do you think they can turn a profit entirely by the end of the year? Share your thoughts in the comments below!