IAG, the owner of British Airways and Spanish carrier Iberia, said Friday that its net profit rose slightly last year, with demand remaining “strong” at the start of 2025.
Profit after tax increased three percent to 2.7 billion euros ($3.4 billion) compared with a year earlier, IAG said in a statement.
Revenue climbed nine percent to 32.1 billion euros, with the commercial aviation sector having recovered from the turbulent Covid years when airlines were forced to ground planes, triggering a sector-wide jobs cull.
“These results highlight the quality of our businesses and effectiveness of our strategy,” IAG chief executive Luis Gallego said in the earnings statement.
“We are focused on continuing to make our brands the first choice for customers, by growing our network and enhancing the customer proposition.”
The group said it would buy back shares at a cost of up to £1 billion euros, a move that tends to boost a company’s valuation.
Results for the final quarter of last year also beat market expectations, and IAG shares jumped 3.9 percent at the start of trading in London.
“Despite the run-up in share price over the last 12 months, its valuation is still near all-time lows, excluding the Covid-19 era,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown.
“There’s still plenty of potential for upside with IAG, and the gates haven’t closed for investors looking to get on board.”
IAG said it had seen “ongoing strong demand for travel”.
“Leisure travel remains robust as a major priority for households and in recent years we have seen this boosted by a shift as customers value experiences over material purchases.”
The group said that while corporate travel increased last year, IAG forecast that “it will not fully recover to pre-Covid 19 levels, particularly for short duration and short-haul trips”.
The last year saw IAG, which owns also Spanish carrier Vueling and Irish airline Aer Lingus, drop a bid to buy Spanish brand Air Europa owing to regulatory constraints.