Fuel costs dropped 7% to €7.1b, while passenger revenue grew 2.5%.
Consumers are prioritising leisure travel following the pandemic lockdowns – and despite big price jumps in airfares in recent years as overall inflation soared.
IAG said it flew nearly 122 million passengers in 2025, a year in which it agreed on a multibillion-dollar order for Boeing and Airbus planes.
“It’s hard to fault the latest set of results, but the market seems to want more,” said Russ Mould, investment director at AJ Bell after the group’s share price shed 5.4% in London morning deals.
Hargreaves Lansdown equity analyst Aarin Chiekrie said: “Despite the run-up in share price over the last year or so, the valuation still looks attractive thanks to its impressive profit growth.
“With a strong balance sheet, market position and generous shareholder returns, there still looks to be some upside on offer.”
Yesterday IAG increased its latest dividend payment and announced a share buyback, which will return €1.5b to shareholders.
Last year, it also submitted a bid for a stake in TAP Air Portugal, joining Lufthansa and Air France-KLM in seeking a share of the Portuguese carrier.
“We are currently participating in the partial disposal process by the Portuguese Government of TAP, which we think is a strategically interesting opportunity for the group but will have to be on terms that create value for IAG’s shareholders,” the British Airways owner added in yesterday’s statement.
Air-France-KLM last week announced annual net profit of €1.75b, a record for the Franco-Dutch group as it focused on premium offerings last year and benefited from lower fuel prices.
– Agence France-Presse
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