British Airways’ parent company International Airlines Group (IAG) said its operating profit surged by 22.1 per cent last year to 4.3 billion euros (£3.6bn). That is up from 3.5bn euros (£2.9bn) in 2023.
The company attributed the increase to higher revenues per passenger and lower fuel costs.
Its passenger revenue per available seat kilometre flown increased by 3.1 per cent, while fuel costs per unit declined by 5.2 per cent.
It is proposing to pay a final dividend to shareholders for 2024 which will take the total payments to 435m euros (£359m).
Shares in IAG rose up to three per cent by 10am GMT in early morning trading on Friday following the company’s announcement, leaving the share price up more than 92 per cent across the last six months. While it remains below pre-pandemic levels, improved profit margins have the group on an upward trajectory.
However, AJ Bell investment director Russ Mould highlighted potential areas for further improvement.
“More dividends, more share buybacks; it’s remarkable how far International Consolidated Airlines has travelled since the depths of the pandemic when it was drowning in debt,” Mr Mould commented.
“Having nursed its balance sheet back to good health, the airline operator has got itself in a comfortable enough position to reward shareholders while continuing to invest in expanding its fleet of aircraft.
“It has enjoyed growth in revenue, operating profit, free cash flow and margins – everything that an investor hopes a company will do. So far so good, but the outlook might not be as rosy as IAG implies.
“It flags strong customer demand yet concerns about the global economic outlook imply stormier weather for airlines. Consumers might not feel as flush with their cash, while business travellers could look to do more meetings virtually if their employer is seeking cost efficiencies.”
IAG chief executive Luis Gallego 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.
“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.
“We are particularly pleased to announce that IAG is proposing a final dividend which takes our total dividend for the year to 435m euros and intend to return up to a further one billion euros (£826m) of excess capital to shareholders in up to 12 months.”
IAG recorded a revenue growth of 9.0 per cent, which it said was driven by “our market-leading network, strong brands and operational focus”.
British Airways made an operating profit of £2.0bn, up from £1.3bn in 2023. That was secured with a 14.2 per cent margin.
IAG, which also owns the Iberia, Vueling, Aer Lingus and Level airlines, said the group’s available seat kilometres – a measure of its capacity – grew by 6.2 per cent in 2024.
Its airlines carried 122 million passengers in 2024, up 5.6 per cent from 116,000 in 2023.
For British Airways alone, passengers numbers increased by 6.6 per cent from 43 million to 46 million.
John Moore, an analyst at the finance firm RBC Brewin Dolphin, said: “IAG has delivered a strong set of results, with good performance across sales, margins, and cost reductions. The final dividend and share buyback programme are the icing on the cake. Demand for travel remains strong, despite previous concerns it would dissipate post-pandemic.”
