IAG’s financial performance has resulted in profit in the first quarter of 2025. In the three months up to 31st March 2025, the company made a 176million euros profit which is far more than the 4million euros loss made in the first quarter of 2024. This is the first time that IAG’s financial performance has resulted in a profit for this quarter since the end of pandemic restrictions in 2022.
The Covid Pandemic
As we know the pandemic itself took a heavy toll on the aviation industry. Many airlines suffered losses as a result of government restrictions on international travel to reduce the spread of the disease. When the pandemic restrictions were lifted problems continued because there were staff shortages resulting from mass layoffs during the pandemic years when demand was less. Consequently, there was mass congestion at airports around the world leading to flight delays and cancellations. As with many airlines IAG’s financial performance took a longer time to recover because of this.
In addition, events on the world stage such as Ukraine war as well as conflicts in the Middle East and subsequent sanctions have increased fuel prices further increasing costs. However, British Airways, one of IAG’s subsidiaries, was credited for helping in airports in the aftermath of the pandemic by taking a proactive stance by voluntarily reducing flights when airports got congested before mandatory restrictions came in.
IAG’s Revenue
Considering the setbacks IAG’s financial performance has had, alongside many airlines, the fact that it is back in the black is a big achievement for the airline. In terms of IAG’s revenue, the company made 7.044 billion euros in the three months leading up to 31st March 2025. This was an improvement of 9.6% on the same period in the previous year. This shows that IAG’s airlines are becoming more popular with customers and are therefore gaining more receipts. Cost control has also improved in the company indicated by the profit having improved proportionately more than revenue.
In terms of the company’s response to IAG’s financial performance, Luis Galego the company’s Chief Executive Officer has said that this as a strong start to 2025. Galego says that the company continues to deliver on its industry leading financial targets. He also adds that the company remains focused on strengthening their market leading brands (in this case its airlines such as British Airways, Iberia etc.) across North America, Latin America and within Europe.
Outlook
In terms of the company’s outlook, even though there is political and macro-economic uncertainty (wider economic uncertainty), this remains unchanged. IAG is seeing good demand for air travel among its brands highlighting the strength of its portfolio (the airlines within the company). In addition, 80% of its seats have been booked for travel in the next quarter, which bodes well for the second quarter of IAG’s financial year.
To conclude, IAG’s financial performance for this quarter has been promising. The fact that it is in the black for the first time for this quarter since the pandemic is a good sign. We have to wait to see how this progresses.
So overall a strong start to 2025. What are you views on IAG’s financial performance?
