IAG, parent company of Aer Lingus, British Airways, Iberia and Veulling, reports that the easing of Covid controls has improved demand in the first quarter, especially from premium travel. Strong customer demand is expected to drive profitability from the second quarter onwards.

“Demand is recovering strongly in line with our previous expectations,” said Luis Gallego, the chief executive of IAG. “We expect to be profitable from the second quarter onwards and for the full year. Premium leisure continues to be the strongest performing segment and business travel is at its highest level since the start of the pandemic.”

However the bullish figures weren’t sufficient to prevent the IAG share price from slumping.

The company, which reported an operating loss of €731m in the first quarter compared with more than €1bn in the same period last year, added that there had been “no noticeable impact” on the business from the war in Ukraine.

Passenger capacity was 65% of 2019 capacity, up from 58% in Q4 2021, as the group’s airlines continued to restore capacity in advance of the Summer flying programme. Current passenger capacity plans for remainder of 2022 are for around 80% of 2019 capacity.

Gallego added that by Q3, Transatlantic business would almost be back to pre-pandemic levels.

“As a result of the increasing demand, forward bookings remain encouraging,” he said. “We expect to achieve 80% of 2019 capacity in the second quarter and 85% in the third quarter. North Atlantic capacity will be close to fully restored in the third quarter.”