Proactive Investors - British Airways owner International Consolidated Airlines Group (LON:ICAG) (IAG) reports first-quarter numbers on Friday and expectations are high.
Recent updates from rivals easyJet (LON:EZJ), Jet2 and TUI (LON:TUIT) have come in well above forecasts and while IAG is much more international, it will be a major surprise if it is not equally upbeat.
In March, Deutsche Bank (ETR:DBKGn) upgraded IAG because the outlook for the sector had "materially improved".
In a note on the flagship carriers, analyst Jamie Rowbotham said it had upgraded even though he had been prudent on yields, non-fuel unit costs and on oil, which has since fallen further.
"We nonetheless see the potential for operating profits in 2023 to now be more than 20% higher than we previously envisaged."
IAG swung back into the black in 2022 and for this quarter has predicted an operating loss of around €200mln in what is normally its quietest quarter.
Capacity was also predicted to be around 96% of pre-pandemic levels, but rivals have been ahead of their capacity forecasts and if that pattern has been repeated at IAG, the results will reflect that.
City analysts forecast revenues of circa €5.8bn compared to €3.4bn a year ago, underlying losses slashed to €183mln from €754mln last time, and a loss after tax and exceptional items of €308m down from €787mln.
"We think focus will be on outlook, potential disruption from service providers, Air Europa and balance sheet," said UBS.
Full-year 2023 operating profit, before exceptional items, is seen in the range of €1.8bn to €2.3bn, with most of the improvement over 2022 in the first half of the year.
“We are transforming our businesses, with the intention of returning IAG to pre-Covid levels of profit within the next few years, through major initiatives to improve customer experience and operational performance,” said Luis Gallego, IAG chief executive in February's results statement.
One thing to watch for is debt, which was a hefty €10.4bn at the end of December but if things are going as swimmingly as rivals suggest, should be on the way down.