International Consolidated Airlines Group SA (LSE:IAG) has kept its full-year guidance steady after a robust first quarter, shrugging off mounting global economic concerns and heightened geopolitical tensions that threaten to sap demand for international air travel.
The airline group, which owns British Airways, Iberia and Aer Lingus, said it remained confident in the resilience of customer demand, particularly in its premium cabins and core transatlantic market, even as signs of softness emerge in the wider economy.
“Whilst being mindful of the geopolitical and macroeconomic uncertainty, our outlook for the full year is unchanged,” IAG said in a statement on Friday.
Luis Gallego, chief executive, pointed to the group’s diversified network as a strength in the current environment. “We continue to see resilient demand for air travel across all our markets, particularly in the premium cabins, and despite the macroeconomic uncertainty,” he said.
Revenue rose 9.6% year on year to €7 billion in the three months to the end of March, with operating profit before exceptional items climbing to €198 billion, up from €68 million a year earlier.
That growth was helped by a fall in fuel prices and a jump in cargo and ancillary revenues, which offset higher staff and supplier costs.
North Atlantic flying, a key profit driver for the group, delivered the strongest revenue-per-seat growth, up 13% despite only marginal capacity increases. IAG noted this helped balance “some recent softness in US point-of-sale economy leisure” bookings.
The group’s first quarter figures also showed a notable rebound in its Latin American operations, with a 7.1% capacity increase met by continued high passenger load factors. Iberia and low-cost carrier LEVEL both contributed to that growth.
British Airways, IAG’s largest airline, recorded its best punctuality since the group’s formation, despite a hit from the one-day closure of Heathrow in March, which dented earnings by an estimated €50 million.
Iberia posted a solid €137 million operating profit, while Vueling slipped deeper into the red, reflecting its sensitivity to holiday travel timing and the late Easter.
Net debt fell sharply to €6.1 billion, from €7.5 billion at the end of December, aided by strong cash generation and lower gross borrowings. The group also completed €530mn in share buybacks so far this year, with a further €660mn planned.
IAG is forecasting capital expenditure of €3.7bn for 2025 and expects a fuel bill of €7.5bn for the year, based on forward pricing.
Despite turbulence in the global economic outlook, including tensions between major trading blocs and concerns over supply chain resilience, IAG signalled it remains well-positioned.
It said about 80% of second-quarter bookings were already secured, with revenue tracking ahead of the same period last year.