The owner of British Airways and Iberia, IAG, reported a shrinking €2.6bn (£2.3bn) loss for the first nine months of 2021.
However investors dumped IAG shares this morning after it indicated full year losses would still hit €3bn as passenger capacity has been slow to recover.
Its lucrative UK-US travel corridor is due to finally reopen on Monday.
IAG shares are down more than 2.2 per cent at 165p, making it the biggest loser on the FTSE 100 this morning.
The airline said in the three months to the end of September, passenger capacity was 43.4 per cent of 2019 levels, although this was up from 21.9 per cent in the three months to end of June.
For the third quarter, the airlines group reported an operating loss of €452m compared to € 1.9bn for the same period last year.
The aviation group’s boss Luis Gallego said the reopening of UK-US travel would prove vital for BA’s recovery.
“The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry. British Airways is serving more US destinations than any transatlantic carrier and we’re delighted that we can get our customers flying again.”
“We continue to capitalise on surges in bookings when travel restrictions are lifted.,” he added.
Passenger revenue also improved in the quarter, hitting € 2bn, up from just € 715m during the same period in 2020 at the height of the pandemic.
British Airways owner still expects to book a huge operating loss before of close to €3bn for the full financial year, it said this morning.
Russ Mould from AJ Bell said the results showed an airline ” still stuck on the runway”.
“It did report a sharp narrowing in third quarter losses but IAG is not yet able to point to return to profitability in 2022 with any degree of confidence.
“The best news for IAG in recent weeks has been the reopening of travel to North America. The long haul route from London and New York had been British Airways’ jewel in the crown for some time and if the business is to truly shine it needs a steady flow of passengers between the two cities.
Mould added: “This dependence on long haul flights has been reinforced after IAG’s apparent adoption of a plan to launch a budget short haul carrier was abandoned almost as soon as it was announced recently.
Richard Hunter, from Interactive Investor said IAG’s “investors still need to buckle up for the long haul.”
“Cash operating costs for the third quarter were €260m per week, underlining the need for the airline to return to some kind of normality as soon as possible. A cocktail of borrowings which have been necessary to keep the company afloat has resulted in a net debt figure which now stands at €12.4bn”.