
International Consolidated Airlines Group (IAG) presented its Group consolidated results for the sixย months to June 30, 2022.
IAG returns to profit in the second quarter following strong recovery in demand across all airlines

IAG financial results highlights for the period:
- Operating profit for the second quarter โฌ293 million (2021: operating loss โฌ967 million), and operating profit before exceptional items โฌ287 million (2021: operating loss before exceptional items โฌ1,045 million)
- Operating loss for the half year โฌ438 million (2021: operating loss โฌ2,035 million), and operating loss before exceptional items โฌ467 million (2021: operating loss before exceptional items โฌ2,180 million)
- Profit after tax and exceptional items for the second quarter โฌ133 million (2021: loss โฌ981 million) and profit after tax before exceptional items โฌ127 million (2021: loss โฌ1,045 million)
- Loss after tax and exceptional items for the half year โฌ654 million (2021: loss โฌ2,048 million) and loss after tax before exceptional items โฌ683 million (2021: loss โฌ2,169 million)

- Strong liquidity at June 30, 2022:
- Total liquidity increased to โฌ13,489 million (December 31, 2021: โฌ11,986 million)
- Cash1 of โฌ9,190 million, up โฌ1,247 million on December 31, 2021, with significantly positive working capital, driven
principally by bookings for travel in the second half of the year
- Committed and undrawn general and aircraft financing facilities of โฌ4,299 million (December 31, 2021: โฌ4,043
million), including an additional โฌ200 million loan facility for Aer Lingus from the Ireland Strategic Investment Fund

- Net debt at June 30, 2022 was down โฌ688 million since December 31, 2021 to โฌ10,979 million, reflecting the seasonal
benefit on cash of bookings for travel in the second half of the year
Customer demand continues to recover strongly
- Passenger capacity in quarter 2 was 78% of 2019 (Q1 guidance: c80%), up from 65% in quarter 1, driven primarily by IAGโs key regions of European shorthaul (capacity 89% of 2019), North America (84%) and Latin America & Caribbean (81%)
- Passenger unit revenue in quarter 2 increased by 6.4% compared to 2019, helping to offset lower capacity and higher fuel costs, driven by passenger revenue yield 10.6% higher than in 2019
- Load factor of 81.8% (3.2 points lower than in 2019, but higher than 72.2% in quarter 1)
- By the end of quarter 2, premium leisure revenue had almost fully recovered to 2019โs level, despite capacity being
significantly lower. Business channel revenue had recovered to c.60% of 2019โs level
- In response to the challenging operational environment at Heathrow, British Airwaysโ capacity was limited to 69.1% inย quarter 2 (compared to 57.4% in quarter 1) and plans to increase to c.75% in quarter 3

- IAGโs overall passenger capacity plans for the remainder of 2022 are c.80% in quarter 3 and c.85% in quarter 4, a reduction
of 5% for the second half of the year compared to previous guidance, mainly due to the challenges at Heathrow; full-year capacity is expected to be c.78% of 2019 (compared to c.80% previously), with North America close to 2019 capacity by the end of the year
- SAF (Sustainable Aviation Fuel) purchase commitments increased to $865 million (from $400 million previously) for the next 20 years, including a quarter of IAGโs SAF target for 2030 (10% of total fuel needs)

Luis Gallego, IAG Chief Executive Officer, said:
โIn the second quarter we returned to profit for the first time since the start of the pandemic following a strong recovery in demand across all our airlines. This result supports our outlook for a full year operating profit.
โOur performance reflected a significant increase in capacity, load factor and yield compared to the first quarter. โPremium leisure remains strong while business travel continues a steady recovery in all airlines.
โIberia and Vueling were the best performing carriers within the Group. The Spanish domestic market and routes to Latin America continued to lead the recovery with demand exceeding 2019 levels last month.
โForward bookings show sustained strength and North Atlantic demand continues to grow following the lifting of the US COVID testing requirements in June.
โAlthough bookings into the fourth quarter are seasonally low at this time of year, we are seeing no signs of any weakness in demand.
โOur industry continues to face historic challenges due to the unprecedented scaling up in operations, especially in the UK where the operational challenges of Heathrow airport have been acute. Our airline teams remain focused on enhancing operational resilience and improving customer experience. I would like to thank those customers affected for their loyalty and patience and our colleagues for their hard work and commitment. We will continue working with the industry to address these issues as aviation emerges from its biggest crisis ever.
โIn line with our net zero commitment by 2050, we have announced the addition of 50 new Boeing 737s and 59 Airbus A320 Neo family aircraft subject to shareholder approval. These modern, fuel-efficient planes will see us over 60 per cent through our shorthaul fleet replacement by 2028.
โAs we build back operational resilience, our strong portfolio of brands, ability to deliver efficiencies through our Group scale, strong capital discipline and our leadership position in sustainability will generate long term shareholder value.โ
Trading outlook
IAG expects pre-exceptional operating profit to be significantly improved for quarter 3 2022 compared to quarter 2 and to be positive for full year 2022. Net cash flow from operating activities is expected to be significantly positive for the year. This assumes no further setbacks related to COVID-19 and government-imposed restrictions or material impacts from geopolitical developments. Net debt is expected to increase by year end compared with the end of 2021.
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