The IAG group, which includes Iberia, British Airways, Vueling, Aer Lingus, and Level, is actively pushing a tourism rebound to stimulate demand and lift results. After a standout summer, the group reported a profit after tax of 2.151 billion euros in the first nine months, a dramatic turnaround from last year and well above pandemic-era levels.
CEO Luis Gallego highlighted that the third quarter marked a new record for IAG. The strength of the quarter lets the group invest more in its network while reducing debt. Demand remained robust across routes, with particular momentum from the North and South Atlantic corridors, and leisure destinations throughout Europe. The hubs in Barcelona, Dublin, London, and Madrid benefited from new aircraft deliveries and solid future orders that support continued growth in capacity and service quality.
During the period, Iberia and Vueling drove notable revenue growth, lifting total revenue by about a third to 22.229 billion euros. Operating profit nearly quadrupled year over year to 3.005 billion euros, reflecting disciplined cost management and productive capacity utilization. The group also reduced gross debt to around 17.227 billion euros at the end of September, a year-on-year improvement of about 13.8 percent from the 2022 close.
From January through September, IAG airlines carried approximately 87.5 million passengers, about 26 percent more than the previous year, with an average load factor of 85.9 percent. This was 4.6 percentage points higher than the prior year. Management stressed that bookings for the remainder of the year were coming in at a healthy pace, underscoring the resilience of demand. It was noted that roughly 75 percent of fourth-quarter passenger revenue had already been booked at that point.
Looking ahead to 2023, the group described the year as a solid recovery for margins, operating profit, and balance sheet strength. IAG reiterated its aim to restore capacity to pre-pandemic levels, with an expectation to reach or nearly reach the 2019 flight supply target over the course of the year. Capacity in 2019 was considered a benchmark, and the group indicated that it was approaching that level as travel recovered.
Iberia drives growth
Among the airlines in the IAG portfolio, Iberia stood out for delivering the most substantial operating-profit growth through September. The Spanish flag carrier reported a 76 percent jump in operating profit to 449 million euros. Revenue rose by about 19 percent, aided by an 18 percent increase in capacity and a 5 percent gain in unit revenue per passenger.
Vueling also posted a strong result with a record operating profit of 282 million euros, up 8.8 percent. The Barcelona-based carrier maintained capacity near 2019 levels, even as talks continued to secure a new collective bargaining agreement with pilots and to finalize a safe cabin crew contract early in the third quarter.
British Airways contributed a notable operating profit of 718 million euros, a rise of about 49 percent. Capacity growth of around 25 percent supported higher flight frequencies and larger aircraft, alongside efforts to rebuild the Asian network as travel resumes. In Ireland, the Weather Ling company achieved operating profit of 196 million euros, up 41 percent, with total revenues up 16 percent, reflecting a healthy margin expansion and stronger cash flow generation across the network.