Half Year 2024 International Consolidated Airlines Group SA Earnings Call Transcript
Key Points
- International Consolidated Airlines Group SA (BABWF) reported a strong performance in the first half of 2024 with a profit of over EUR1.3 billion, an increase of EUR49 million compared to the previous year.
- The company saw strong demand for travel in core markets such as North America, Latin America, and Intra Europe, resulting in a positive unit revenue growth of 2.9%.
- British Airways delivered a strong revenue performance with an operating profit improvement of GBP59 million and an increase in operating margin to 8.2%.
- IAG Loyalty showed a good performance with an operating result of GBP193 million, up GBP23 million year on year, and a margin of 18%.
- The company's balance sheet continues to strengthen, with a reduction in net debt to EUR6.4 billion and an improvement in leverage to 1.1 times.
- Aer Lingus faced challenges in the first half with a profit of only EUR9 million, impacted by competitive pressure from US carriers and industrial action by its pilots.
- Iberia's third-party business had lower results than the previous year, reflecting the loss of eight operating licenses by Iberia handling.
- The decision to withdraw from the Air Europa acquisition process resulted in a provision of an exceptional charge of EUR50 million corresponding to the breakup fee.
- Asia Pacific market showed weak demand, particularly in China, leading to a decrease in unit revenue by 14%.
- The company's total non-fuel CASK increased by 1.8% in the first half of the year, driven by the timing of last year's wage agreements and investments in operations and fleet.
Good morning and welcome to the IAG half year report. Today I'm joined by Nicholas Cadbury, CFO, as well as members of the IAG management committee. Today, we are reporting a strong performance in the first half with profit of just over EUR1.3 billion, an increase of EUR49 million compared to a very strong performance last year, and this is because we are delivering on our strategy.
We continue to see a strong demand for travel in our core markets of North America, Latin America, and Intra Europe, which has delivered a positive unit revenue of 2.9% in the half. Our brands are doing well, being leader in their markets, and our ongoing transformation program is driving customer operational and cost improvement across the portfolio, particularly at BA. We are delivering on our promise of significant free cash flow generation.
And as a result, our balance sheet continues to get stronger. At this point, I will also highlight our decision to withdraw from the Air Europa acquisition
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