IAG Shares Rally as Strong H1 Results Fuel Investor Confidence

International Consolidated Airlines Group S.A. (LON:IAG) shares gained ground in early trading Friday after the release of its first-half 2025 results.

The airline group, comprising carriers such as British Airways, Iberia, Vueling, Aer Lingus, and LEVEL, reported significant gains in profitability, driven by sustained demand and successful operational efficiencies.

IAG's share price climbed more than 2% to around 390p. The stock has now rebounded strongly over the past week, recovering from a dip earlier in the month and trading near its 52-week high of 387.10p.

Financial Highlights

The airline giant reported an 8.0% increase in revenue, reaching €15.91 billion for the first half of 2025. Operating profit before exceptional items jumped by an impressive 43.5% to €1.88 billion, boosted by revenue growth, favorable fuel prices, and advantageous foreign exchange rates.

The second quarter alone saw operating profit before exceptional items rise by 35.4% to €1.68 billion.

“Our strong performance in the first half of 2025 reflects the resilience of demand for travel and the success of our ongoing transformation, underpinned by the fundamental strengths of our Group. We continue to benefit from the trend of a structural shift in consumer spending towards travel.”
– Luis Gallego, IAG Chief Executive Officer

Operational Efficiency and Shareholder Returns

IAG reported a 2.9 percentage point increase in operating margin, which now stands at 11.8% for the first half. 

IAG is rewarding its shareholders with €1.5 billion in cash returns for 2025 through dividends and share buybacks. Adjusted earnings per share have increased by a substantial 69.9%.

Future Outlook 

Looking ahead, IAG remains confident in delivering good earnings growth, margin progression, and strong returns to shareholders for the full year.

As of July 29, the company had already booked 57% of its revenue for the second half, in line with last year. Demand remains robust across core markets, particularly in the premium cabin segment, which is helping to offset some softness in US point-of-sale economy leisure travel.

Overall, the company stated it is “confident in the longer-term outlook.”

Analyst Perspectives

Analysts are generally positive on IAG's prospects. Bernstein recently upgraded IAG to “Outperform” with a price target of 450p, citing the company's strong positioning to capitalize on industry profitability trends.  The consensus analyst price target is 408.4p, approximately 5.8% above the current trading price.