Investing.com -- Shares in International Consolidated Airlines Group (LON:ICAG) (IAG) rose on Friday after the British Airways-parent reported better-than-anticipated first-quarter income thanks in part to increased passenger demand.
IAG, which is also the owner of Spain's Iberia and Vueling, said that growth had been particularly strong in travel to Latin America and the Caribbean. The timing of the Easter weekend also lifted unit revenue, especially in Europe.
The developments helped offset a "more challenging" environment in other regions, IAG said. The weakness was notable in the Middle East, where geopolitical tensions had impacted flights, although Chief Executive Luis Gallego later said that its exposure to the area is relatively limited.
Operating profit in the three months to March 31 jumped to 68 million euros, up from 9 million euros in the year-ago period. Analysts had anticipated a return of 49 million euros, according to a company-compiled forecast cited by Reuters.
Gallego added in a statement that the company is also "well-positioned for the summer." He told Reuters that IAG had already secured over 80% of its anticipated bookings for the current quarter and more than 40% for the third quarter.
"The high demand for travel is a continuing trend,” Gallego said.
Analysts at Stifel flagged some concerns over an expected uptick in costs needed to address the solid travel demand, leading them to predict "broadly flat" pre-tax earnings and declining margins in IAG's 2024 financial year. However, they called the firm's commentary "positive," adding that they believe IAG benefited from a "clear focus on profitability" and an "unprecedented strong position on transatlantic routes."