There is currently “no indication of weakness” in forward bookings, despite concerns that rising inflation, a cost of living crisis, and Covid uncertainty could significantly drag down ticket sales in the upcoming months, according to the International Airlines Group (IAG), based in Madrid and owner of British Airways and the Spanish flag carrier Iberia.
The European aviation firm anticipates announcing an operating profit of about €1.2 billion later this month as a result of higher-than-anticipated passenger revenue. The group also owns a number of other airline brands, including Ireland’s Aer Lingus and Spanish discounter Vueling.
“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,” the company announced on Thursday.
EasyJet, a competitor in the low-cost airline market, also stated on Thursday that yields remained “strong” despite the deteriorating economic climate and that load factors were currently higher than pre-pandemic levels in 2019.
The owner of British Airways’ primary hub at Heathrow Airport, however, stated that it was still unsure about the demand outlook and cited a number of factors, such as the potential for a new COVID-19 variant and the conflict in Ukraine, which could both have a significant detrimental effect on travel demand.
Because Europe and the UK are currently so affordable thanks to the strength of the US dollar, some European carriers, like Heathrow-based Virgin Atlantic and transatlantic newcomer Norse Atlantic, are becoming more and more popular with Americans.
According to Norse Atlantic, American vacationers might save hundreds of dollars this winter by flying to Europe instead of choosing more expensive domestic flights.