IAG Delivered Record 2025 Profit

Last Updated: Mar 02, 2026

IAG, the parent company of British Airways, Iberia, Aer Lingus, and Vueling, reported record full-year 2025 results.

Revenue reached €33.213 billion ($39.2 billion)
Operating profit before exceptional items rose to €5.024 billion ($5.9 billion
Profit after tax increased to €3.342 billion ($3.9 billion).
It also announced a new €1.5 billion ($1.8 billion) excess cash return plan, starting with a €500 million ($590.3 million) share buyback.

IAG is one of Europe’s largest airline groups. Its results provide a useful picture of how the airline market is performing, especially in Europe and on long-haul routes.

Comparison to the same period last year

Compared with full-year 2024, IAG’s 2025 results were stronger across most major financial metrics.

Revenue increased from €32.100 billion ($37.9 billion) in 2024 to €33.213 billion ($39.2 billion) in 2025, up 3.5 percent.
Operating profit before exceptional items rose from €4.443 billion ($5.2 billion) to €5.024 billion ($5.9 billion), up 13.1 percent.
Profit after tax increased from €2.732 billion ($3.2 billion) to €3.342 billion ($3.9 billion), up 22.3 percent.

The group also improved on profitability and leverage.

Operating margin before exceptional items increased from 13.8 percent to 15.1 percent,
Net debt to EBITDA before exceptional items improved from 1.1x to 0.8x, showing a stronger balance sheet going into 2026.
Free cash flow fell from €3.556 billion ($4.2 billion) in 2024 to €3.146 billion ($3.7 billion) in 2025, mainly due to IAG increasing capital spending.

Why profit grew faster than revenue

Revenue grew by 3.5 percent, but profit grew much faster. Operating profit before exceptional items increased by 13.1 percent, and adjusted earnings per share rose by 22.4 percent. In simple terms, IAG became more efficient and retained more profit per euro of revenue.

A major reason was lower fuel costs than in 2024. The group also improved operations and benefited from solid demand in key markets. Its operating margin before exceptional items rose to 15.1 percent, up from 13.8 percent a year earlier. That is a strong result for a large airline group.

What this says about the travel market in 2025

IAG’s results show that travel demand remained strong overall, but not equally across all markets. The company said some areas were softer, including parts of the US economy, the leisure segment, and some intra-European travel. At the same time, premium travel and several core long-haul markets stayed strong.

This mix is important. It shows airlines are still seeing demand, but they need to manage capacity carefully and focus on their strongest routes. IAG’s broad network helped it balance weaker markets with stronger ones.

What helped beyond ticket sales and what to expect in 2026

IAG said better operational performance also supported the results. The group reported improved on-time performance and stronger customer satisfaction. Better reliability can reduce disruption costs and improve the passenger experience at the same time. The company also continued investing in aircraft, onboard products, customer service, and IT, while non-airline businesses such as IAG Loyalty helped diversify earnings.

For 2026, IAG said it has a positive outlook and plans around 3 percent capacity growth, with strong free cash flow expected to continue. The main question now is whether IAG can keep its strong margins if fuel prices rise or if demand weakens in some markets. The group starts 2026 from a stronger position, but investors will be watching costs, fuel prices, and operational risks closely.

IAG’s strong 2025 results also fit a wider pattern of resilient travel demand across its major hubs and carriers. One useful signal is Heathrow’s record 84.5 million passengers in 2025, which supports the view that demand remained strong in one of British Airways’ most important home markets.

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