IAG hails 'exceptional' 2025 as annual profit tops expectations

International Consolidated Airlines Group SA on Friday struck an optimistic tone, pointing to ‘compelling market dynamics’ and supportive trends in its core markets as it delivered better-than-expected annual profit.

The Madrid-based owner of British Airways, Iberia, Aer Lingus and Vueling said operating profit before exceptional items grew by 13% to €5.02 billion in 2025, from €4.44 billion in 2024, beating company-compiled consensus of €5.01 billion.

Pretax profit for the year shot up 26% to €4.51 billion from €3.56 billion, with revenue improving 3.5% to €33.21 billion from €32.10 billion.

For the final quarter alone, pretax profit was up 46% to €890 million with revenue edging down 0.8% to €7.98 billion. Operating profit before exceptional items was 2.5% lower in the final quarter at €1.09 billion.

Chief Executive Officer Luis Gallego called it an ‘exceptional performance’.

‘We are confident as we look to the future, with compelling market dynamics, long-term secular growth and a clear plan to leverage our business model and deliver our strategy,’ he added.

In 2025, available seat kilometres grew 2.4%, and by 1.8% in the final quarter. Passenger revenue per ASK increased 0.1% for the year but fell 2.1% in the fourth quarter. Non-fuel costs per ASK rose 2.8% for the year, but dropped 1.5% in the quarter.

On the key North Atlantic route, IAG said ASKs grew 1.4% in 2025 on-year, although passenger load factor for the region was down 1.6 points versus 2024 to 83.5%.

IAG said it expects the North American market to grow at low-single-digits over the medium term.

IAG, on Thursday said it will return €1.5 billion to shareholders over the next 12 months, including a €500 million buyback to be completed by end-May.

IAG announced a €0.05 per share final dividend, down from €0.06 a year prior, taking its full year payout to €0.098, up from €0.09.

IAG said market dynamics are ‘compelling – secular long-term demand growth in our core markets and constrained supply in a consolidating industry.’

‘The outlook for travel trends continues to be supportive, particularly in our core markets. We will continue to execute on our strategy, supported by our transformation programme. This will enable the continuing delivery of earnings growth at world-class margins, as well as significant free cash flow, which will help to strengthen the balance sheet as we build towards a step up in capital expenditure.’

IAG said it plans grow capacity (measured in ASKs) by around 2% to 4% each year.

‘We expect revenue generation from our capacity growth to be supported by constrained global market supply dynamics for a number of years due to delivery delays from the aircraft manufacturers, with orders increasingly likely to be used as replacements rather than for growth,’ the firm added.

Shares in IAG were up 0.6% at 460.10 pence each in London on Friday morning. The wider FTSE 100 was up 0.5%.

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