Date: 17/05/2024 (Edition 9)                                                                                     Download PDF version 

Piotr Grobelny

Aviation Analyst

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IAG leads competition in quarterly results

International Airlines Group (IAG) has showcased a dynamic recovery in momentum for the first quarter of 2024, contrasting sharply with the struggles faced by its European counterparts Air France-KLM and Lufthansa.


IAG reported a significant surge in operating profit to €68 million, marking a significant improvement from the €9 million recorded in the same period last year. The net loss for the quarter was only €4 million compared to €87 million last year. This surge in earnings underscores IAG's limited exposure to current geopolitical events as well as its ability to capitalise on rising travel demand, particularly during the Easter holiday season. With strong summer bookings and over 80% of projected bookings secured for the second quarter, IAG has positioned itself as a frontrunner in Europe's aviation resurgence.


In contrast, Air France-KLM and Lufthansa grapple with a range of issues, from costly strikes to disruptive operational challenges. Air France-KLM maintained its 2024 outlook but warned of a 2% year-on-year increase in costs for the second quarter, reflecting the impact of disruption costs and a slower cargo business. Similarly, Lufthansa slashed its full-year outlook following costly industrial action, with earnings in the second quarter expected to be below the prior year level.


While IAG's financial trajectory remains strong, challenges persist across the industry. Regulatory hurdles, such as those surrounding IAG's bid for Air Europa, pose potential risks to future growth. Additionally, delayed aircraft deliveries further constrain capacity, limiting airlines' ability to meet record demand.


Looking ahead, IAG remains focused on its strategic objectives, with plans for around 7% capacity growth and continued investment in core markets. Despite expected slight increases in non-fuel unit costs, IAG is anticipated to generate significant free cash flow and maintain a strong balance sheet.


Piotr Grobelny

Aviation Analyst

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Emirates and Singapore Airlines exit 2023 with record figures

Emirates and Singapore Airlines (SIA), have recently unveiled their fiscal year results, showcasing both record passenger numbers as well as highest-ever profit figures. Emirates' robust financial performance was underscored by its record-breaking profit and revenue figures, driven by strong customer demand and capacity expansion.


Emirates Group reported a record profit of US$ 5.1 billion, marking a substantial 71% increase from the previous year. This achievement was bolstered by a 15% surge in revenue, reaching US$ 37.4 billion. Additionally, the group ended the year with its highest-ever cash balance of US$ 12.8 billion.


Financial data from IBA Airlines shows that the Emirates airline significantly contributed to the group's stellar performance, reporting a record profit of US$ 4.7 billion, a notable 63% increase from the previous year. Operational metrics also showed impressive growth, with capacity increasing by 20% and passenger numbers rising by 19% to 51.9 million. Those numbers combined with high passenger fares have more than made up for the 21% decrease in the cargo revenue. The airline achieved a passenger load factor in the economy cabin of 82.0% - an increase of 1.8 percentage points compared to the previous period. The airline’s premium cabin seat factor suffered a 3-percentage point decrease, this was likely caused by the added premium seat capacity rather than decreasing interest in the premium product.


Singapore Airlines (SIA) Group achieved its highest full-year operating and net profits in history, propelled by passenger revenue and high load factors. Total revenue for the group reached US$19 billion, with passenger flown revenue increasing significantly by 17.3% to US$15.7 billion. A big contributor to those results was the low-cost arm of SIA – Scoot, noting a 24% increase in revenue and a staggering 423% increase in net profit. Despite a decline in cargo flown revenue by 41.2% to US$2.1 billion, the Group's improved operational performance was evident in its operating profit of US$2.7 billion, up 1.3% from the previous year. Net profit surged by 24.0% to US$2.7 billion. Operational metrics reflected SIA's strong performance, with a notable 37.6% year-on-year increase in passengers carried and a record passenger load factor of 88.0%.


While Emirates boasts a higher profit margin and cash balance, Singapore Airlines has demonstrated remarkable growth in passenger flown revenue and load factors. Both airlines have successfully leveraged their strengths and emerged as frontrunners in their respective regions.


Danny Thurtle

Senior ESG Analyst

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Virgin Atlantic publishes results of 100% SAF flight

When Virgin Atlantic’s Flight 100 crossed the Atlantic in November 2023 on a blend of 100% Sustainable Aviation Fuel (SAF), we said the tangible benefits wouldn’t materialise until long after touchdown at JFK. With the airline and its collaborating partners now publishing their initial results of the flight, the nature of these benefits is becoming apparent.


Regarding the headline, the flight’s fuel mix achieved a 64% lifecycle emissions reduction from Jet A equivalent, or 95tCO2. This figure will take the plaudits, especially as 88% of the SAF used is from the only commercially scaled pathway, Hydro processed Esters and Fatty Acids (HEFA). Reduction factors will likely exceed 64% in the future as we progress past the use of HEFA, with its considerable feedstock limitations. The remaining 12% of the fuel mix is not a recognised pathway in the UK, as a first-generation biofuel, but did contribute to a 40% reduction in particulates from Jet A, improving local air quality and reducing the likelihood of contrail creation. While the flight didn’t pass through any areas susceptible to contrail generation, the Rocky Mountain Institute (RMI)’s contrail task force verified contrail measurement processes. Virgin also expects their data to influence further research on non-CO2 emissions.


Most interestingly of the technical results, the fuel mix was 1% more energy dense than Jet A, meaning the same flight could require less fuel in the future than it does now. This could present interesting problems for the mass balance principles associated with Book and Claim systems required to alleviate the geographical availability of SAF. The chemical specification of future SAF blends will need to be effectively communicated into virtual registries if these energy density results are replicated, and less SAF is required than Jet A for identical flights.


Away from the figures, Flight 100 represents a significant achievement, considering both industry collaboration and the potential of SAF as a drop-in solution. Virgin Atlantic had their 787-8 back in regular service the following day, proving the safety and compatibility of SAF. Virgin, along with the rest of the industry, will hope the success of this project encourages the UK Government to push through the revenue certainty mechanism needed to satisfy their ambitious SAF mandates.


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Suleiman Atif

Senior Aviation Analyst

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Market Update

Our regular update looks at the key trends and market indicators using data and analytics provided by IBA Insight.


Figure 1: Passenger capacity recovery by flight type

Source: IBA Insight
Figure 2: Leasing trends by operator region

Source: IBA Insight
Figure 3: Asset and age trends by operator region

Source: IBA Insight


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IBAのワンストップ航空インテリジェンスプラットフォームであるIBA Insightを紹介します。IBAの広範なフリート、価値、市場データと飛行データ、専門家の意見とを組み合わせ、投資、リスクプロファイリング、航空機ポートフォリオの監視に大きな自信と保証を提供します。


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受賞歴のあるISTAT認定鑑定士の大規模なチームと 30年以上にわたる独自のデータを活用しているIBAは、価値評価市場のリーダーです。グローバルに活動し、航空機、エンジン、ヘリコプター、貨物機、航空貨物、発着枠、スペアなど、さまざまな資産の価値について、独立した公平な意見とアドバイスを提供しています。お客様の期待を超えるように常に努力しており、IBAの客観的な判断は、融資、資産の回収、商業開発、転売に必要な保証をサポートします。


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