International Airlines Group reports strong financial results and plans significant share buyback

International Consolidated Airlines Group, the parent company of British Airways, has announced a share repurchase programme worth €1.5 billion after posting record profits. The airline group, which also includes Iberia, Aer Lingus, and Vueling, revealed a 22 per cent increase in profits after tax, amounting to €3.34 billion. This impressive performance has been attributed to the ability to generate more revenue from passengers, despite a slight decline in passenger numbers.

In 2025, IAG carried 121.5 million passengers, which was marginally fewer than the previous year. However, revenue rose by 3.5 per cent to €33.2 billion due to higher ticket prices. The company has indicated its confidence in the current market dynamics, stating that long-term demand growth in core markets is expected to continue alongside a constrained supply situation in the industry.

Chief Executive Luis Gallego highlighted the importance of revenue generation per passenger, with operational profit margins reaching historic levels of 16.2 per cent at Iberia and 15.1 per cent at British Airways. This success places IAG in a strong competitive position within the global aviation market.

Looking ahead, the group plans to increase capacity by approximately 2 per cent to 4 per cent annually. Growth projections are supported by the constrained global supply dynamics caused by delivery delays from aircraft manufacturers, leading to orders being used more for replacements than growth.

The North Atlantic market, although historically significant for IAG, has recently shown signs of stagnation, with low single-digit growth expected over the next few years. In contrast, mid-single-digit growth is anticipated in the South Atlantic, where IAG also holds a leading position.

The company acknowledged challenges in the short-haul flight segment within Europe, which comprises more than a third of its business. Rising operating costs and decreasing demand in northern Europe present ongoing hurdles. Analyst predictions suggest that IAG’s shares are poised to test all-time highs as the current buyback programme unfolds.