London (AFP) – IAG, the owner of British Airways and Spanish carrier Iberia, said Friday that its net profit jumped 44 percent in the first six months of the year on “strong demand.” Profit after tax came in at 1.3 billion euros ($1.5 billion) compared with 905 million euros in the first half of 2024, IAG said in a statement. Group revenue increased eight percent to 15.9 billion euros in the January-June period, “reflecting strong demand for our network and brands,” it added. The company, which in May announced a multi-billion-dollar order for Boeing and Airbus planes, also owns Spanish carrier Vueling and Irish airline Aer Lingus.
“Our strong performance in the first half of 2025 reflects the resilience of demand for travel,” IAG chief executive Luis Gallego said in Friday’s statement. “We continue to benefit from the trend of a structural shift in consumer spending towards travel,” he added.
– Positive outlook – IAG expressed confidence “in delivering good earnings growth” for the full year, “whilst being mindful of the ongoing uncertainty that may result from the geopolitical and macroeconomic backdrop.” Shares in the group initially jumped following the update, before showing a loss of 0.9 percent on London’s benchmark FTSE 100 index, which was down overall in morning deals as investors tracked developments over US tariffs.
IAG “shares have had a turbulent time more recently, weighed both by geopolitical uncertainty as well as fears that travel to the US would be impacted in reaction to its decision to declare a trade war on many countries,” Richard Hunter, head of markets at Interactive Investor, said Friday. “However, while there has been some pressure of late on economy flights to the (United) States, the strength of its premium cabin offering has more than offset any weakness.”
IAG said the group’s total passenger revenue grew 5.6 percent to 13.8 billion euros in the first half. The earnings were impacted by a £40-million ($53-million) hit to BA after a fire at an electrical substation forced a shutdown at London’s Heathrow Airport in March. The airline meanwhile in June cancelled flights between Heathrow and some Middle East destinations following US strikes on Iran.
Heathrow, Europe’s busiest hub by passenger numbers, unveiled Friday a £49-billion expansion plan, including the costs of building a long-awaited third runway, approved by the UK government after years of legal wrangling. The commercial aviation sector has recovered from the turbulent Covid years when airlines were forced to ground planes, triggering a sector-wide jobs cull. Consumers are meanwhile prioritising leisure travel following the pandemic lockdowns — and despite big jumps to air fares in recent years as overall inflation soared.
© 2024 AFP
