BA owner IAG reports better-than-expected Q3, shares surge

IAG shares shot higher on Thursday after the Iberia and British Airways owner said it now expects to report a third-quarter operating profit of around €1.2bn after stronger-than-expected trading.

In a brief and unscheduled update, the company said trading in the third quarter was boosted by passenger revenue strength.

"Forward bookings remain at expected levels for the time of year, with no indication of weakness, and accordingly our fourth quarter expectations remain unchanged as of today," it said.

IAG is due to announce its results for the nine months to the end of September on 28 October.

At 1325 BST, the shares were up 8.9% at 109.72p.

Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: "Despite the rampant cost-of-living pressures facing consumers, the British Airways ticket desk has been keeping very busy it seems. IAG has been one of the hardest hit carriers since the pandemic, with long-haul and business trips taking a lot longer to take off back towards pre-Covid levels than its short haul counterparts.

"There is still a long way to go before any champagne can be popped. Consumer behaviour is yet to fully adjust to a world of higher inflation and increased costs. If spending starts to rein in, the strong forward order book may well come under pressure. Then there’s the question of IAG’s eye watering debt pile, following huge liabilities taken on to get through the worst of the pandemic storm.

"Ultimately, this upgrade from expectations is a very welcome surprise, but whether the spritely mood music can be maintained is another question entirely."