Sparks - International Airlines Group

International Airlines Group’s (IAG’s) Q125 results show genuine momentum. Group revenue rose 9.6% to €7.04bn, with growth in all categories, driving operating profit up to €198m and lifting the margin to 2.8%. Premium cabins continue to hold strong as passengers splurge on extra legroom and lounge access, while the sustained slide in global oil prices helped push fuel costs per available seat kilometre down 7.1%. Considering IAG’s largest cost is fuel, some €7.5bn projected in 2025, this will deliver a welcome relief against FX headwinds and wage inflation.

On the ground, British Airways, Iberia and Vueling are notching up top punctuality awards, which is more than a PR win – it is rebuilding customer confidence after years of disruption. At the same time, fresh orders for 53 widebody jets show IAG is modernising its long-haul fleet to match demand and add capacity to drive future growth.

Meanwhile, management is keeping its balance sheet in check, cutting net debt and channelling capital into €530m of buybacks and a proposed €288m dividend. The market is obviously watching for any weakness following the introduction of tariffs, post the period end. Here management points to Q2 bookings being ahead of seasonal norms with strength in Latin America and Europe, and North America described as ‘robust’. As a result, full-year guidance is unchanged.