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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.

​​​​IAG Q1 2025 earnings preview: will travel demand continue to propel the airline group forward?

British Airways parent International Consolidated Airlines Group is set to report Q1 2025 results on 9 May, with analysts watching for continued revenue growth and operational improvements.​

British Airways Source: Bloomberg

Written by

Axel Rudolph FSTA

Axel Rudolph FSTA

Senior Technical Analyst

Article publication date:

IAG's recent performance and Q1 2025 expectations

​International Consolidated Airlines Group (IAG)​, the parent company of British Airways, Iberia, Aer Lingus, and Vueling, is set to announce its first quarter (Q1) 2025 financial results on Friday, May 9, 2025.

​Given the positive trends in passenger demand and capacity expansion, a continued revenue growth is anticipated. Q1 2025 revenue is expected to increase by 6% to €6.82 billion, compared to a revenue of €6.43 billion in Q1 2024, up from €5.89 billion in Q1 2023.

Earnings Per Share (EPS): Analysts anticipate flat EPS versus a marginal loss of €0.02 per share in Q1 2024, reflecting a slight improvement from previous years.

​The Q1 traditionally represents a seasonally weaker period for airlines operating in the northern hemisphere, but expectations for IAG have improved substantially compared to pre-pandemic years. The gradual normalisation of the airline industry has helped bolster investor confidence in the sector.

​This upcoming earnings report will be crucial in setting the tone for IAG's full-year performance, particularly as the group approaches the lucrative summer travel season which typically delivers the bulk of annual profits for European carriers.

​Key performance drivers for IAG

​Strong travel demand: IAG has benefited from increased travel demand, particularly over holiday periods like Easter, contributing to higher revenues and operating profits in previous quarters.

Capacity expansion: The group has been investing in capacity growth, with plans to increase Available Seat Kilometres (ASKs) by around 7% for the full year.

​Operational efficiency: Ongoing transformation initiatives have led to improved operational performance and customer experience, positioning the company well for the upcoming summer season.

​The company's premium cabins have shown particularly strong booking trends, suggesting that business travel – once considered at risk of permanent decline after the pandemic – has substantially recovered. This segment typically delivers higher profit margins than economy class travel.

​Challenges and headwinds facing the airline group

Cost pressures: Non-fuel unit costs have seen slight increases due to investments in the business and wage settlements.

Fuel price volatility: Fluctuations in fuel prices remain a concern, although the company has benefited from more efficient aircraft deliveries and hedging strategies.

​The aviation industry continues to face broader structural challenges, including ongoing supply chain issues affecting aircraft deliveries. Airbus and Boeing have both struggled to meet delivery schedules, potentially impacting IAG's fleet renewal plans.

​These delays are attributed to persistent supply chain disruptions and production constraints. In its February 2025 earnings report, IAG acknowledged potential delivery delays this year, noting that such supply constraints could ultimately benefit the industry by maintaining higher yields and earnings due to limited capacity.

​British Airways, which accounts for over half of IAG's capacity, has had to adjust its long-haul schedule due to delays in receiving Rolls-Royce Trent 1000 engines and parts for its Boeing 787 fleet. The airline does not anticipate a short-term resolution to these issues.

​According to the International Air Transport Association (IATA), aircraft deliveries have fallen sharply from the peak of 1,813 aircraft in 2018. In 2024 there was a 30% shortfall on what was predicted going into the year. In 2025, deliveries are forecast to rise to 1,802, well below earlier expectations of 2,293 deliveries, with further downward revisions widely anticipated. The backlog for new aircraft orders has reached a record 17,000 planes, equivalent to 14 years of production at current delivery rates.

​Labour disputes, particularly at British Airways, remain an area of concern for investors. While recent negotiations have progressed, any operational disruption during the peak summer season could significantly impact financial performance.

​IAG's strategic initiatives and outlook

​IAG's strategic focus on core markets and operational improvements has positioned it for continued recovery and growth. The upcoming Q1 2025 results will provide further insights into the company's performance trajectory and its readiness for the peak summer travel season.

​The group has been implementing a comprehensive digital transformation programme designed to enhance the customer experience while driving operational efficiency. Updates on the progress of this initiative will be closely watched by analysts.

​Fleet modernisation remains a key priority, with IAG continuing to phase out older, less fuel-efficient aircraft in favour of newer models. This strategy aims to reduce both operating costs and environmental impact, supporting the group's sustainability targets.

​Recent investments in premium cabin products, particularly at British Airways and Iberia, indicate IAG's commitment to capturing high-value traffic. The success of these investments in driving yield improvements will be a focus area in the upcoming results.

​Market position and competitive landscape

​IAG operates in an increasingly competitive landscape, with both legacy carriers and low-cost competitors vying for market share. The group's multi-brand strategy allows it to compete effectively across different market segments.

​European consolidation continues to reshape the competitive landscape, with recent merger activity potentially altering the balance of power. IAG itself has been active in this space, having completed its acquisition of Air Europa after a protracted regulatory process.

​The airline industry faces ongoing structural challenges, including increasing environmental scrutiny and potential changes to regulatory frameworks. IAG's approach to these challenges will be crucial for long-term shareholder value.

​North Atlantic routes, a key profit driver for IAG through British Airways and Aer Lingus, have shown particularly strong demand. Performance in this market segment will be a critical indicator of the group's financial health in the upcoming results.

​Analyst expectations and market sentiment

​Market sentiment towards IAG has improved steadily over the past year, with the share price recovering substantially from pandemic lows. However, the stock continues to trade below pre-pandemic levels, suggesting potential upside if operational performance meets or exceeds expectations.

​IAG monthly candlestick chart

​IAG monthly candlestick chart Source: TradingView

​From a technical perspective, provided that the April low at 210 pence underpins, a rise back towards the February peak at 368.4p may be on the cards.

​Analyst coverage of IAG shows a mixed but generally positive outlook, with the consensus rating leaning towards 'buy'. Target prices vary significantly, reflecting differing views on the pace and extent of the aviation industry's recovery.

​According to LSEG Data & analytics, 6 analysts have a ‘strong buy’ recommendation for IAG, 7 a ‘buy’, 4 a ‘hold’ and 1 a ‘sell’ (as of 06/05/2025).

IAG LSEG Data & Analytics chart

IAG LSEG Data & Analytics chart Source: LSEG Data & Analytics

​IAG has a TipRanks Smart Score of ‘7 Neutral’ but is rated as a ‘buy’ with 11 ’buy’, 3 ‘hold’ and 1 ‘sell’ recommendation (as of 06/05/2025). 

IAG TipRanks Smart Score chart

IAG TipRanks Smart Score chart Source: TipRanks

​The IAG share price, down around 8% year-to-date, is in the process of testing a potential minor resistance area around the 276.5p early January low.  Above it lies the psychological 300p mark, a rise above which would comfort bulls and leave the way open for the February peak at 368.4p to be reached.

​IAG daily candlestick chart

IAG daily candlestick chart Source: TradingView

​A fall through the 210p February low would put the May 2024 high and October 2024 low around 187p on the map.

​Key metrics to watch out for

​Key metrics that fundamental analysts will focus on include load factors (the percentage of available seats filled with passengers), yield performance (average fare per passenger), and unit cost trends. These indicators provide insight into both revenue generation capability and cost control effectiveness.

​Forward guidance will be particularly important, with investors looking for IAG's assessment of summer booking trends and any signs of potential softening in consumer demand amid broader economic concerns.

​How to trade IAG shares ahead of earnings

​For traders looking to position themselves ahead of IAG's earnings announcement, several approaches are available through IG's trading and investment platforms.

  1. ​Research IAG's financial performance, competitive position, and industry trends to inform your trading decision.
  2. ​Consider potential earnings outcomes and decide whether you want to trade or invest in IAG shares.
  3. ​Open an account with IG by visiting our website and completing the application process.
  4. ​Search for 'International Consolidated Airlines Group' or its ticker 'IAG' on our trading platform or app.
  5. ​Place your trade, ensuring you have appropriate risk management measures in place given the potential volatility around earnings announcements.

​For short-term traders, spread betting and CFD trading offer ways to profit from both rising and falling prices, with the ability to apply leverage. However, it's worth noting that airline stocks typically show heightened volatility around earnings releases, making risk management particularly important.

​Longer-term investors might consider adding IAG to their portfolio through our share dealing service if they have a positive outlook on the aviation industry's continued recovery and IAG's strategic positioning within it.

​As IAG approaches this important earnings announcement, the results will not only provide insight into the company's own performance but also serve as an indicator for the broader European aviation sector and consumer travel demand trends for the remainder of 2025.