Shares in International Consolidated Airlines Group (IAG) closed more than 10% lower after the company reported a mostly “flat” third-quarter performance.
Total third-quarter revenue was €9.32bn, almost unchanged compared to the same period last year.
Total third-quarter passenger revenue was €8.26bn, a scratch below the same period last year.
Cargo revenue fell almost 7% due to lower pricing than in the prior year, while other revenue grew 3.6% thanks to continued growth at IAG Loyalty.
Passenger unit revenue fell 2.4%, although this includes an estimated two percentage points of negative foreign exchange impact.
Unit revenue for the North Atlantic region fell 7.1%, around half of which was attributed to foreign exchange impact.
Nonetheless, IAG said it delivered “effective” cost control during the quarter, with non-fuel unit cost increasing 0.2%, in line with expectations.
Third-quarter operating profit before exceptional items increased by 2% to €2bn, at a margin of 22% (an improvement by 0.4 percentage points). However, profit after tax was $1.4bn, a drop of 2.3%.
Overall, management said it was a “good” third quarter that was overshadowed by a record quarter during the same period last year.
“As expected, the North Atlantic market saw some softness in US point-of-sale economy leisure, and unit prices across our airlines were lower in the European market due to a combination of high growth by British Airways and more competitive markets elsewhere,” it said.
Third-quarter adjusted earnings per share (EPS) was €0.29, almost 4% higher than the same period last year.
During the first nine months of 2025, adjusted EPS grew 27% and operating profit grew 18% compared to the same period last year.
Operating margin for the last twelve months up to the end of the third quarter grew 15.2%.
Going forward, IAG said its strong balance sheet and its net leverage of 0.8x will provide greater optionality for capital allocation.
The company has almost completed a €1bn share buyback that was announced in February 2025, and it intends to announce further returns to shareholders in February next year.
IAG’s full-year outlook remains unchanged across all topline metrics. “We are on track to deliver another year of revenue and earnings growth, margin progress and strong shareholder returns,” the company said.
“Demand for travel remains strong and we are well positioned, whilst being mindful of the macroeconomic and geopolitical backdrop.”
The full-year outlook assumes a full-year capacity increase of 2.5% and a full-year non-fuel unit cost increase of around 3%.
Capital expenditure for the year is expected to be around €3.7bn, and total fuel cost is expected to be €7.1bn (based on jet fuel forward curve and foreign exchange rates at the end of the third quarter).
IAG said its revenue is "positively booked” for the fourth quarter. When pressed to elaborate on this during an investor call, Group CFO Nicholas Cadbury said he would “love to give more detail but that’s about as much as we can give”.
“We've had a good October and November,” he said. “We've seen point-of-sale in North America being good on both sides from the US and the UK, and US leisure point-of-sale in the last few weeks has been a little better as well, which is good to see.”
Luis Martin, IAG CEO and executive director, added: “We're seeing stable demand is the best way I would describe it, and that's relevant in both Europe and our US markets.”
Regarding UK bookings the CEO said that the fourth quarter is looking a “little bit more positive” than the previous quarter, but he could not “commit to specifics”.