The actions of International Consolidated Airlines group (IAG) reacted with increases of up to 2% and strong volatility to results with lights and shadows, which showed a solid start of the year, although the tranquility for the group seems to be guaranteed to summer, according to analysts consulted by finance.com.
The group of airlines that directs Luis Gallego He reported an operational benefit of 198 million euros until March, well above the 145 million estimated by the consensus of analysts, with revenues that climbed up to 7,044 million, also exceeding 6,800 million predicted by experts.
At the level of net benefit, IAG did not have a problem to exceed 72 million euros, after recounting 176 million earnings.
Solid quarter that anticipates upward reviews for IAG
The figures revealed this Friday by IAG formed “a first solid quarter, with better results than expected in all lines. In addition,“ the net benefit exceeds forecasts, which implies a possible upward revision of the annual consensus of around 6%, ”said analysts of Jefferies.
At a complex moment for the sector, marked by geopolitical uncertainties and the risk of global recession because of Donald Trump’s tariffs, the most positive aspect that the American broker highlighted is the evolution of the margins.
Specifically, “they already exceed the levels prior to COVID and can continue to grow as the long -distance capacity is recovered and the opportunities for improvement in British Airways materialize,” Jefferies said.
In fact, the exploitation margin climbed up to 2.8% compared to 1.1% of the first quarter of 2024, and could have been greater if it had not noticed the impact of Heathrow closure, whose cost amounted to 50 million euros, according to the company.
Important debt reduction and encouraging perspectives for the dividend
Another of the most prominent aspects by analysts is the important reduction of the debt reported by IAG, when the EBITDA is located at 0.9 times, compared to 1.1 times of 2024, after a cut of about 1.9 billion euros.
This circumstance “reinforces the flexibility of the company to face its investment plan and take advantage of the growth opportunities that may arise or explore increases in remuneration to the shareholder,” he explained Iván San FélixAnalyst for rent 4 bank.
Sources present at the conference with analysts explained to finance.com that the intention of IAG is to continue maintaining the dividend to the extent that the debt is maintained below 1.5 times the EBITDA, and since the group completes the current program of repurchase of actions.
The costs, the black chickpea of the results
However, not all were lights in the results of IAG. Specifically, the costs are the “main factor to monitor, since they increase considerably in the quarter, especially those related to personnel, engineering and operational costs,” they warned in Bankinter.
This was the most repeated element among analysts, costs that were “remarkably worse”, in the words of Morgan Stanley, due to the effect of the exchange rate and the closure of Heathrow.
Hope is in fuel costs, which could surprise if oil stabilizes around 60 dollars per barrel, which could generate extra income of 800 million in the next two quarters, they explained to Finance.com in sources of a manager based in Madrid.
Caution after summer
Regarding the forecasts by 2025, IAG itself acknowledged to be aware of “geopolitical and macroeconomic uncertainty”, but ended up reiterating its business guides after pointing out that there is a “good demand for trips” in all its main markets.
In this regard, analysts have more doubts. “The uncertainty about transatlantic demand in tourist class for the third quarter could limit the upward revisions of consensus for now,” said Jefferies.
If not for this factor, the American broker calculates that consensus could have been significantly reviewed, around 10%.
Along the same lines, the Conor Dwyer analyst Morgan StanleyHe pointed out that, although prices in the North Atlantic were solid in the quarter, a recent weakness in economic demand is noticed, which limits the possibility of improvements in annual forecasts.
However, it was not a bad balance for IAG that of a quarter that the experts described as “complicated” and in which the group of airlines led by Luis Gallego was the only one among the great European giants who was able to win Dienro, which the investors in the parquet rewarded.
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