The parent company of British Airways, International Airways Group (IAG), has seen its share price drop sharply, despite record quarterly profits.

Despite shares being up by 2.6% at the opening of the market, shares in IAG dropped by 3% later this morning.

Reuters reported that although consumers continue to travel despite the cost-of-living crisis, rising oil prices and the risk of recession have led to investors pulling funds out of the company. Air France-KLM has also seen its shares reach an all-time low, citing a lagging booking curve, a lack of guidance on profitability for the year and a slight profit miss.

IAG owns a range of airlines, which includes British Airways, Vueling, Iberia and Aer Lingus. The Anglo-Spanish firm has a registered office in Madrid and a corporate office in London.

In the group’s Q3 report, it recorded a 39% year-on-year rise in quarterly operating profit before exceptional items to €1.7bn, topping the €1.55bn expected by analysts.

The firm also said that its fuel unit costs for the quarter were down 6.2% year-on-year, and it sees the rest of the year as an opportunity for strong recovery in its margins, operating profit and balance sheet, taking it towards its levels of capacity pre-COVID.

IAG’s chief executive officer, Luis Gallego, said: "This quarter represents a record third quarter performance for IAG. This is allowing us to invest in the business and reduce a significant amount of our debt.

"During the third quarter we saw sustained strong demand across all our routes, in particular the North and South Atlantic and in all leisure destinations around Europe. We continue to develop our hubs of Barcelona, Dublin, London and Madrid, supported by our fleet deliveries and future orders.

"Our strong financial performance is enabling investment in our people and allowing us to further improve customer experience. At the same time, we will keep working towards our sustainability goals.”

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