IAG Half-year Financial Report
International Cons Airlines Group
31 July 2026
IAG H1 results 2026
Strong fundamentals deliver a robust first half performance despite near-term headwinds
Luis Gallego, IAG Chief Executive Officer, said:
"With these results IAG has again demonstrated that its excellent fundamentals are supporting continued value creation for our shareholders, despite the impact of the crisis in the Middle East and wider geopolitical events.
"We are well-positioned to deal with these near-term headwinds with a diverse portfolio of world-class brands in large and attractive markets; industry-leading margins; significant free cash flow and a strong balance sheet; and attractive shareholder returns.
"Our long-term transformation programme has created the resilience that we are now benefitting from - products and services that our customers value, efficient and punctual operations and a low cost base. Each of our businesses is very focused on continuing to execute their transformation plans to deliver further long-term benefits.
"We remain confident in our business model and strategy that has made us one of the best-performing airline groups in the world."
Highlights
• Revenue growth driven by continued strong demand for travel as well as our diverse portfolio of markets and customer propositions
• Robust first half operating profit delivered by a resilient revenue performance despite lower capacity than planned
• Disciplined cost control partly mitigating the impact of a significant fuel price increase
• A strong and efficient balance sheet - net leverage of 0.6x; gross leverage of 1.8x
• Delivering for our shareholders: final 2025 dividend paid in June; continue to execute our excess cash return
• We expect to deliver full year operating margin within our 12% to 15% target range; generate significant free cash flow; and maintain a strong and efficient balance sheet
Financial performance
• A strong first quarter and resilient second quarter have delivered an industry-leading operating margin before exceptional items of 10.9% for the first half of 2026
• First half
• Revenue increase of 1.0% to €16,064 million driven by ongoing strong demand for travel
• Operating profit before exceptional items of €1,757 million (H1 2025 €1,878 million) and an operating margin before exceptional items of 10.9% (H1 2025 11.8%)
• Strong cost control delivering non-fuel unit cost in line with guidance given at full year results, despite lower capacity than planned
• Results driven by the mix of brands and markets
• IAG Loyalty continues to deliver high growth, high margin and excellent free cash flow
• Second quarter
• Revenue increased by 0.2% to €8,883 million as increased yields offset a reduction in capacity, negative impact of the Middle East crisis and the timing of Easter
• Operating profit before exceptional items decreased by 16.3% to €1,406 million mainly due to the impact of higher fuel costs
• Recovering around 60% of higher fuel cost through revenue growth and cost initiatives, in line with guidance
• Lower capacity flown than planned due to impact of the Middle East crisis
• Significant free cash flow of €2,905 million (H1 2025 €2,097 million) benefitting from the timing of fleet deliveries and a base effect benefit of last year's payment to HMRC
Outlook
• We expect demand for travel across our network to remain strong, as it has done through the recent volatility and over a sustained, multi-year period
• We are currently around 57% booked for the second half of the year, with booked revenue in line with last year
• We expect our long-haul markets to remain positive and short-haul markets to be competitive
• We continue to expect to recover around 60% of the higher fuel cost, through both revenue and cost initiatives, in line with previous guidance. Our hedging policy remains unchanged
• Transformation benefits to support operating margin within our 12% to 15% margin range
• Significant free cash flow generation, supporting our commitment to sustainable dividends and completion of our excess cash return
• Confident in delivering long term value creation for our shareholders
Modelling assumptions for FY 2026
• Capacity (ASK) now expected to be flat in 2026 compared to 2025
• We expect non-fuel unit costs to be flat, including the benefit of FX of around one percentage point reflecting significantly lower capacity growth than previously guided
• Total fuel cost scenarios from €8.3 billion based on 30 June 2026 curve, to €8.6 billion based on 27 July 2026 curve
• Capital expenditure of around €3.4 billion. 16 aircraft now expected to be delivered in 2026
Financial summary:
|
Six months to 30 June |
Three months to 30 June |
||||||
|
Reported results (€ million) |
2026 |
2025 |
Higher/ |
2026 |
2025 |
Higher/ |
|
|
Total revenue |
16,064 |
15,906 |
1.0 % |
8,883 |
8,862 |
0.2 % |
|
|
Operating profit |
1,608 |
1,878 |
(14.4)% |
1,257 |
1,680 |
(25.2)% |
|
|
Profit after tax |
1,033 |
1,301 |
(20.6)% |
732 |
1,125 |
(34.9)% |
|
|
Basic earnings per share (€ cents) |
22.9 |
27.3 |
(16.1)% |
||||
|
Cash, cash equivalents and interest-bearing deposits1 |
9,175 |
8,319 |
856 |
||||
|
Borrowings1 |
13,867 |
14,267 |
(400) |
||||
|
Alternative performance measures (€ million) |
2026 |
2025 |
Higher/ |
2026 |
2025 |
Higher/ |
|
|
Total revenue before exceptional items |
16,064 |
15,906 |
1.0 % |
8,883 |
8,862 |
0.2 % |
|
|
Operating profit before exceptional items |
1,757 |
1,878 |
(6.4)% |
1,406 |
1,680 |
(16.3)% |
|
|
Operating margin before exceptional items |
10.9% |
11.8% |
(0.9)pts |
15.8% |
19.0% |
(3.2)pts |
|
|
Profit after tax before exceptional items2 |
1,146 |
1,301 |
(11.9)% |
845 |
1,125 |
(24.9)% |
|
|
Adjusted earnings per share (€ cents) |
23.6 |
26.5 |
(10.9)% |
||||
|
Net debt1 |
4,692 |
5,948 |
(1,256) |
||||
|
Net debt to EBITDA before exceptional items (times)1 |
0.6 |
0.8 |
(0.2) |
||||
|
Total liquidity1,3 |
11,873 |
10,948 |
925 |
||||
|
Operating figures |
2026 |
2025 |
Higher/ |
2026 |
2025 |
Higher/ |
|
|
Available seat kilometres (ASK million) |
169,800 |
170,050 |
(0.1)% |
90,483 |
90,916 |
(0.5)% |
|
|
Passenger revenue per ASK (€ cents) |
8.29 |
8.10 |
2.4 % |
8.68 |
8.55 |
1.6 % |
|
|
Non-fuel costs per ASK (€ cents) |
6.10 |
6.18 |
(1.3)% |
5.81 |
5.91 |
(1.7)% |
For definitions of Alternative performance measures, refer to the Alternative performance measures definition and reconciliation section from page 46.
1 The prior period comparative is 31 December 2025.
2 Exceptional items in the six months to 30 June 2026 (2025: no exceptional items) relate to restructuring costs within employee costs, as explained in the Financial review and Alternative performance measures definition and reconciliation section.
3 Total liquidity includes Cash, cash equivalents and interest-bearing deposits, plus committed and undrawn general and aircraft-specific financing facilities.
Preliminary results investor and analyst presentation, webcast and conference call:
IAG's full interim management statement for the six months ended 30 June 2026 are available at: http://www.rns-pdf.londonstockexchange.com/rns/6982O_1-2026-7-31.pdf.
The results will also be available on the IAG corporate website https://www.iairgroup.com/investors-and-shareholders.
The results have been submitted in full unedited text to the Financial Conduct Authority's National Storage Mechanism and will shortly be available for inspection athttps://data.fca.org.uk/#/nsm/nationalstoragemechanism.
IAG will hold its half one 2026 results presentation for analysts and institutional investors at 8:30am BST on Friday 31 July 2026. There will be a live webcast of the presentation and slides. Please register to view the webcast at: IAG H1'26 Results Call
For further information, please contact: investor.relations@iairgroup.com
LEI: 959800TZHQRUSH1ESL13
Forward-looking statements:
This announcement contains forward-looking statements within the meaning of applicable securities laws. This cautionary statement is made for the purpose of providing protection for such forward-looking statements and is intended to qualify all forward-looking statements made in, or incorporated by reference into, this announcement. These statements can be identified by the fact that they do not relate only to historical or current facts. By their nature, they involve risk and uncertainties because they relate to events and depend on circumstances that will occur in the future. Actual results could differ materially from those expressed or implied by such forward-looking statements.
Forward-looking statements often use words such as "expects", "believes", "may", "will", "could", "should", "would", "might", "continues", "intends", "plans", "targets", "predicts", "estimates", "envisages", "anticipates", "aims", "seeks", "projects", "forecasts", "outlook" or "guidance", or the negative or other variations of such words, or comparable terminology. They include, without limitation, any and all projections or expectations relating to the results of operations, financial condition, cash flows, dividend policy, capital allocation, fleet and capacity plans, route network development, competitive position, industry trends, strategy and regulatory developments of International Consolidated Airlines Group, S.A. and its subsidiary undertakings from time to time (the 'Group'), as well as plans and objectives for future operations, expected future revenues, financing plans, expected expenditure, acquisitions and divestments relating to the Group and discussions of the Group's business plans, and its assumptions, expectations, objectives and resilience with respect to climate and sustainability scenarios. All forward-looking statements in this announcement are based upon information known to the Group on the date of this announcement and speak as of the date of this announcement. Except as required by applicable law, regulation or the rules of any stock exchange on which the Group's securities are admitted to trading, the Group expressly disclaims any obligation or undertaking to release publicly any update, revision, or correction to any forward-looking statement contained herein to reflect any change in the Group's expectations or any change in events, conditions, assumptions, or circumstances on which any such statement is based.
Actual results may differ from those expressed or implied in the forward-looking statements in this announcement as a result of any number of known and unknown risks, uncertainties and other factors, including, but not limited to: changes in general economic, business, or market conditions; fuel price volatility; foreign exchange rate fluctuations; changes in interest rates and financing conditions; the impact of pandemics, public health emergencies, or travel restrictions; terrorist incidents, armed conflicts, or geopolitical instability; changes in applicable laws, regulations, or government policy (including taxation, emissions trading schemes, and environmental regulation); the loss, reduction, or reallocation of airport slots or changes to slot allocation rules and regulations, labour relations, industrial action, or workforce constraints; disruptions to IT systems or cybersecurity incidents; the outcome of litigation or regulatory proceedings; changes in competitive dynamics, consumer demand, or booking patterns; supply chain disruptions; climate-related risks; and the Group's ability to execute its business strategy, achieve anticipated synergies, or manage its fleet and capacity plans - many of which are difficult to predict and are generally beyond the control of the Group, and it is not reasonably possible to enumerate all factors that could cause actual results to differ materially from those anticipated. Accordingly, readers of this announcement are cautioned against relying on forward-looking statements. Further information on the primary risks of the business and the Group's risk management process is set out in the Risk management and principal risk factors section in the Annual report and accounts 2025; this document is available on www.iairgroup.com. All forward-looking statements made on or after the date of this announcement and attributable to IAG are expressly qualified in their entirety by the primary risks set out in that section.
Where forward-looking statements in this announcement are based on data, forecasts, or estimates sourced from third parties, the Group has not independently verified such information and makes no representation or warranty, express or implied, as to its accuracy, completeness, or reliability.
To the fullest extent permitted by applicable law, neither the Group nor any of its directors, officers, employees, or advisers accepts any liability whatsoever for any loss, howsoever arising, from any use of, or reliance on, forward-looking statements contained in this announcement or any information on which such statements are based.
These cautionary statements qualify all forward-looking statements contained in this announcement and all forward-looking statements attributable to the Group or to persons acting on its behalf, whether made in writing or orally, including in investor presentations, earnings calls, or other communications.
Alternative Performance Measures:
This announcement contains, in addition to the financial information prepared in accordance with International Financial Reporting Standards ('IFRS') and derived from the Group's financial statements, alternative performance measures ('APMs') as defined in the Guidelines on alternative performance measures issued by the European Securities and Markets Authority (ESMA) on 5 October 2015. The performance and outcome of the Group's strategy is assessed using a number of APMs. These measures are not defined under IFRS, should be considered in addition to IFRS measurements, may differ to definitions given by regulatory bodies relevant to the Group and may differ to similarly titled measures presented by other companies.
For definitions and explanations of APMs, refer to the APMs section in the most recent published financial report and in the IAG Annual report and accounts 2025. These documents are available on www.iairgroup.com.
IAG Investor Relations
Waterside (HAA2),
PO Box 365,
Harmondsworth,
Middlesex,
UB7 0GB,
United Kingdom
Investor.relations@iairgroup.com
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