BA owner says recovery of business travel will drive return to profit

theguardian.com:

British Airways’ owner has said that a recovery in business travel and trips by wealthy passengers will drive a return to profitability from the second quarter onwards this year.

International Airlines Group (IAG), which also owns Iberia and Aer Lingus, said that while Omicron had a short-term impact on bookings in January and February, the overall easing of coronavirus-related travel restrictions has improved travel demand in the first quarter, particularly in the UK.

“Demand is recovering strongly in line with our previous expectations,” said Luis Gallego, the chief executive of IAG. “We expect to be profitable from the second quarter onwards and for the full year. Premium leisure continues to be the strongest performing segment and business travel is at its highest level since the start of the pandemic.”

The company, which reported an operating loss of €731m (£625m) in the first quarter compared with more than €1bn in the same period last year, added that there had been “no noticeable impact” on the business from the war in Ukraine. Analysts’ consensus on IAG, which made a €3.5bn loss in 2021, was for an operating loss of about €510m in the first three months of the year.

Shares fell 8% on Friday morning, making IAG the biggest faller on the FTSE 100.

Gallego said that by the third quarter, demand across the all-important UK-US travel corridor would almost be back to pre-pandemic levels.

“As a result of the increasing demand, forward bookings remain encouraging,” he said. “ We expect to achieve 80% of 2019 capacity in the second quarter and 85% in the third quarter. North Atlantic capacity will be close to fully restored in the third quarter.”

The resurgence in demand is also taking place in the hotel sector, with the