Aer Lingus and British Airways owner IAG has today reported better than expected first quarter profit and maintained its outlook for 2025, with resilient demand helping to almost triple earnings year on year.
Aer Lingus today reported an operating loss of €55m for the first quarter.
European airlines in general have produced some strong quarterly results despite global economic uncertainty stoked by US President Donald Trump’s trade tariff policies.
Concern over an economic downturn cast a shadow over prospects for transatlantic routes that have helped to drive IAG’s strong results in recent years, but the company’s first-quarter statement said that part of the business remains a “major area of strength”.
The company said it is seeing some softness in bookings from the US in economy, but that is being offset by strength in premium bookings.
Chief executive Luis Gallego told reporters that bookings to South America in particular were very strong, with Europe and Africa also robust.
European peers Air France-KLM and Lufthansa last week cautioned about potential economic headwinds but did not declare any notable impact on business so far.
American airlines such as Delta pulled their financial forecasts in April on the back of demand uncertainty resulting from Trump’s tariffs. Virgin Atlantic also said it had noticed a slowdown in travel from the US to Britain.
IAG reported operating earnings of €198m for the three months to March 31, compared to €68m a year earlier and a consensus of €158m from analyst estimates compiled by the company.
Its shares bucked the wider sector trend by performing well last year as its transatlantic advantage helped to bolster investor confidence.
They reached a five-year high in February before drifting slightly lower, but they have been climbing again since early April.
CEO Gallego told reporters it was too early to tell if demand on transatlantic routes would soften in later quarters.
The first quarter is often the weakest for airlines, which rely heavily on the busy summer travel season.
“With 80% of flights for the second quarter already booked, the outlook is brighter than many expected,” Aarin Chiekrie, an equity analyst at Hargreaves Lansdown, said in a note.
“After such a strong start to the year and demand holding up well, there could be room for markets to turn more positive on IAG and the industry as a whole,” he added.
Meanwhile, IAG said today it would order 53 new Airbus and Boeing long-haul aircraft, in addition to an order for 18 planes it placed in March.
The new order consists of 32 Boeing 787-10 aircraft for British Airways and 21 Airbus A330-900neo aircraft, which may be assigned to other IAG airlines including Aer Lingus, Iberia, and LEVEL, the company said.
The new orders follow those already placed in March, and first disclosed today, for six Airbus A350-900s for Iberia, as well as six Airbus A350-1000s and six Boeing 777-9s for British Airways, IAG said.
List prices for the A330-900neo and 787-10 are about $374m and $397m, respectively, based on January 2025 US dollar terms, but airlines typically negotiate big discounts to official prices.
IAG did not give the details of its discount.
IAG also said that British Airways had secured options to buy up to 10 additional Boeing 787s, and that the group had purchase rights for up to 13 more A330-900neos under its agreement with Airbus.
The US said yesterday that Britain would buy $10 billion of Boeing jets, and industry sources said IAG would also buy about 30 jets from Airbus as part of a wide-body order split between the European planemaker and its US rival.
The order adds to an already large backlog of Boeing planes slated for UK purchasers – 149 in total, according to Boeing’s published backlog.
Planemakers have been wrestling with supply chain snags and other challenges that have delayed deliveries.
Boeing is trying to ramp up production of its strongest selling 737 MAX jet to a rate of 38 per month this year, after a difficult 2024 when output slumped due to a broad quality crisis that led to the replacement of its CEO.
IAG, one of the industry’s most influential aircraft buyers, is closely watched by rivals, especially as global trade tensions spotlight major aircraft deals.
Bloomberg News reported yesterday that IAG was poised to order 30 Boeing 787s and could secure options for further purchases.
