IAG (BA and Iberia) increases net profit by 19.3% in 2025

IAG, the holding company that controls British Airways, Iberia, AirLingus and the Spanish low-cost carrier Vueling reported a higher-than-expected profit in 2025, thanks to lower fuel costs and resilient routes to South America, with a focus on premium class services.

IAG reported an operating profit before extraordinary items of EUR 5.02m, compared to EUR 4.97bn expected by analysts and EUR 4.443bn in 2024, a growth of 13.1 per cent. Net profit also rose sharply to EUR 3.342 billion with a growth of 19.3 per cent.

IAG has stated that it will return EUR 1.5 billion of excess cash to shareholders over the next 12 months, starting with a EUR 500 million share buyback to be completed by the end of May 2026, while it plans to allocate around EUR 448 million to dividends. For the current year, IAG has forecast an operating margin of 12-15% and a return on invested capital of 13-16%. Last year the margin stood at 15.1%.

Revenues grew by 3.5 per cent to EUR 33.2 billion despite a slight decline in passengers carried in 2025 to 121.5 million (-0.4 per cent). North America, in which IAG has a 49 per cent market share across all group companies, was weak, due to stricter migration policies in the US and rising geopolitical tensions, which weighed on IAG's profits: these destinations are set to grow in the single digits during the year.

In contrast, South America, where the carrier is the leader for connections from Europe, runs. During 2025, Iberia continued its strategy of increasing frequencies to its main South American destinations with a growth of 4.4% for the year, also through the new Airbus A321 XLR aircraft that allows more frequencies to secondary locations.