Shares in Aer Lingus and British Airways’ parent company IAG rose sharply after it was revealed that earnings for the peak summer quarter beat analysts’ estimates and showed no signs of slowing demand.
ir France-KLM and Deutsche Lufthansa AG also rose as the surprise update and upbeat outlook fueled optimism that European airlines can weather the deteriorating economic outlook.
IAG shares rose 9.8 percent after the London-based group said it expected operating profit of around 1.2 billion euros for the quarter to September, spurred by a record holiday season. That far exceeds the consensus compiled by the company of €814 million for the period.
“Third quarter trading was better than expected due to strong passenger revenue,” said IAG. “Forward bookings remain at levels expected for the time of year with no sign of weakness and accordingly our expectations for the fourth quarter remain unchanged as of today.”
As pent-up travel demand eases after Covid curbs are removed, there is growing speculation that rising costs of living in Europe could discourage people from flying over the winter and into next summer.
EasyJet, the region’s second-largest low-cost airline, also said yesterday that its bookings for the current quarter remain strong.
IAG shares were trading up 7.2 percent at 107.98 pence as of 2:02 p.m. in the British capital, paring down 24 percent this year.
The full-service competitor Air France-KLM was 5 percent more expensive and the German Lufthansa by 2.8 percent.
EasyJet was up 2.8 percent, while leading European discounter Ryanair Holdings was little changed.
IAG, which also owns Spain’s Iberia and Ireland’s Aer Lingus, will report full earnings on Oct. 28, according to the unscheduled update.
Uncertainty about the group’s earnings had been fueled by operational problems at British Airways, with a labor shortage forcing the airline to extend restrictions on flights from London Heathrow Airport into the winter season, even after the hub lifted its own cap would have.
https://www.independent.ie/business/world/iag-stock-rallies-as-airline-group-says-demand-holds-up-42065264.html IAG stock rebounds as the airline group says demand is holding up