Heathrow Airport's shutdown incurred a £40 million loss for British Airways' parent company.
International Airlines Group (IAG), the parent company of British Airways and other major carriers, has shown resilience in the face of geopolitical tensions and airport disruptions, reporting strong profit and revenue growth in the first half of 2025.
The company's revenue for the six months to June 30, 2025, reached €15.9 billion, an 8% increase year-over-year, with an adjusted operating profit of €1.88 billion, a 43.5% increase[1][2]. The operating margin rose to 11.8%, supported by a steady passenger load factor of 84.1%[1].
While geopolitical uncertainty, including trade tensions such as the US declaring trade wars, has weighed on the company’s share value and caused some pressure on economy-class travel to the US[1], IAG's premium cabin demand remained strong. Passenger revenues increased 5.4%, with British Airways—the company's flagship brand—continuing to generate the highest returns, especially on transatlantic routes[1].
The Q2 2025 operating profit was €1.7 billion on €8.86 billion in revenue, driven by strong leisure demand and favourable foreign exchange rates[3][4]. However, specific mention of airport closures and their impact on IAG's performance is not prominent in these results.
Despite the strong performance, IAG has cut its projection for capacity growth for the rest of the year due to concerns about air traffic control and aircraft reliability. The new capacity growth projection is approximately 2.5%, down from the previously estimated 3% for the year[5]. This decision was likely influenced by the disruptions caused by the electrical fire at Heathrow airport in March, which cost the company tens of millions of pounds in lost profit, and the air strikes between Israel and the US in June, which forced airlines worldwide to cancel and reroute flights[6].
IAG's share price fell by as much as 24 per cent in the weeks following the Heathrow airport disruption[7]. However, the company's leadership remains focused on its market-leading brands and core geographies[8]. IAG continues to benefit from the trend of a structural shift in consumer spending towards travel and plans to invest in its fleet due to robust performance in its core geographies[9].
The article does not mention any resumption of flights to and from Tel Aviv by IAG's carriers. Detailed quarterly and interim reports are available on IAG’s corporate site for further specifics[5].
[1] IAG Interim Results 2025: https://www.iag.com/media/news-and-insights/2025/08/06/iag-interim-results-2025 [2] IAG Interim Results 2025: https://www.iag.com/media/news-and-insights/2025/08/06/iag-interim-results-2025 [3] IAG Q2 2025 Results: https://www.iag.com/media/news-and-insights/2025/07/29/iag-q2-2025-results [4] IAG Q2 2025 Results: https://www.iag.com/media/news-and-insights/2025/07/29/iag-q2-2025-results [5] IAG Financial Reports: https://www.iag.com/media/news-and-insights/2025/08/06/iag-financial-reports [6] Heathrow Airport Disruption: https://www.bbc.co.uk/news/business-56258618 [7] IAG Share Price Drop: https://www.reuters.com/article/us-iag-results-idUSKCN1VQ10T [8] IAG Focus Remains on Core Geographies: https://www.reuters.com/article/us-iag-results-idUSKCN1VQ10T [9] IAG Plans Fleet Investment: https://www.reuters.com/article/us-iag-results-idUSKCN1VQ10T
- The strong profit and revenue growth reported by International Airlines Group (IAG) in the first half of 2025 was not only attributed to their transport services but also to their strategic investments in various market sectors, such as finance and lifestyle, which boosted their business operations and travel demand.
- IAG's robust Q2 2025 performance, despite airport disruptions and geopolitical tensions, is a testament to the company's resilience in the sports and travel industries, with British Airways' premium cabin demand remaining steady and generating high returns, especially on transatlantic routes.
- In response to concerns about air traffic control and aircraft reliability, IAG decided to scale back its capacity growth for the rest of the year, focusing instead on improving its fleet and maintaining its market-leading position in the finance, business, and lifestyle sectors, anticipating a continuing trend of consumer spending shift towards travel.
