While other European and some north American carriers have reported some difficulties in their 2024 earnings so far, IAG is still going strong. The Anglo Spanish group has reported strong financial results in its 2024 Q2 that build on a positive Q1 to make paint a very pretty picture for them. So, let’s take a closer look at what IAG’s earnings report tells us.
2024 Q2 and First Semester Operating Margins Stay Close to 2023 Levels
The TLDR of IAG’s financial Q2 report is that the airline has maintained its profits, operating margins, and revenue remarkably close to where they stood in 2023 at this time. That is extremely positive as we have seen other airlines and groups either struggle to maintain their revenue levels or had their operating margin slip from last year.
IAG wrapped up Q2 2024 with:
- 8.2 billion Euro in revenue (up from 7.6 billion in 2023)
- 15% operating margin (down from 16.3% in 2023)
- 1.24 billion Euro in profits (down from 1.25 in 2023)
That stacks up on top of what the airline achieved in Q1 making 2024’s first semester very healthy for the airline group:
- 14.7 billion Euro in revenue (up from 13.5 billion in 2023)
- 8.9% operating margin (down from 9.3% in 2023)
- 1.31 billion Euro in profits (up from from 1.26 in 2023)
British Airways and Iberia haven’t faced and seen in their operations the issues that other carriers have. It must be noted though that operational costs and fuel have slightly eroded the group’s profits just as it has done for other carriers. Pilots and cabin crew are more expensive now than they were a year ago and so is aviation fuel.
More Seats And More Paying Customers in First 2024 Semester
I often like looking at 3 key indicators for the operational side of things to get a basic understanding of how the airline (or group) is performing. ASK (available seat kilometers), RPK (revenue passenger kilometers), and load factor can tell a lot about the status and trajectory of an airline in the short and medium term.
In IAG’s case the airline was able to deploy more seats, thanks to new planes arriving from both Airbus and Boeing, while also increasing the number of passengers carried.
What is extremely positive for the airline is that the RPK figures are increasing at a much faster rate than the ASK. Therefore, IAG and its airlines have increased the number of passengers carried more than the new seats they introduced across their network. Hence the increase in load factor which jumped up by 0.9 points from last year, up from 84.1% in 2023 to 85% in 2024.
So far in 2024 a grand total of 58.2 million passengers have flown on IAG owned airlines. That is up by a remarkable 7.2% from 2023 when the overall number was 54.3 million passengers.
Looking at best performers and worst performers withn the group here are some key figures for the 5 airlines that make up the IAG group:
| Airline | ASK (Var%) | Load Factor 2024 | Operating Profit 2024 (Millions) | Operating Profit 2023 (Millions) |
|---|---|---|---|---|
| Aer Lingus | 2.4 | 79.4 | 9 | 40 |
| British Airways | 5.2 | 83.3 | 555 | 496 |
| Iberia | 17.4 | 86.6 | 362 | 372 |
| Level | 19.1 | 94.8 | N/A | N/A |
| Vueling | 1.4 | 91.7 | 97 | 96 |
IAG loyalty programs have also performed well for the group. The loyalty programs saw a jump up in profits of a very nice 23 million GBP going up from 170 million to 193 million pounds. The airlines have been focusing on more ways and schemes to incentivise frequent flyers to redeem miles, at the best conditions for the airlines, with that helping increase profits and margins of this branch of the business.
What was less positive for the group is Aer Lingus’s performance so far in 2024. The carrier’s margins and profits have drastically dropped. That is primarily due to the many tensions between pilots and management. The airline suffered some major disruption due to the ongoing contract discussions with the pilots. Discussions which also pushed IAG to switch Aer Lingus with Iberia as launch customer for the very first Airbus A321XLR.
Outlook Remains Positive for IAG in 2024’s Second Half
The airline group stated in its report that it remains confident for a positive second half of 2024. That should mean closing the year with figures close to what was achieved in 2023. Particularly as demand remains strong and sustained for transatlantic flights to north and south America.
Although disruptions continue to be common as for aircraft deliveries the group forecasts to receive 20 new planes in 2024 and 27 in 2025.