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6 hours ago
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Booming transatlantic ticket sales have lifted British Airways and its parent group to ever higher annual profits.
International Airlines Group, led by BA, announced post-tax profits edging up to €2.73bn (£2.26bn) for 2024, with operating profits up 22% on the previous bumper year to €4.3bn (£3.55bn), as passenger numbers continued to rebound from the Covid-era collapse.
The bulk of the operating profit was driven by the British flag-carrier for the Spanish-based group that also contains Iberia, Vueling and Level, as well as Ireland’s Aer Lingus.
The performance was seen as vindication of measures including a £7bn “turnaround” investment in BA, including new lounges and better technology to counter a faltering reputation for service and repeated IT-related failures.
The chief executive of IAG, Luis Gallego, claimed the results reflected “the successful execution of our transformation programme”.
IAG also grew its capacity by 6% overall last year, including on the lucrative transatlantic market, with BA now the market leader on London-US routes and Iberia increasing its share of the Latin American market from Europe.
Gallego said: “We are focused on continuing to make our brands the first choice for customers, by growing our network and enhancing the customer proposition, while our disciplined capital allocation ensures we can continue to invest in the business, deliver strong financial results and create sustainable value for our shareholders.”
In a sign of IAG’s flushed financial success, he announced that it would be paying a final dividend, taking the total dividend for the year to €435m (£359m), as well as embarking on a €1bn share buyback scheme.
Shares rose about 4% on Friday afternoon, taking the price near a five-year high and more than double where IAG shares were trading a year ago.
Premium travel on the transatlantic routes remains a cash cow for BA, which contributed £2bn to IAG’s coffers, up from £1.3bn in 2023.
Sean Doyle, the BA chair, said capacity on the routes had “matured”, with available seats only likely to rise by 1%. “But we do see demand remains robust. And we also saw a very strong recovery in business travel onboard in the transatlantic in the second half of the year,” he said.
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IAG’s results announcement still shows it does not believe business travel will return to pre-pandemic levels, particularly for short trips. However, affluent tourists are boosting its margins, and Doyle said BA was devoting ever more space to premium economy, with 15% more seats in the mid-range cabin than in 2019.
While analyst consensus is that IAG’s price will climb higher, some warned of risks ahead with Donald Trump in the White House. Julie Palmer, a partner at Begbies Traynor, a business recovery consultancy, said: “Despite current successes, IAG must remain wary of the potential headwinds of a volatile geopolitical climate, the possible impact of tariffs and a highly competitive travel market. There is some careful navigation to be done to capitalise on success and avoid unwanted turbulence in 2025.”
The group’s airlines carried 122 million passengers in 2024, up 5.6%; 46 million of them were travelling on BA services.
Doyle said Gatwick’s second runway, which gained backing but not planning ratification from the UK government on Thursday, was likely to see BA build up its presence again at London’s second airport. But he ruled out restoring its operations there to pre-pandemic levels, after switching BA’s focus almost entirely to Heathrow in the crisis in 2020.
He said: “I think strategies tried before haven’t necessarily worked, but we have a big presence – both BA and IAG – at Gatwick, and have been growing our businesses there for the last three years. So we would evaluate the opportunity to grow when the capacity came on – but it wouldn’t be in the form of a second hub.”
