International Consolidated Airlines Group SA (LSE:IAG), the owner of British Airways and Iberia, saw its shares surrender early gains as investors zeroed in on weaker demand for US economy seats, despite a first-half performance that comfortably beat expectations.
The airline group reported operating profit before exceptional items of €1.88 billion for the first six months of 2025, up more than 43% on the previous year.
Revenue climbed 8% to €15.9 billion, as travel demand remained strong across key markets including Europe, the North Atlantic, and Latin America. Net profit after tax rose to €1.3 billion from €905 million a year ago, reflecting robust trading and tight cost control.
While IAG highlighted ongoing strength in premium cabins and noted that overall demand remains resilient, the group stopped short of raising its full-year guidance.
It maintained its forecast for both capacity and costs, with non-fuel unit costs now expected to rise by around 3% and fuel costs reconfirmed at €7.1 billion.
Chief executive Luis Gallego said the results demonstrate the group’s resilience and the progress of its transformation strategy. Broker commentary will be added here.
"We expect consensus upgrades, though recent Sterling weakness versus the Euro and persistently high jet fuel prices may soften the scale. We continue to see the stock as significantly undervalued," said Peel Hunt.
The broker reiterated its 'buy' advice and 420p price target. Panmure Liberum thinks the stock is worth 540p.
Mid-morning, the shares were down 1% at 376.5p.