International Airlines Group has published its latest financial results, showing “a significant step up in profitability for all its airlines”.

The group reported a third quarter operating profit of €1.2 billion, compared to an operating loss of €452 million in the same period last year.

This brings IAG’s operating profit for the nine months so far to €770 million, with the group now expecting full year 2022 profits of around €1.1 billion.

Total revenue for the third quarter was just over €7.3 billion, which IAG said had been achieved “despite the restrictions imposed at London Heathrow airport and the Asia Pacific network remaining substantially closed”.

Both these factors are expected to ease in the fourth quarter, with Heathrow’s capacity cap recently having been lifted, and IAG member carrier British Airways planning to resume flights to Tokyo on November 13, followed by Hong Kong on December 5.

British Airways confirms schedules for Hong Kong and Tokyo route resumptions

Third quarter capacity was at 81.1 per cent of 2019 levels (up from 78 per cent in the second quarter), which IAG said had been driven primarily by European short-haul (at 91 per cent of 2019 levels), North America (92 per cent) and Latin America and the Caribbean (75 per cent).

The group also said that premium leisure revenue had recovered to 2019 levels by the end of the third quarter “despite capacity being significantly lower”.

Fourth quarter capacity is expected to be at around 87 per cent of 2019 levels, rising to 95 per cent in the first quarter of 2023.

Commenting on the news Luis Gallego, IAG’s chief executive officer, said:

“We achieved another strong performance in the third quarter, with an operating profit of €1.2 billion and liquidity of over €13 billion. All our airlines were significantly profitable and we are continuing to see strong passenger demand, while capacity and load factors recover.

“Leisure demand is particularly healthy and leisure revenue has recovered to pre-pandemic levels. Business travel continues to recover steadily.

“I would like to thank our employees across the Group for their hard work which has been key to our recovery. This strong trading performance allows us to continue to invest in our customers, our people and our industry-leading sustainability agenda.

“We’re pleased that our shareholders have recently approved the acquisition of 87 new short-haul aircraft that will bring us long-term cost savings, lower carbon emissions as well as an improved customer experience.

“While demand remains strong, we are conscious of the uncertainties in the economic outlook and the ongoing pressures on households. Against this backdrop, we are focused on adapting our operations to meet demand, strengthening our balance sheet by re-building our profitability and cashflows and capitalising on our high level of liquidity. This will allow us to allocate capital while investing in a disciplined way in our service and our people, to build capacity and enable future growth.

“As we build back our operational resilience, we are confident in our strengths as a Group: first, a portfolio of leading airline brands; second, leading positions in our key markets and hubs; and third, the flexibility afforded by IAG to drive operational efficiency and innovation. These will enable us to return to pre-Covid levels of profit and generate long-term value for all our stakeholders.”