International Airlines Group (IAG) has reported a strong opening quarter for 2025, maintaining its positive outlook while bolstering its future fleet with a significant order of new aircraft from both Boeing and Airbus. The Group confirmed the delivery of five new aircraft in the first three months of the year and the exercising of options for six Airbus A350-900s for Iberia, six Airbus A350-1000s for British Airways, and six Boeing 777-9s also for British Airways. These aircraft, set for delivery between 2027 and 2030, are part of IAG's strategy to modernise its fleet, improve operational efficiency, reduce emissions and enhance the customer experience.
Further expanding its long-haul capabilities, IAG has placed additional orders for 21 Airbus A330-900neo aircraft and 32 Boeing 787-10s, scheduled to arrive between 2028 and 2033. These aircraft will primarily replace older planes, with about a third supporting growth in IAG's key markets.
The Group delivered revenue growth of 9.6%, reflecting the underlying strength of the business. Operating profit before exceptional items rose by €130 million to €198 million, with strong revenue performance and a lower fuel price helping to offset anticipated cost increases. As a result, the operating margin improved by 1.7 points to 2.8%. Passenger unit revenue increased by 3.2%, driven by strong North Atlantic demand and favourable foreign exchange movements totalling €143 million. Despite the adverse timing of Easter and the temporary closure of Heathrow Airport on 21 March, the Group recorded robust growth in cargo revenue (up 12.4%) and a substantial 41.2% rise in other revenues, largely due to Iberia's MRO operations and British Airways Holidays.
Non-fuel unit costs rose by 8.8%, in line with expectations, reflecting foreign exchange impacts, higher operational costs in non-airline businesses, and strategic investments to strengthen service quality and operational resilience. British Airways, for example, recorded its best quarterly punctuality since IAG was formed.
Capital discipline remained a priority. IAG strengthened its balance sheet, improving net leverage to 0.9x and gross leverage to 2.2x. Over €1 billion in debt was repaid, including a €668 million VAT-related payment to HMRC, of which €260 million has already been recovered. Ratings agencies responded positively, upgrading IAG and British Airways to investment-grade ratings.
Altogether, IAG's combination of strong financial performance and strategic fleet investment reflects a confident, growth-oriented start to the year.
