British Airways owner enjoys dramatic profit surge amid soaring demand

IAG Records 44% Net Profit Upswing in First Six Months of 2025

British Airways parent IAG announced a robust 44 % jump in net earnings for the January‑June period, driven by “strong demand” across its airline network.

Key Financial Highlights

• Net profit after tax: 1.3 billion euros ($1.5 billion), up from 905 million euros in the same period last year.
• Group revenue: 15.9 billion euros, an eight‑percent rise, “reflecting strong demand for our network and brands.”
• Total passenger revenue: 13.8 billion euros, growing 5.6 %.
• IAG’s fleet expansion: May order for new Boeing and Airbus aircraft worth multiple billions.

CEO’s Perspective

CEO Luis Gallego noted that the IAG performance “reflects the resilience of demand for travel” and benefits from a structural shift in consumer spending toward leisure.

Outlook and Market Sentiment

• IAG expressed confidence in delivering “good earnings growth” for the full year, while mindful of geopolitical and macro‑economic uncertainty.
• Shares initially surged after the earnings announcement, then dipped 0.9 % as investors weighed US tariff developments.
• Interactive Investor’s Richard Hunter commented that “IAG shares have faced turbulence due to geopolitical uncertainty and fears of US travel impacts from tariffs.”
• Despite pressure on economy flights to the United States, IAG’s premium cabin strength mitigated any weakness.

Operational and Strategic Context

IAG’s earnings were slightly impacted by a £40‑million hit to BA after an electrical substation fire shut Heathrow down in March. The airline cancelled flights between Heathrow and some Middle East routes in June following US strikes on Iran.

Heathrow, Europe’s busiest hub by passenger numbers, unveiled a £49‑billion expansion plan, including the long‑awaited third runway approved by the UK government after years of legal battles.

Industry Recovery

The commercial aviation sector has rebounded from the turbulent Covid years when airlines grounded planes and triggered a sector‑wide job cut. Consumers now prioritize leisure travel post‑lockdown, even as airfare inflation has surged in recent years.