Airlines Stock: IAG Profits Soar, Announces Billion-Euro Buyback

International Airlines Group (IAG), the parent company of British Airways, has significantly outperformed market expectations in 2024 with an impressive 27% increase in operating profit to €4.4 billion. Revenue grew by 9% to €32.1 billion, driven primarily by strong performance on transatlantic and European routes. The core British Airways business delivered an operating profit of £2.0 billion, up substantially from £1.3 billion in the previous year, achieving a remarkable 14.2% profit margin. Passenger revenue per available seat kilometer increased by 3.1%, while unit fuel costs decreased by 5.2%, contributing to the overall strong financial performance. IAG stock responded positively to these results, climbing more than 3% in London trading.

Shareholder Returns and Financial Outlook

The airline group, which includes Iberia, Aer Lingus, Vueling, and Level alongside British Airways, has announced generous returns to shareholders. A total dividend of €0.09 per share for 2024 amounts to €435 million, with the final payment scheduled for June 30, 2025. Additionally, IAG plans to implement a share buyback program worth up to €1 billion over the next twelve months. The company's financial position has strengthened considerably, with leverage ratio improving to 1.1 at the end of 2024, down from 1.7 in 2023 and 3.1 in 2022. This improvement has earned IAG investment-grade status from rating agencies Moody's and S&P. Looking ahead, the group anticipates capacity growth of 3% in 2025, with management expressing confidence in continued strong demand across its core markets.