European airlines are experiencing a surge in travel demand, despite soaring inflation, higher interest rates, and rising ticket prices. Aer Lingus, which operates a large portion of its transatlantic capacity out of Manchester, is seeing strong demand from Irish and US passengers, with load factors remaining high. While the short-haul market for business travellers between Ireland and the UK is experiencing some softness, leisure demand to Southern Europe remains strong. International Airlines Group (IAG), which owns Aer Lingus, British Airways, Iberia, Vueling, and Level, reported an operating profit in the first quarter of 2023, and has raised its 2023 guidance. IAG’s dynamic pricing model allows it to maintain competitive prices for its customers, but higher costs are generally passed on to them. While IAG is experiencing high demand now, it acknowledges the volatility of the current environment. Additional aircraft stands and terminal capacity remain essential for Aer Lingus to expand its use of Dublin as a hub, although a third terminal at Dublin Airport is currently under consideration by the DAA.
