IAG share price: 3 things to watch out for in its Q1 results

International Airlines Group (IAG) is set to release its Q1 results on Friday, with investors hoping for more of the same this year after the group recorded record profits in 2018 and generate major returns for shareholders.

But with the British Airways owner already warning shareholders that profits for the year will be flat this financial year, investors will likely be disappointed by the upcoming results this week.

IAG profits flat in 2019

At current fuel prices and exchange rates, IAG expects its 2019 operating profit before exceptional items and impacts of IFRS16 to be in line with €3.23 billion reported last year.

Meanwhile, passenger unit revenue is expected to improve at constant currency and non-fuel unit cost is expected to be flat at constant currency.

Rising fuel prices

IAG was able to overcome rising fuel prices in 2018, with the group managing to record a 9.5% increase in profits last year.

‘This was a very good performance despite three significant challenges: fuel prices increasing 30 per cent, considerable air traffic control disruption and an adverse foreign exchange impact of €129 million,’ IAG CEO Willie Walsh said in its full-year results.

This year, the company will face the same trio of headwinds, with investors hoping that the company can weather these issues as well as it did over the previous 12 months.

IAG records increase in passenger numbers

The group, which also owns Spanish airlines Iberia and Vueling, saw its traffic and passenger numbers surge in March, with growth driven by its core domestic units.

IAG saw passenger numbers increase to 9.2 million in March, representing a 5.7% from 8.7 million during the same month a year ago.

In the year to date, IAG reported passenger numbers were up 6.2% to 24.4 million from 23 million. Investors will be hoping that this growth will continue throughout 2019 despite Brexit threatening to weaken demand.