Skift Take
Leisure travelers are still fueling strong results at British Airways and Iberia.
Asked point blank if International Airlines Group, the owner of British Airways and Iberia, saw any declines in airfares or travel demand, CEO Luis Gallego was blunt. "We don’t see that," he said.
The group, one of the largest in Europe that also includes Aer Lingus and discounter Vueling, is doing extremely well. Travel demand is robust with about 80% of its third-quarter schedule already booked, IAG reported in its first-half results Friday. And that is driving higher yields — a rough proxy for airfares — across its businesses, and not just long-haul international markets.
In fact, IAG made its largest gains in domestic markets — Spain and the UK — and in Europe where yields, measured in passenger unit revenues, were up 19% and 18%, respectively, in the second quarter. Group yields increased just over 13% with improvements in every segment.
"We continue to see strong demand in the third quarter," IAG Chief Financial Officer Nicholas Cadbury said, indicating the yield increases will continue.
Air France-KLM, which also reported its second-quarter results Friday, sees similar demand trends. G