British Airways owner IAG beats profit estimates as premium demand lifts earnings

[LONDON] British Airways owner IAG reported a better-than-expected annual profit on Friday (Feb 27), as it benefited from lower fuel costs and resilience on its core transatlantic routes, particularly for its premium services.

European airlines have been riding strong premium demand across the North Atlantic, a key profit engine, even as US-sold economy fares softened, mirroring an industry-wide trend, in which affluent travellers continue to spend.

Meanwhile, price-sensitive flyers pull back amid tariff-related uncertainty and shifting US demand signals. European peers have been capitalising on strong premium-travel demand, with Lufthansa rolling out new premium seats and Air France-KLM boosting premium products through upgraded cabins, lounges, and onboard services.

On Thursday, IAG said it would return 1.5 billion euros (S$2.24 billion) in excess cash to shareholders over the next 12 months, starting with a 500 million euro share buyback to be completed by the end of May 2026.

IAG reported an operating profit before exceptional items of 5.02 million euros, compared with 4.97 billion euros projected by analysts polled by LSEG. That’s up 3.5 per cent from last year’s adjusted operating profit of 4.44 billion euros. REUTERS