IAG, the European airline group with the best results until September

IAG was crowned in the third quarter of the year as the major European airline group with the best financial result of the period, with a profit before exceptional items of 2,340 million euros until September, ahead of its competitors Air France-KLM and Lufthansa.

The company led by Luis Gallego thus succeeded in raising a 8.8% the figures from a year earlier. Profit before tax reached 2.955 million euros, 13% morewhile operating profit increased by 10.5%, to 3,322 million euros.

As Gallego explained in a press conference after the presentation of the results, it is “difficult” to explain why, given that the level of revenues was similar for the three companies, the net result presents so many differences.

More specifically, the income of IAG amounted to 24,053 million euros (8.2%), those of Air France-KLM reached 23.582 million (+4%), while Lufthansa It achieved a turnover of 28.137 million euros, or 5% more.

However, he pointed out that this may explain why IAG performs so well. “We have defined a good strategy“, he stressed, affirming however that the strategies “must be accepted, but then they must be implemented” and that their execution is “very important”.

Likewise, he pointed out that each of the three groups has a different model, with the IAG being a holding active with different companies. “We have very good businesses, very good brands and we operate in very good markets. This combination makes very good results“.

For its part, the group Lufthansa recorded a net profit of 830 million euros between January and September, half of the 1,606 million in the same period of 2023, highlighting the structural problems faced by the group’s main airline, Lufthansa.

Delays in aircraft deliveries, punctuality problems in airport hubs Germany and regulatory disadvantages affect the main brand, which has already launched the program Turn around to address these internal and structural challenges.

The plan includes, among other things, shifting more short-haul traffic to more profitable airline operations, improving efficiency by optimizing the network and increasing flexibility and automation. By 2026, the measures will have an effect on gross Ebit of around 1.5 billion euros.

“The Lufthansa Group will continue to focus on generating cash flow and creating value for our shareholders. For this, the program Turn around of Lufthansa Airlines and fleet modernization are fundamental elements,” emphasized Lufthansa CFO Till Streichert.

Air France, affected by the Olympics

As for Air France-KLMthe Franco-Dutch group obtained a net profit of 510 millions euros between January and September 2024, or 58% less than the previous year.

Operating profit also fell significantly to 1.204 millionwhich represents a drop of 32%, while the gross operating profit (Ebitda) contracted by 10% to stand at 3,241 million euros.

Despite everything, the company managed to turn around the year after accumulating losses of 400 million between January and June, thanks to a third quarter where profits reached 824 million euros. This figure, however, remains 13% lower than that recorded in the same quarter of 2023.

The CEO of holding Aeronautics Director Benjamin Smith said the third quarter presented mixed trends for the company.

On the one hand, the manager indicated that the operating profit was affected by the Paris Olympic Gameswhich affected Air France operations during the summer. Despite this, Smith believes the Games were an opportunity to demonstrate the airline’s “expertise” and will benefit the group in the long term by having given “unprecedented visibility” to France.

On the other hand, costs continued to increase at KLM, even more than expected, adding pressure on the business model and highlighting “the need for more concrete structural improvements”.