IAG will increase the dividend after increasing its profit by more than 15% until September

IAG, the parent group of Iberia, Vueling and British Airways, announced this Friday an increase in the dividend after increasing its profit after taxes by more than 15% to 2,703 million of euros between January and September. The aeronautical holding company has almost completely completed the share buyback worth 1 billion euros announced in February of this year and has assured that it will announce new distributions to its shareholders when it presents the results for the year as a whole in February. Despite the positive figures, the firm lost more than 8% in the stock market and led the falls in the Ibex 35.

The company assures that it is on track to achieve “another year of strong profit and margin growth in 2025.” As reported this Friday to the National Securities Market Commission (CNMV), operating profit rose 18% to 3,931 million, driven by some higher unit passenger revenues and lower unit fuel costs. The increase in operating profit included favorable exchange rate effects of 149 million.

The holding’s total income rose to 25,234 million, 4.9% more. Net debt stood at 6,009 million as of September 30, with total liquidity of 11,442 million, almost 2,000 million lower than the previous year.

Total operating expenses in the nine-month period increased almost 3% to 21,303 million, due to the higher volume of flights and the increase in unit costs excluding fuel, which were 4.3% higher.

More personnel costs… less fuel

He increase in personnel expenses of 376 million euros, 8.3% Annual figure reflects salary increases and bonus provisions and the increase in the number of employees. Fuel and emission rights expenses decreased by 471 million, 8% compared to 2024, as a result of lower prices and partially offset by the increase in flight volume.

In a conference with analysts, the group’s CEO, Luis Gallego, highlighted that passenger revenue remains above last year and there are an improving trend on North Atlantic routes. However, he indicated that the market in general is a little weaker, although “the situation is positive” for IAG, a group to which Aer Lingus and Level also belong.

Between January and September, the group’s airlines increased their capacity by 2.6% and obtained a load factor of 85.8%, one percentage point less. Passenger revenue increased by 0.8%. In total, they transported 92.3 million passengers, 0.6% less than the previous year, although the number of flights practically remained the same (565,369).

Improvement in figures expected for 2025 and increase in the dividend

Looking ahead, IAG forecasts a full year capacity increase of around 2.5% and assumes that unit costs excluding fuel will increase by around 3% over the course of this year. It is expected that investments for the year will reach approximately 3.7 billion and that the total cost of fuel will be approximately 7.1 billion.

IAG also announces an increase in the interim dividend per share to 0.048 euros. In the 2024 financial year it paid its shareholders €427 million and aims to increase the dividend approximately in line with inflation.

During the third quarter, the company recorded a profit after taxes of 1,402 million euros, which represents a decrease of 2.3% compared to the same period in 2024.

Revenues stood at €9,328 million, stable compared to the previous year due to stable passenger revenues, a reduction in cargo revenues and an increase in other revenues. Operating profit for this third quarter rose 2% to 2,053 million euros.

In the presentation of results, the company assures that they are on track to achieve another year of revenue and profit growth, margin progress and strong returns for their shareholders. “We are carrying out our strategy and continue to build a business that will offer sustainable value creation throughout the cycle,” says the aeronautical holding company.

Alliance with Elon Musk

IAG and starlinkthe company owned by Space X, Elon Musk’s company, have sealed a contract by which the airline group will introduce high speed wifi starting in 2026 across its entire fleet. It will do so on all its routes (short, medium and long haul), but not on all short regional flights. Holding will be incorporated into all aircraft that are not going to withdraw from operations in the short term. At the end of last year there were a total of 601.