On the back of its strong 2024 results, the British Airways’ owner has set a €1bn share buyback.
The company generated a free cash flow of €3.6bn in the year, up from €1.3bn in 2023, which was driven by the increase driven by its strong operating profit increase. Operating profit for the year was up 22.1% to €4.3bn and for the quarter it totalled €961 million, nearly doubling from €502 million in the fourth quarter 2023.
International Airlines Group (IAG) revenues totalled €32.1bn for the full year 2024, up 9%. Fourth quarter revenues totalled €8bn, up 11.4%.
The company’s operating margin for the year totalled 13.8%, up 1.9 percentage point compared to 2023. For the fourth quarter, operating margin was up seven percentage points to 13.9%.
Profit after tax was up 2.9% to €2.7bn, or a basic earnings per share of 55.7 cents per share. For the fourth, quarter, profit after tax was down 22.2% to €392 million.
The airline group’s consolidated capacity was up 6.2% in the year and 4.3% for the fourth quarter.
IAG’s results were driven by strong demand throughout 2024, which has continued into 2025. Leisure travel “remains robust” and noted that customers have shifted towards experiences over material purchases.
The company’s loyalty revenues were up 18.4%, totalling £2.4bn. Operating margin was flat at 17.3%, a negative 0.6 percentage point from 2023.
“One of the group’s strategic imperatives is to drive earnings growth through asset-light businesses, with the growth of IAG Loyalty a particular priority,” the company read in its report. IAG Loyalty operating profit was £420 million, up from £367 million in 2023.
The company’s airlines include Aer Lingus, British Airways, Iberia, and Vueling.
Aer Lingus’ revenues totalled €2.4bn, up €102 million – including €2.3bn in passenger revenue, up €95 million. The airline was impacted by industrial action in summer last year. In addition, while it benefits from the immigration pre-clearance at its Dublin hub, the company said it was facing strong competition at the airport from US carriers. Despite this, the airline’s operating profit was down €20 million to €205 million. Operating margin was down 1.3 percentage point to 8.6%.
Aer Lingus received two A321XLR aircraft to its fleet at the end of last year, which will be used for long-haul services to the US this year.
British Airways reported both the largest revenues and highest revenue increase for the year, totalling £14.4bn, up £842 million. Passenger revenues were up £798 million, totalling £14.5bn. Operating profit was up £704 million to £2bn. Operating margin was up 4.3 percentage points to 14.2%.
“British Airways is making good progress in this plan to deliver a 15% margin in 2027 with a very strong year in 2024,” said management in its earnings call. “This has been delivered as it improves its customer proposition and operational efficiency.”
Management later added: “2027 is still a good glide path given what we’re going to do this year.” British Airways invested £700 million into its IT, which is expected to be a main driver of efficiency this year. In addition, it will retrofit its A380 aircraft with the new First Suite – its new first class product.
“By the end of 2025, British Airways will be the only airline flying a first class cabin across the Atlantic from London,” the company read in its report.
British Airways is also retrofitting its Club Suite on its 777-200 and 787-8 aircraft.
Spanish flag carrier Iberia recorded €7.5bn in revenues in 2024, up €584 million from 2023. Operating profit was €867 million for the year, down €73 million. The airline’s operating margin was down two percentage points to 11.5%.
Iberia was the launch customer of the new A321XLR aircraft at the end of last year. The first route it serviced was Madrid to Boston. The airline expects it second XLR in the second quarter of this year, which will likely service its planned Washinton DC route. Including this aircraft, Iberia expects an additional seven XLRs over the coming months.
Vueling’s revenues were up €63 million to €3.3bn. Operating profit was up €4 million to €400 million for the year. Operating margin was flat at 12.3%, at a negative 0.1 percentage point.
The company expects to take delivery of 26 new aircraft in 2025, consisting of 14 short haul aircraft, two widebodies, as well as 10 A321XLR aircraft. The company expects to spend €3.7bn on capex in 2025, and “around the same” in 2026. This capex amount is before forward sale and leaseback transactions.
The company took delivery of 19 new aircraft, which included 10 A320neo family aircraft, four 787-10s, three A321XLRs, and two A350s.
In addition, the company took delivery of 15 used aircraft during the year from lessors. This included 14 A320ceo for Vueling to circumvent the ongoing geared turbofan (GTF) engine issues, as well as one A330 for its low-cost airline LEVEL.
The company has a total of 178 aircraft on order, including 82 A320neo and 50 737 aircraft. IAG converted 10 A320neo options to firm deliveries for 2029 as replacement for its short-haul network. Iberia placed an order for two new A350-900 aircraft for Iberia, which are to be delivered next year and the following, respectively. IAG also has options to acquire a further 223 aircraft from Airbus and Boeing.
Capacity is expected to be 3% higher in first quarter and full year 2025, compared to last year. Aer Lingus capacity is expected to be up 5% in the first quarter and 6% full year; British Airways capacity up 1% in the quarter and 2% in the full year; Iberia up 5% in the quarter and 3% full year; LEVEL up 15% in the quarter and 13% in the full year; and Vueling up 3% in the quarter and 4% in the year.
IAG said it expects another good year for 2025 and is targeting “significant” free cash flow for the year.
As of the end of last year, the company net debt totalled €7.5bn and total liquidity was €13.4bn. Net debt to EBITDA was 1.1x.