IAG, the owner of British Airways, is returning €1.435 billion to its shareholders following a buoyant holiday trading period that saw its quarterly operating profit nearly double to €961 million.
The group – which also includes Iberia, Aer Lingus and Vueling – is the latest FTSE 100 airline to bounce back from pandemic-related turmoil, reporting record revenues and profitability.
From a low of just under £1 per share in mid-2022, IAG’s stock approached 367p this month. After dipping slightly, the share price rose over 3% in early trading on Friday, driven by news of a new €1 billion share buyback. This follows €350 million of recent repurchases and a total dividend of 9 euro cents per share.
Full-year operating profits climbed 22% to €4.28 billion on revenues of €32.1 billion, comfortably outpacing City expectations. Notably, IAG increased its profit margin from 11.9% to 13.8%—well above the industry’s usual performance threshold. British Airways alone, carrying 46 million of IAG’s 122 million annual passengers, posted a profit margin of 14.2%.
IAG’s traditionally lucrative business-travel market has yet to recover fully, but the company highlights robust consumer demand for leisure and “visiting friends and relatives” trips, especially on transatlantic routes. Despite incurring one-off costs such as a restructuring at Iberia and an aborted takeover of Air Europa, the group reduced its net debt from €9.2 billion to €7.5 billion, helped by a strong cash flow of €3.5 billion last year.
Chief executive Luis Gallego said that “strong customer demand continues,” fuelling expectations of further gains in 2025. While rival short-haul carriers like Ryanair and easyJet have struggled with weaker Christmas trading, IAG’s fortified position in long-haul markets appears to be paying off.