IAG reinforces interest in TAP after record profits
The group that owns British Airways made €5 billion in profits in 2025 and confirmed that it is in the process of privatising TAP, but will only proceed if the purchase creates value for shareholders.
The IAG group, owner of British Airways, Iberia and Aer Lingus, posted a record operating profit of €5.024 billion in 2025, exceeding analysts’ forecasts by 1.1%, and announced a return of €1.5 billion to shareholders, while reinforcing its interest in TAP.
Operating profit before exceptional items grew 13.1% compared to 2024, according to a company statement published on Friday, with an operating margin of 15.1%, at the top of the target range set by the group.
Total revenue rose 3.5% to €33.213 billion, driven mainly by demand in premium classes on transatlantic routes, where IAG has a market share of almost 49%. “We recorded another year of exceptional performance in 2025, delivering continued improvements in punctuality and satisfaction to our customers”, said Luis Gallego, CEO of IAG, in a statement.
In addition to profits, IAG announced that it will return €1.5 billion to shareholders over the next 12 months, “starting with a €500 million share buyback in May, an increase from the €1 billion announced in February”.
The company is also proposing a final dividend of €228 million, bringing the total dividend for the year to €448 million, an increase of 8.9% per share compared to 2024. In the statement, the group reports that adjusted earnings per share grew 22.4% to 69.5 cents.
This is precisely where TAP comes into the equation. In the same document, IAG explicitly confirms its participation in the privatisation process of the Portuguese airline, noting that it is “currently participating in the partial sale” of TAP by the Portuguese government, which it considers “a strategically interesting opportunity for the group, but one that must be done on terms that create value for IAG shareholders”. The choice of words is not neutral: IAG wants TAP, but not at any price.
The financial performance now revealed reinforces the British-Spanish group’s negotiating power. With net debt of €5.948 billion and a leverage ratio of 0.8 times EBITDA — well below the maximum limit of 1.8 times set by the company itself — IAG has the financial leeway to proceed with an acquisition.
The results show that the group generated free cash flow of €3.1 billion in 2025 and projects a figure of over €3 billion for this year. It is with this solidity that it faces competition for TAP, in a process that should define the future of the national carrier.
The robustness of the results is also due to a 6.9% reduction in fuel costs — from €7.608 billion to €7.083 billion — which offset the increase in other operating costs.
IAG also reveals that it has invested €3.4 billion in new aircraft, customer services, technology and infrastructure, and forecasts capacity growth of around 3% in 2026. The group also anticipated the arrival of SpaceX’s Starlink Wi-Fi in the fleet, with the first British Airways aircraft becoming operational in March.
Looking ahead, IAG remains positive about 2026, with first-quarter bookings described as “strong” and the added benefit of an earlier Easter. In the medium term, the group is targeting an operating margin of between 12% and 15% and a return on invested capital of between 13% and 16%.
For Portugal, the question that remains open is whether this European aviation giant — now richer, more confident and with full coffers — is willing to pay what the Portuguese government considers fair for TAP.
