Highlights:

  • Operating profit for Q3 2025 rose to €2.05 billion (GBP 1.77 billion), a 2% increase year-on-year.
  • Passenger revenue up by €177 million at constant currency compared with record Q3 2024.
  • Interim dividend of €0.048 per share announced, alongside near completion of €1 billion share buyback.

International Airlines Group (LSE:IAG), the parent company of British Airways, Iberia, Aer Lingus, and Vueling, reported an operating profit of €2.05 billion (GBP 1.77 billion) for the third quarter of 2025, a 2% rise compared to the same period last year.

Total revenue for the quarter was broadly unchanged at €9.33 billion (GBP 8.04 billion) versus Q3 2024, as flat passenger revenue and lower cargo performance were offset by growth in other business areas, including IAG Loyalty.

The group achieved an operating margin of 22.0%, up 0.4 percentage points, while its 12-month rolling margin stood at 15.2%. Adjusted earnings per share grew 27% for the nine months to 30 September 2025.

Passenger and Cargo Trends

Passenger revenue increased by €177 million at constant currency, on top of record performance in Q3 2024. However, passenger unit revenue (PRASK) fell 2.4% on a reported basis, or 0.3% at constant currency.

The group cited some softness in North Atlantic leisure demand, particularly from the U.S. point of sale, and greater competition in parts of the European market. In contrast, the South Atlantic and Asia-Pacific routes recorded stronger revenue growth. Around half of the 7.1% unit revenue decline on the North Atlantic route was attributed to foreign exchange effects.

Cargo revenue declined 6.9%, mainly due to lower pricing compared to the previous year, while Other revenue rose 3.6%, driven by ongoing expansion in IAG Loyalty programmes.

Tight Cost Management and Fuel Advantage

Non-fuel unit costs increased only 0.2%, in line with expectations, benefiting from procurement efficiencies and favourable currency movements. Employee unit costs rose 2.9%, reflecting wage adjustments, partly offset by productivity gains. Supplier costs improved by 2.9%, while ownership costs rose 9.1% due to deliveries of new, more efficient aircraft and investments in IT and customer service.

Fuel costs were €180 million (8.8%) lower than in the prior year, contributing to the improvement in quarterly profit.

IAG reported net leverage of 0.8x as of 30 September 2025, describing its financial position as providing flexibility for capital allocation. The company confirmed an interim dividend of €0.048 per share and said it had nearly completed its €1 billion share buyback programme initiated in February 2025.

Outlook and Full-Year Guidance

IAG reaffirmed its full-year guidance for 2025, with expectations of further revenue and earnings growth and continued margin progress. The group said demand for air travel remains healthy and forward bookings for the fourth quarter are positive.

Full-year capacity is projected to rise by around 2.5%, and non-fuel unit costs are forecast to increase by about 3%, in line with earlier guidance. Capital expenditure for the year is estimated at €3.7 billion (GBP   3.19 billion), while total fuel costs are expected to reach approximately €7.1 billion (GBP   6.12 billion).

IAG stated it remains on track to deliver another year of profit and margin growth in 2025.

IAG shares nearly dropped 7% to GBX 385.60 per share during trading session on 7 November 2025.