IAG reports significant revenue growth as travel demand remains strong

International Consolidated Airlines Group (IAG), the parent company of British Airways, Iberia, and Aer Lingus, announced a robust performance for the first quarter of 2025. The airline saw a revenue increase of 9.6%, reaching €7 billion from January to March. This growth corresponded with an impressive operating profit surge of 191.2%, jumping to €198 million from €68 million in the same period the previous year. The improved financial performance was attributed to a notable rise in revenue alongside a reduction in fuel costs, which helped to offset expected expenses. The operating margin improved to 2.8%, showcasing the company’s efficiency and strategic management. IAG's chief executive, Luis Gallego, highlighted strong demand for air travel across key markets, particularly in the premium cabins. The company expressed confidence in restoring its operational strength, with a focus on replacing its aging fleet as well as expanding with new aircraft. IAG reported that it delivered five new planes during this quarter, and it exercised options for an additional 18. Furthermore, it has placed orders for 53 new aircraft, including 21 Airbus A330-900neo planes and 32 Boeing 787-10s, scheduled for delivery from 2028 to 2033. These additions are mainly aimed at replacing older aircraft but are expected to contribute to growth in core markets. Despite economic uncertainties and pressures on consumer incomes, demand for IAG's services remained resilient. Analysts noted that bookings for the second quarter were at 80% of target levels by early May 2025, indicating a robust outlook for the coming months. Furthermore, with bookings for the latter half of the year aligning with previous years, IAG maintained its full-year guidance, demonstrating their confidence in sustained demand. The company's shares experienced a slight increase, rising 1.4% by the end of week trading. IAG's strategic focus on high-demand routes, particularly across the North Atlantic, coupled with the successful performance of their premium offerings, suggests a cautious yet optimistic view of the airline's operational trajectory. Continued investments in aircraft and emphasis on strong customer demand reinforce the company's commitment to improving both financial health and service quality, setting the stage for potential positive market reception in the months to come.