Q1 2026 International Consolidated Airlines Group SA Earnings Call Transcript
Key Points
- International Consolidated Airlines Group SA (BABWF) reported a strong first quarter with a 77% increase in operating profit to EUR351 million.
- The company's operating margin improved by 2.1 points to 4.9%, despite it being the seasonally quietest quarter.
- The capital-light loyalty business grew revenue by 10% and profits by 32.6% at a 20% margin.
- The company maintains a strong balance sheet with net leverage at 0.5x.
- British Airways delivered high profits and margins year-on-year, driven by strong passenger unit revenues, particularly in the North Atlantic and short-haul leisure routes.
- The Middle East conflict is expected to have a more substantial impact on subsequent quarters, particularly affecting fuel costs.
- Aer Lingus experienced a larger seasonal loss year-on-year due to high competition in Dublin and closure costs in Manchester.
- The company anticipates lower profit for the year than originally anticipated due to higher fuel costs.
- Short-haul markets remain highly competitive, making it challenging to pass through increased fuel costs.
- Capacity growth is expected to be lower than initially planned, which may impact non-fuel costs.
Good morning, ladies and gentlemen, and welcome to International Airlines Group Q1 2026 results. (Operator Instructions) I would like to remind all participants that this call is being recorded.
I will now hand over to Luis Gallego, Chief Executive Officer, for the presentation. Please go ahead.
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Thank you very much, and good morning, everybody, and welcome to the IAG First Quarter Results. As usual, I'm joined by Nicholas Cadbury, our CFO; as well as the IAG Management Committee. And for the first time, I would also like to welcome José Antonio Barrionuevo, our incoming CFO, to the call.
I'm pleased to report a strong first quarter. We grew revenue by 1.9%, reflecting continuing strong demand for our airlines and networks. We grew profit by 77% to deliver operating profit of EUR351 million. Our operating margin improved by 2.1 points to 4.9%, in our seasonally quietest quarter. This good profit performance was
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