Aer Lingus owner IAG signals recovery despite ramped up costs and Omicron

Aer Lingus owner IAG expects to be profitable by Q2 2022 Picture: Eddie O'Hare

Aer Lingus owner IAG reported a Q1 operating loss short of analyst expectations due to Omicron and the cost of ramping up capacity.

Operating loss before exceptionals for the airline group was €754m, missing average analyst consensus which stood at a loss of €510m, although the range spanned a loss of €1.15bn to a loss of €250m.

"The main reason deviation with consensus is the Omicron impact that was mainly in January and February and the ramped up costs because we want to be close to 90% of our capacity during the summer," said chief executive Luis Gallego told reports.

IAG said it would ramp up capacity from 65% of 2019 levels in the first quarter to around 80% in the second, 85% in the third and 90% in the fourth, with North Atlantic routes close to full capacity by quarter three.

Overall, the company had a strong recovery in business travel in the first quarter and it expected to be profitable from the second quarter onwards and for the full year.

The company, which also owns Iberia British-Airways, said the continued easing of government-imposed travel restrictions, particularly in Britain, resulted in improved travel demand, with no noticeable impact from the war in Ukraine.

"Demand is recovering strongly in line with our previous expectations," said Mr Gallego, adding that the company was currently focused on improving operations, customer experience and its operational resilience.

Reuters