IAG has been crowned in the third quarter of the year as the large European airline group with the best financial result of the period, with a profit before extraordinary items of 2,340 million euros until September, ahead of its competitors Air France-KLM and Lufthansa.
The company directed by Luis Gallego has thus managed to increase the figures from a year before by 8.8%. Profit before taxes reached 2,955 million euros, 13% morewhile operating profit rose by 10.5%, up to 3,322 million euros.
As Gallego explained in a press conference after the presentation of results, it is “difficult” to explain why, taking into account that the level of income has been similar for the three companies, the net result presents so many differences.
Specifically, IAG’s income was 24,053 million euros (8.2%), those of Air France-KLM reached 23,582 million (+4%), while Lufthansa had a turnover of 28,137 million euros, 5% more.
However, he has pointed out that it can explain why IAG has such good results. “We have defined a correct strategy”has stressed, arguing, however, that strategies “have to be accepted, but then they have to be done” and that execution is “very important.”
Likewise, he stressed that each of the three groups has a different model, with IAG being an active holding company with different companies. “We have very good companies, very good brands and we operate in very good markets. “That combination produces very good results.”.
For its part, the Lufthansa group recorded a net profit of 830 million euros between January and September, half of the 1,606 million in the same period of 2023, putting into highlights the structural problems that runs through the group’s main airline, Lufthansa.
Delays in aircraft deliveries, punctuality problems at hubs in Germany and regulatory disadvantages are affecting the main brandwhich has already launched the ‘Turnaround’ program to address these internal and structural challenges.
Among other things, the plan foresees transferring more short-haul traffic to more profitable flight 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.
“The Lufthansa Group will continue to focus on generating cash flow and creating value for our shareholders. To this end, the Lufthansa Airlines Turnaround program and fleet modernization are fundamental elements”highlighted Lufthansa CFO Till Streichert.
Air Frande and the Olympic Games
As for Air France-KLM, the Franco-Dutch group obtained a net profit of 510 million euros between January and September 2024, a 58% less than the previous year.
The operating profit also decreased significantly to 1,204 million, which represents a decrease of 32%, while the gross operating profit (Ebitda) It contracted 10% to stand at 3,241 million euros.
Despite everything, the company has managed to turn around the year after accumulating losses of 400 million between January and Junethanks to a third quarter in which profits reached 824 million euros. However, this figure is still 13% below that recorded in the same quarter of 2023.
The CEO of the aeronautical holding company, Benjamin Smith, has indicated that the third quarter has presented mixed trends for the company.
On the one hand, the manager has indicated that the operating result was affected by the Paris Olympic Games, which affected Air France’s operations during the summer. Despite this, Smith believes that the Games were an opportunity to demonstrate the airline’s “expertise” and that it will be advantageous for the group in the long term by having given “unparalleled visibility” to France.
On the other hand, costs continued to rise at KLMeven more than expected, which added pressure to the business model and highlighting “the need for more concrete structural improvements”.
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