International Airlines Group (IAG), the parent company of well-known airlines such as British Airways, Iberia, and Vueling, announced its financial results for the year 2024 on February 28, 2025. The group reported a net profit of €2.732 billion, reflecting a modest increase of 2.9% compared to the previous year. Despite these positive results, IAG did not quite meet analysts' expectations, which had forecasted higher profit figures.
The airline conglomerate experienced strong recovery, posting total revenues of €32.1 billion, which is 9% higher than the previous year. IAG's CEO, Luis Gallego, highlighted the significance of these outcomes, stating, "We are obtaining first-class margins and profits, aligning with the objectives we presented to the market just over a year ago." This growth is attributed to the resurgent demand for travel, particularly leisure flights, as the aviation sector rebounds from the pandemic.
Aside from the positive financial results, IAG announced the distribution of a supplemental dividend of €0.06 per share, contributing to a total annual dividend of €0.09, or €435 million distributed among shareholders. This decision came as part of IAG's commitment to return excess capital to its investors, which is underscored by the implementation of share buyback programs totaling up to €1 billion within the next 12 months. The previous buyback program of €350 million was concluded recently, signaling the group’s focused approach to enhancing shareholder value.
Gallego emphasized the importance of the workforce behind IAG's success, remarking, "Our performance would not have been possible without the hard work and dedication of all our employees, who continue to drive the transformation across our group." This perspective highlights not just the financial accomplishments but also the human element involved in reaching these milestones.
The financial health of IAG has also improved, as the group managed to reduce net debt from €9.245 billion to €7.517 billion over the year, decreasing the net debt-to-EBITDA ratio to 1.1 times. Such performance demonstrates the efficiency and effectiveness of IAG’s operational strategies. For 2025, the airline expects to maintain this momentum, investing €3.7 billion as it continues to modernize its fleet and expand its route offerings.
Continuing with investments, IAG forecasted capacity growth of around 3% for the upcoming year, maintaining its commitment to meeting customer demand and enhancing operational efficiency. New aircraft will be delivered to support growth, with Iberia focusing on increasing transatlantic frequencies and Vueling preparing for new routes across Europe and Africa.
The stock market responded positively to the announcement, with IAG’s shares rising over 5% shortly after the results were disclosed. This reflects the market's confidence in the airline’s strategic direction and future profitability. Analysts noted the share price increase as indicative of strong investor sentiments, demonstrating significant interest following the improved financial disclosures.
Overall, the financial results of IAG paint a picture of cautious optimism. While the company has seen solid gains, the challenges of recovering fully to pre-pandemic levels remain, especially with short-haul business travel still lagging. Nevertheless, the airline industry as a whole is on the rebound, and IAG’s current growth demonstrates its resilience amid broader economic conditions.
The announcements of dividends and share buybacks signal not only stability but also confidence from IAG's management as they navigate the post-pandemic recovery phase. Investors and analysts alike will be watching closely to see how the company leverages this positive momentum going forward, especially with such significant investment plans and capacity expansions on the horizon.