International Airlines Group (IAG) has unveiled a €1billion (£830million) share buyback scheme after reporting record profits for the second successive year. The Aer Lingus owner said its operating profits rose by 22.1 per cent to €4.3billion in 2024, against €3.5billion the previous year, as cheaper fuel prices complemented growing customer demand.
Higher ticket prices and the continued recovery in leisure travel helped boost the firm's turnover 9.5 per cent higher to €32.1billion. British Airways drove most of IAG's sales growth as the UK flag carrier's passenger revenues expanded by £798million to over £13.4billion.
The airline flew 46.2 million people, a 6.6 per cent year-on-year increase, supported by its passenger load factor - share of seats filled - rising by 1.6 percentage points to 85.2 per cent. IAG's total passenger numbers grew by 5.6 per cent to 122 million last year; they rose in Europe by 5.8 per cent to 63.3 million as the company prolonged some operating seasons outside the peak summer period.
Bumper result: British Airways owner International Airlines Group (IAG) has unveiled a €1billion share buyback scheme after reporting record profits for the second successive year. Following the bumper performance, IAG plans to pay shareholders a €0.06 per share final dividend and repurchase €1billion of its shares.
Luis Gallego, chief executive of IAG, said: 'These results highlight the quality of our businesses and effectiveness of our strategy, underpinned by the successful execution of our transformation programme across the group. 'We are delivering world-class margins and returns, in line with the targets we set out to the market just over a year ago.'.
International Airlines Group shares were 5.1 per cent higher at 355.9p on Friday morning, making them the FTSE 100 Index's biggest riser. It also takes their gains over the past year to approximately 132 per cent, although the company's shares remain below their pre-pandemic peak.
Mark Crouch, market analyst at eToro, said: 'IAG had struggled to win back investors after the pandemic and the resulting inflationary fallout. 'Even as earnings rebounded and passenger numbers approached full capacity, investors remained cautious about jumping back on board with IAG.
'However, with global passenger numbers now surpassing pre-pandemic levels and demand for air travel on the rise, airline investments are gaining popularity. The return of IAG's dividend, along with punchy share buybacks, appears to have tempted investors back into the fold.'.
But Julie Palmer, partner at Begbies Traynor, cautioned that IAG 'must remain wary of the potential headwinds of a volatile geopolitical climate, the possible impact of tariffs and a highly competitive travel market'. She added: 'There is some careful navigation to be done to capitalise on success and avoid unwanted turbulence in 2025.'.
IAG warned that British Airways' growth over the next few years will be impacted by delays in delivering new aircraft and engine maintenance issues. BA has scaled back schedules to numerous long-haul destinations following delays to maintenance work on the Rolls-Royce Trent 1000 engines that power BA's Boeing 787 Dreamliner aircraft.
It has pulled flights to Bahrain and Kuwait, postponed launching its direct service to Kuala Lumpur until April, and suspended its London Heathrow-Abu Dhabi route for the upcoming summer. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
