IAG, the parent company of British Airways, and Air France-KLM reported record summer reservations as travelers continued to book vacations despite the cost-of-living issue, however IAG’s CEO warned that strikes and a lack of employees might potentially disrupt key airports.
European airlines and airports are under pressure to avoid the chaotic scenes that marred the return to mass travel after the COVID-19 outbreak last summer.
IAG (ICAG.L), which also owns Iberia, Vueling, and Aer Lingus, said on Friday that robust summer ticket sales and a winter season that exceeded expectations meant 2023 profit will be higher than previously forecasted.
Its upbeat prognosis matched those of other big European carriers. Lufthansa, easyJet, and Ryanair all reported strong summer reservations, demonstrating that customers prioritize travel spending despite rising inflation and an uncertain economic future.
IAG described the summer forecast as “encouraging,” adding that capacity in its core North Atlantic and Latin American markets had returned to pre-pandemic levels, with leisure travelers driving bookings.
However, Chief Executive Luis Gallego expressed concern about capacity at London’s Heathrow airport this summer, as well as the possibility of new air traffic controller (ATC) strikes in France, where protests over a retirement age increase have disrupted travel since January.
British Airways had to cancel flights over the Easter holidays owing to labor unrest at Heathrow, albeit the hub, which set a cap on passenger numbers last summer to deal with staff shortages, has stated that a similar step will not be implemented this year.
“We are very concerned about the French ATC,” Gallego said during a post-earnings conference call. “For example, 80% of Vueling’s flights are above French airspace, so I think it’s something we’re concerned about.”