International Consolidated Airlines Group SA

International Consolidated Airlines Group SA (LSE: IAG) is an FTSE 100 index listed European aviation conglomerate that operates flights under the British Airways, Iberia, Aer Lingus, and Vueling banners. Over the past period, the company transported 264 million travelers to 185 destinations worldwide. Its primary airport hubs are situated in London Heathrow, London Gatwick, Madrid, Barcelona, and Dublin. The company primarily generates a significant portion of its income from the United Kingdom.

Capital Markets Day 2023 & Third Quarter Financial Update

• Income Statement Update: In Q3 2023, the company reported an increase in operating profit before exceptional items, reaching EUR 1,745 million compared to EUR 1,216 million in Q3 2022. This resulted in a higher operating margin of 20.2% compared to 16.6% in Q3 2022. The key contributing factors include:
• A significant capacity (ASK) rise of 17.9% from the previous year, reaching 95.6% of Q3 2019 levels. This growth focused particularly on European holiday destinations and extensive investments across the South and North Atlantic, aided by 20 aircraft deliveries this year.
• Passenger unit revenue experienced a 2.2% year-on-year increase (24.6% compared to 2019), primarily driven by robust demand in leisure travel.
• Non-fuel unit costs for the quarter were 3.5% lower than Q3 2022, despite approximately a 1.0 percentage point impact from increased disruptions across the business, such as the UK NATS systems outage in August, mostly affecting British Airways.
• Fuel unit costs decreased by 6.2% year on year.

• Balance Sheet Update: The balance sheet showed significant improvement, with a reduction in gross debt by EUR 2.4 billion to EUR 17.2 billion by September 30, 2023, compared to June 30, 2023. This reduction was facilitated by the early repayment of a GBP 2.0 billion UKEF-backed loan and the repayment of a EUR 0.5 billion IAG bond upon maturity.
• Outlook Update: The company projections indicate that by the end of 2023, the capacity will likely reach approximately 96% of the levels observed before the onset of COVID-19. Bookings for Q4 align with our expectations, with roughly 75% of the anticipated passenger revenue already secured. Forecasts for non-fuel unit costs throughout 2023 suggest they will likely fall at the lower end of the previously indicated range of 6% to 10% improvement compared to the entirety of 2022, owing to increased disruptions.

Share Price Chart

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

International Consolidated Airlines Group SA (LSE: IAG) was trading at the closing market price of GBX 158.80 (as on 22 November 2023)

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 22 November 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.

Note 4: Dividend Yield may vary as per the stock price movement.