British Airways’ owner, International Airlines Group (IAG), has announced a sharp rise in annual profits to almost £4bn despite carrying slightly fewer passengers in 2025.
Pre-tax profits across the group increased by 20% to €4.5bn (£3.9bn), with record operating profits on margins of more than 15% at BA and its sister airline Iberia.
The group’s chief executive, Luis Gallego, said the lucrative transatlantic market, also served by IAG’s Aer Lingus and Level airlines, remained robust, after warnings of softening demand in the autumn.
Passenger numbers fell 0.4% overall but Gallego told an investor call that premium leisure bookings on the North American routes for 2026 were doing “very well”.
BA, the main contributor to IAG’s profits, operates about half of all flights out of Heathrow. Gallego issued a warning over Heathrow’s third runway plans, which have been backed by the government but currently are expected to cost a total of £49bn with associated expansion costs.
He said IAG “supports this commitment to growth but the cost must be far lower to ensure that Heathrow remains globally competitive”.
The chief executive said 2025 had been “another year of exceptional performance”, with improved punctuality and customer satisfaction.
He added: “Looking ahead, demand is strong, with research and market data indicating that travellers in our core markets within Europe and across the Atlantic remain committed to flying the same or more in 2026.”
IAG expects to raise its capacity by about 3% this year.
He said the group had achieved record operating profits as well as growing revenue by 3.5% and would be passing returns to shareholders, with a total dividend for 2025 of €448m.
IAG announced a further €1.5bn share buyback, after a €1bn buyback announced in February. However, its shares tumbled by about 6% on Friday.
IAG, which also owns the Spanish airline Vueling, carried a total of 121.6 million passengers in 2025, down 0.4% from 122 million in 2024.
