The strength
of our connections
Annual Report and Accounts 2024
Management Report
IAG is required to prepare a
Management Report in accordance
with Article 262 of the Spanish
Companies Act and Article 49 of the
Spanish Commercial Code. Pursuant to
this legislation, this Management
Report must contain a fair review of the
progress of the business and the
performance of the Group, together
with a description of the principal risks
and uncertainties that it faces. In the
preparation of this report, IAG has
taken into consideration the guide
published in 2013 by the Spanish
National Securities Market Commission
(CNMV) which establishes a number of
recommendations for the preparation
of management reports of listed
companies.
The Management Report is composed
of the following sections:
The Annual Corporate Governance
Report is part of this Management
Report but has been presented
separately. This report has been filed
with the CNMV, together with
the required statistical annex, in
accordance with the CNMV Circular
2/2018, dated 12 June. The Annual
Corporate Governance Report and the
statistical annex are also available on
the Company’s website
www.iairgroup.com.
The consolidated Non-Financial
Information Statement and
Sustainability Information (together
referred to as the ‘Sustainability
statement’ in this Management Report)
complies with Spanish Law 11/2018, of
December 28, amending the
Commercial Code, the consolidated
text of the Capital Companies Law
approved by Royal Legislative Decree
1/2010, of July 2, Law 22/2015, of July
20, on Auditing, in matters of non-
financial and diversity information, and
Law 5/2021, of April 12, amending
Article 49.6.II, fourth paragraph, of the
Commercial Code. This statement is
prepared in accordance with the EU
Corporate Sustainability Reporting
Directive (CSRD) on a voluntary basis.
Strategic Report
1
Our purpose
2
Performance highlights
3
Chairman’s letter
4
Our connections
10
Management Committee
12
At a glance
14
Business model
16
Strategy
17
Chief Executive Officer’s review
21
Stakeholder engagement
32
Financial overview
34
Financial review
44
Regulatory environment
48
British Airways
50
Iberia
52
Vueling
54
Aer Lingus
56
LEVEL
58
IAG Loyalty
60
IAG Cargo
62
Sustainability
72
Risk management and
principal risk factors
Corporate Governance
92
Chairman’s introduction
to Corporate Governance
94
Our Board of Directors
97
Corporate Governance
112
Report of the Nominations
Committee
116
Report of the Safety,
Environment and Corporate
Responsibility Committee
120
Report of the Audit and
Compliance Committee
129
Report of the Remuneration
Committee
Financial Statements
154
Consolidated income statement
155
Consolidated statement of other
comprehensive income
156
Consolidated balance sheet
157
Consolidated cash flow statement
158
Consolidated statement of
changes in equity
160
Notes to the consolidated
financial statements
230
Alternative performance
measures
237
Group investments
Statement of Directors’
Responsibilities
Independent Auditor’s Report
Additional Information
251
Glossary
253
Aircraft fleet
254
Operating and financial statistics
Independent assurance Report on
the Consolidated Non-Financial
Information Statement and
Sustainability Information
Consolidated Non-Financial
Information Statement and
Sustainability Information
263
General requirements
275
Environment (Planet)
292
Social (People and prosperity)
309
Governance
314
Appendix
323
EU Taxonomy
Shareholder Information
333
Shareholder information
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Contents
12
At a glance
14
Business model
16
Strategy
21
Stakeholder engagement
32
Financial overview
34
Financial review
44
Regulatory environment
48
British Airways
50
Iberia
52
Vueling
54
Aer Lingus
56
LEVEL
58
IAG Loyalty
60
IAG Cargo
62
Sustainability
72
Risk management and principal
risk factors
255
Independent assurance Report
on the Consolidated Non-
Financial Information Statement
and Sustainability Information
263
Consolidated Non-Financial
Information Statement and
Sustainability Information
View our online annual report at:
www.iairgroup.com/investors-
and-shareholders/financial-
reporting/annual-reports/
Our purpose
Connecting
people,
businesses
and countries
At IAG, our purpose is to connect
people, businesses and countries
using aviation as a force for good.
We believe in the transformative
power of flight: enabling personal
and professional connections,
supporting global trade and
fostering the discovery of new
places, ideas and experiences.
Our airlines provide critical
infrastructure, delivering goods
from food on shelves to medicine
in pharmacies.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
1
Delivering
sustainable returns
2024 has been a very strong year for IAG. We continue to see strong
demand for travel in our core markets. Our transformation programme
is delivering better customer experiences as well as improving financial
performance. We are committed to sustainable shareholder returns.
Financial highlights
Revenue
€32,100 million
+9.0% vly
Operating profit before exceptional items1
€4,443 million
+€936 million vly
Free cash flow1
€3,556 million
+€2,236 million vly
Operating profit
€4,283 million
+€776 million vly
Share buyback
€350 million
Total dividend
€0.09 per share
Interim dividend €147 million, final dividend €288 million
Non-financial highlights
Carbon intensity
78.1gCO2/pkm
-3.0% vly
Net Promoter Score (NPS)
22.6pts
+4.0 pts vly
Senior leadership roles held by women
36%
+0 pt vly
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Performance highlights
International Airlines Group | Annual Report and Accounts 2024
2
1
For more information, see Alternative performance measures section.
In 2024, we remained focused on our
purpose of connecting people,
businesses and countries as we continue
to deliver our strategy. We are proud
that aviation remains a catalyst for
economic and social good, helping
people do business, trade, study and
see friends and family around the world,
and discover new ideas, places and
experiences.
In terms of financial performance, this has
been a very good year for IAG, marked
by strong operating profits and margins
across the Group. These results have
enabled us to deliver sustainable returns
to shareholders, enhance our balance
sheet and reinvest in the business. In an
important milestone, we were pleased to
announce the resumption of a dividend
and a share buyback for the first time
since COVID-19.
On behalf of the Board, I would like to
thank IAG’s 74,400 employees, whose
contributions have been key to making
this year a success. The strength of
our business is a direct result of their
dedication and hard work, and without
them we would not have been able to
deliver such a strong set of results. I
would also like to extend my thanks to
our shareholders for their continued
support.
Aviation as a force for good
Airlines play an important role in
connecting and uniting communities.
Our airlines, and the hubs in which they
operate, are part of critical infrastructure,
facilitating trade, connecting businesses
and supporting broader economic growth.
Aviation is a key driver of economic
activity through direct investment,
employment and our supply chain.
Our people driving change
Our people play a critical role in driving
our strategy. They continue to support our
Group-wide transformation programme.
This year, the Board dedicated more time
to visiting our frontline colleagues to gain
valuable insights from those directly
involved in the day-to-day operation.
Our strategy is working
We continue to be guided by our strategic
imperatives: strengthening our core,
driving growth through our
complementary businesses and airline
partnerships, operating under a robust
financial and sustainability framework and
- this year – accelerating and scaling up
our delivery. As a result, we grew revenue
by 9.0% to €32 billion, increased our
operating profit before exceptional items
by 26.7% to €4,443 million and our margin
by 1.9 percentage points to 13.8%. We
generated free cash flow of €3.6 billion
and, with a strong balance sheet, delivered
on our commitment to shareholder
returns. In 2024, we maintained our
leading position in the world’s most
valuable aviation markets, serving 122
million customers globally. We saw strong
demand for travel with our Group capacity
surpassing pre-pandemic levels of flying,
underscoring that people continue to
prioritise experiences and face-to-face
connections. Demand for travel remained
robust throughout the year, particularly in
our core profit pools of the North Atlantic,
Latin America and intra-Europe, and
through the efforts of our transformation
programme, we continued to build an
even stronger and more efficient set of
customer propositions. We took delivery
of 19 new aircraft as part of our ongoing
investment in our fleet, and Iberia was the
global launch customer of the Airbus
A321XLR. In addition to strengthening our
airlines’ leadership positions, IAG Loyalty
is an increasingly attractive part of our
portfolio, with BA Holidays joining its
business this year. Our operational,
commercial and financial performance
demonstrates that our strategy is working.
Progress in sustainability
Sustainability is part of IAG’s core strategy.
We have shown leadership in the sector,
as the first airline group globally to commit
to net zero by 2050, and we have a clear
plan to achieve our targets. As well as our
investments in more fuel-efficient aircraft,
we are investing in lower-carbon fuels and
technologies, prioritising sustainable
aviation fuel (SAF). But we are facing
regulation, including SAF mandates that
will increase costs to airlines and their
customers. We need all stakeholders in
the aviation ecosystem to work together
to enable the low-carbon transition while
retaining competitiveness across
European aviation.
Overcoming challenges and looking
ahead
While our results are strong, our industry
overall is facing headwinds. There have
been ongoing issues with air traffic
control (ATC) throughout Europe and
fleet and supply chain delays, which
have resulted in some operational
challenges for our airlines. We are
affected by geopolitical changes and
conflicts and often need to manage their
consequences, including a fluctuating
fuel price and airspace restrictions and
congestion. The political landscape
and policy environment are constantly
evolving, but, as a group, IAG is resilient
to market challenges, thanks to our
scale, core markets and the diversity
of our brands.
As we look ahead to the coming year,
we will continue to deliver our strategy,
targeting sustainable growth and returns,
while positively contributing to the
economies and communities we serve.
Javier Ferrán
Chairman
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Chairman’s letter
International Airlines Group | Annual Report and Accounts 2024
3
Javier Ferrán
Chairman
Committed
to our purpose
Javier Ferrán, Chairman, reviews 2024, a year
in which we continued to deliver our strategy
and transformation – ensuring we are even
better placed to deliver on our purpose.
Connecting people
with new experiences
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
4
IAG airlines serve 122 million
customers in 91 countries
around the world, and we’re
proud to connect people with
experiences. From family
celebrations to life-changing
moves, we make journeys that
matter possible, broadening
horizons every day.
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
5
British Airways launches Customer Access
Advisory Panel
As part of British Airways’ continued commitment to
providing a seamless travel experience for customers
with visible and non-visible disabilities, the airline launched
its new Customer Access Advisory Panel. The panel is
committed to identifying ways to improve the end-to-end
customer experience for travellers who may require
additional assistance.
Viva Las Vegas
A new Aer Lingus route to Las Vegas took off in October,
connecting Irish passengers with new experiences such
as the Sphere Las Vegas, the world’s first next-generation
entertainment venue, on which the airline advertised
its inaugural flight.
Speedbird Pilot Academy expands
As part of British Airways’ commitment to inspiring
future talent and ensuring equal opportunities, the airline
is expanding its Speedbird Pilot Academy. It will now
fully fund training for up to 200 aspiring pilots annually,
up from 60 places in 2023. This initiative breaks down
financial barriers, making a career in aviation more
accessible to all.
Connecting businesses
with opportunities
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
6
We are inspired by the good we
can do in the world – connecting
businesses with opportunities,
supporting economies and
creating jobs. By facilitating trade
and transporting essential goods,
we help businesses grow, thrive
and build stronger connections.
New partnerships
IAG Loyalty has renewed its partnership with Nectar,
extending the agreement until 2028. This collaboration, which
includes key brands such as Sainsbury’s and Argos, enables
members to access the benefits of both loyalty programmes.
Customers will continue to be able to transfer Nectar points
to Avios via their British Airways Executive Club account.
Supporting growers and exporters
IAG Cargo expanded its perishable centre in Madrid by 45%,
boosting capacity and supporting growers and exporters
between Latin America and Europe, ensuring fresh produce
reaches market efficiently.
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
7
50 years of Spain’s air shuttle
In 2024, Iberia’s most iconic route, the Madrid to
Barcelona ‘Air Shuttle’, celebrated its 50th anniversary.
The airline marked the milestone with the opening
of a new dedicated check-in area at Madrid–Barajas
Airport and introduced two new fare options tailored
to the evolving needs of business travellers. The route
between Spain’s two biggest cities was the first Air
Shuttle in Europe and remains Iberia’s flagship route.
Partnership with Barcelona
Supercomputing Center
Vueling has joined forces with the Barcelona
Supercomputing Center (BSC) in a three-year
partnership that will give the airline access to BSC’s
cutting-edge systems, data and scientific expertise.
This partnership will include access to specialist
training ranging from advanced weather forecasting
– including dust storm data – to predictive analytics
for passenger and baggage management.
Connecting countries
and communities
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
8
Aviation bridges countries
and communities, so it is vital
we use our global network
to support the communities
we serve. IAG is dedicated
to supporting charities and
relief efforts around the world
and closer to home. Thank
you to our people, customers
and partners for their
commitment to our social
and environmental initiatives.
Organ transportation
Since 2013, Vueling has partnered with Spain’s
National Transplant Organisation, playing a pivotal
role in the transportation of over 900 organs.
As one of Spain’s leading organ transporters,
the airline has facilitated critical connections
across regions and countries, ensuring that
life-saving organs reach those in need on time.
UNICEF Copenhagen
Aer Lingus has partnered with UNICEF for
25 years, raising funds through its Change for
Good programme. CEO Lynne Embleton visited
the UNICEF Supply Division in Copenhagen to
learn how UNICEF procures and distributes aid
to 162 countries facing humanitarian crises.
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
9
The Earthshot Prize
As part of British Airways’ BA Better World
sustainability programme, the airline has partnered
with The Earthshot Prize to support the discovery,
investment in and acceleration of innovative
and scalable climate solutions for people and for
the planet.
Hurricane Beryl
Following the devastating impact of Hurricane
Beryl, IAG Cargo delivered critical aid to Grenada,
transporting tents, hygiene supplies, first aid kits,
bedding and food to support recovery efforts.
IAG Cargo activated its extensive logistics
network to ensure the aid reached those
in need without delay.
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Management committee
International Airlines Group | Annual Report and Accounts 2024
10
Nicholas Cadbury
Chief Financial and
Sustainability Officer
Adam Daniels
Chair and Chief
Executive Officer
of IAG Loyalty
Luis Gallego
IAG Chief
Executive Officer
Sarah Clements
General Counsel
Sean Doyle
Chair and Chief
Executive Officer
of British Airways
Julio Rodriguez
Chief Commercial
Strategy Officer
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International Airlines Group | Annual Report and Accounts 2024
11
Working together
to deliver on our strategy
The IAG Management Committee, led by Luis Gallego, is responsible
for the overall execution and delivery of the Group’s strategy.
Marco Sansavini
Chair and Chief
Executive Officer
of Iberia
Lynne Embleton
Chair and Chief
Executive Officer
of Aer Lingus
Carolina Martinoli
Chair and Chief
Executive Officer
of Vueling
Jorge Saco
Chief Information,
Procurement,
Services and
Innovation Officer
Jonathan Sullivan
Chief Corporate
Development Officer
Leading the way
in global aviation
We are the leading airline group from Europe to North
and Latin America, with extensive connectivity intra-Europe
and with the rest of the world.
Strategic Report
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Sustainability Statement
At a glance
International Airlines Group | Annual Report and Accounts 2024
12
Creating global connections
Available seat kilometres (ASKs) of IAG 2024 network
North Atlantic
30.7%
Intra-Europe
33.8%
Latin America
15.2%
Africa,
Middle East
and South Asia
11.9%
Asia Pacific
4.1%
Caribbean
4.3%
North Atlantic
#1
long-haul market from Europe by size
(€43 billion1 market)
London
#1
long-haul premium air travel2; US is
37% of London long-haul ASKs
Latin America
#1
revenue-growing market from Spain
(+60% vs 2019)
‘Madrid is the new Miami’
86%
increase in number of Latin Americans
in Spain; record real-estate foreign
investment3
Intra-Europe
Spain
#1
in domestic market in Europe4, and
Spain-UK corridor is the largest
market
Intra-Europe is a resilient market,
with record tourist visits
1
Source: IATA – DDS (exc. Russia and Turkey) Total Market Revenues by Origin and Destination (O&D) to/from Europe, full year 2024 (€ billion).
2 Source: OAG – London with 13,400 premium long-haul seats per day, followed by Dubai 11,100 and New York 8,900 as the top 3.
3 Source: INE – 2024 versus 2019. 20% of homes worth +€500,000 in Madrid bought by foreign nationals in 2023 (+11pts versus 2019); first six months
of 2024 was all-time high in property purchases by foreigners in Spain.
4 Source: OAG – IAG had a 55% seat share of this market in 2024
Our world-class airlines
and businesses
We bring together leading brands in our industry to form
a group that makes everyone stronger, together.
Strategic Report
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
13
The scale of our operation
259
destinations across 91 countries
122 million
passengers
74,400
employees globally
We have a portfolio
of world-class airlines
Aer Lingus
Fleet
58
British Airways
Fleet
293
Iberia
Fleet
112
LEVEL
Fleet
7
Vueling
Fleet
131
…and complementary
businesses
IAG Loyalty, including
BA Holidays
Avios issued
177 billion
IAG Cargo
Cargo tonne kilometres
5,253 million
Our airline partnerships
Atlantic Joint Business (with American Airlines and Finnair)
Qatar Joint Business (with Qatar Airways)
Siberian Joint Business (with Japan Airlines and Finnair)
Peru and Ecuador Joint Business (with LATAM)
China Joint Business (with China Southern)
oneworld
For more information, see the
operating companies’ sections
Our business model
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Business model
International Airlines Group | Annual Report and Accounts 2024
14
Our resources
and relationships
Global leadership positions
IAG has leading networks and
schedules in three of the world’s
most attractive aviation markets:
North Atlantic, Latin America
and intra-Europe.
A portfolio of world-class
brands
Our airlines are the leading brands
in their home hubs. From full service,
through value, to low-cost carriers,
we are focused on delivering the best
service for our customers’ needs.
A modern, fuel-efficient fleet
We continue to invest in the latest,
fuel-efficient aircraft. Our network
and schedule are delivered by our
fleet of 601 long-haul and short-haul
aircraft across our brands.
The best people
We hire, train and deliver our
services with the best people.
We are led by a professional and
experienced management team.
Strong capital structure
Our first capital allocation priority
is for a strong balance sheet, which
is investment grade. After investing
in the business, we then prioritise
returns to shareholders, through
dividends and additional cash returns.
Our proven business model
Our business model is centred on
our purpose: to connect people,
businesses and countries. We are
an active parent company that
invests in our airlines, with a culture
of being stronger together.
Our operating model
The Group’s structure maximises
total returns for our shareholders.
As the parent company, IAG is
responsible for managing and
allocating capital, driving overall Group
performance and setting the agenda
for sustainability and innovation.
Drive portfolio and financial
strategy
IAG allocates capital where it can
get the most sustainable returns
for shareholders. As a result, IAG
has a track record of delivering
market-leading financial results:
• Drive Group corporate strategy;
set the portfolio
• Allocate capital, manage the
balance sheet and shareholder
returns
• Manage financial stakeholders
• Drive value through M&A,
partnerships and joint businesses
• Manage funding of the business
Manage performance
IAG performance-manages the
operating companies and each of
our businesses is fully accountable
for its own performance:
• Performance accountability
• Commercial independence
• Operational independence
• Customer value proposition and
relationship
• People management
• Management of relevant
stakeholders
Facilitate value capture
and share best practices
The operating model brings
different companies together to
share ideas and expertise and to
track progress. We are able to
collaborate and challenge one
another when it is helpful to do so.
With this approach, we:
• Set the ambition for the Group
• Drive top talent management
and pipeline
• Drive the sustainability agenda
• Facilitate the capture of additional
synergies
• Drive innovation
• Provide centres of excellence to
facilitate best-practice sharing
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
15
The value we create
for our stakeholders...
Our investment case
Long-term secular
growth industry
A proven history of multi-decade
GDP+ demand growth, driven by
tourism, visiting friends and relatives,
and economic development
A strong competitive
advantage
• Unique model drives disciplined
capital allocation and leading
performance
• Significant position in three of the
world’s most attractive aviation
markets
• Leading brands at our hubs
• Rewarding customers through
world-class loyalty programmes
Generating world-class
margins and returns
Transformation and innovation
to deliver 12%-15% margin targets:
• Transforming British Airways
• Developing our Spanish businesses
• Capital-light, high-margin growth
at IAG Loyalty (including our
holidays businesses)
Investment and scale to deliver
sustainable long-term
market-leading returns.
Maximising shareholder
returns
• Significant free cash flow generation
• Sustainable dividends
• Excess cash returns to shareholders
Customers
Customers choose us
primarily for our extensive
network and schedule
and because they trust
our brands.
Employees
Employee contribution is
paramount to our strategy.
Each operating company
has established effective
ways to engage, listen and
act on employee feedback.
Suppliers
IAG is dependent on the
performance of key
suppliers that provide goods
and services to our
customers including aircraft,
engines, maintenance,
airport operations and
catering supplies.
Shareholders, lenders
and other financial
stakeholders
Our investors are looking
for a stable business with
a strong balance sheet
and sustainable demand
for travel.
Governments and
regulators
Government policies impact
many aspects of IAG’s
businesses. We seek to
engage responsibly to
benefit our customers.
...and for society
Our vision is to be a world-leading
airline group in sustainability.
See the Sustainability section for further
information.
Maximising
shareholder value
We have a strong track record of financial performance in line with
our targets. We are committed to maximising total shareholder returns.
Strategic
imperatives
A strong core
Capital-light earnings
growth
A robust financial and
sustainability framework
Strategic
priorities
Growing our
portfolio of global
leadership positions
Developing
our loyalty and holidays
businesses
Performing disciplined
capital allocation and
balance sheet management
Strengthening
our portfolio of
world-class brands
Leveraging our strategic
airline partnerships
Being an industry
leader in the transition
to net zero
Strategic goal
Maximising total shareholder returns while
balancing the interests of all our stakeholders
Our medium-
term ambitions
12-15%
operating margin
13-16%
RoIC
2-4% organic
ASK growth1
<1.8x leverage through
cycle to support
inorganic growth
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Strategy
International Airlines Group | Annual Report and Accounts 2024
16
Our key
performance
indicators (KPIs)
Operating margin2
13.8%
RoIC
17.3%
ASKs
6.2% á
Leverage3
(times)
1.1
+1.9% vly
+2.5 pts vly
vly
-0.6 times vly
PRASK4
3.1% á
Non-fuel CASK5
2.6% á
Adjusted EPS
(€ cents)
56.8
Gross capex
(million)
€2,816
vly
vly
+12.3% vly
-€466 vly6
Alternative performance
measure
Measure linked to remuneration of
Management Committee
Link to our strategic imperatives
1
Medium term per annum growth, dependent on aircraft deliveries.
2 Measured as Operating profit before exceptional items divided into Total revenue before exceptional items.
3 Measured as Net debt to EBITDA before exceptional items.
4 Measured as Passenger revenue before exceptional items per available seat kilometre.
5 Measured as total operating expenditure excluding fuel and emissions costs before exceptional items per available seat kilometre.
6 The 2023 results include reclassifications to conform with the current period presentation for carbon-related assets. Further information is given in note 2
to the consolidated financial statements.
At IAG, we make a positive difference in
the world by delivering on our purpose
of connecting people, businesses and
countries. In 2024, our airlines flew more
than 122 million customers to 259
destinations and transported valuable
cargo across our global network. What
we collectively achieved is only possible
thanks to the talent and dedication of
our people across all our operating
companies, and I want to start by
thanking them for their commitment.
Furthermore, because of our strategy
and Group-wide transformation, we are
not only delivering industry-leading
results, but becoming a more
sustainable business for the future.
Financial and strategic highlights
In 2024, we delivered in line with our
medium-term financial targets. IAG
achieved an operating profit before
exceptional items of €4.4 billion, an
improvement of €936 million versus 2023.
Our operating margin before exceptional
items for the full year was 13.8%, compared
with 11.9% in 2023. We generated €3.6
billion of free cash flow, up €2.2 billion
from €1.3 billion in 2023, and we finished
the year with net debt of €7.5 billion
and leverage at 1.1 times.
Thanks to our capital allocation
framework, our strong free cash flow
and financial position have allowed us
to continue to invest in the business for
our customers. We spent €2.0 billion
this year on renewing our fleet. We took
delivery of 19 new aircraft, including the
first Airbus A321XLR, with Iberia as the
global launch airline in October. Two
further XLRs joined Aer Lingus’ fleet
later in the year. Through our strong
margin and balance sheet, we have been
able to accelerate the return of capital
to our shareholders. We started by
announcing an interim dividend of €0.03
per share at our half-year results, followed
by a proposed final dividend of €0.06
per share, and in November we
announced a share buyback of
€350 million. In February 2025, we
announced our intention to return up to
€1,000 million of excess capital to
shareholders in up to 12 months, driven
by our significant cash flow generation.
Our strategy in action
Our financial performance demonstrates
that our strategy, underpinned by our
Group-wide transformation programme,
is working. This year we continued
to execute our strategy according to
our three strategic imperatives. Firstly,
we strengthened our core airline brands,
taking advantage of opportunities
to grow within the attractive aviation
markets of the North Atlantic, Latin
America and intra-Europe. Secondly,
we grew our capital-light businesses
and airline partnerships. Thirdly, we did
this in a way that is sustainable both in
terms of managing our environmental
and social impact alongside a solid
financial framework. Our three strategic
imperatives are underpinned by
our transformation and innovation
programme, which allows IAG to
maximise value and efficiencies to create
a more profitable business overall.
Strong core brands and markets
In our core profit pools of the North
Atlantic, Latin America and intra-Europe,
we are benefitting from sustained
demand for travel, which we expect will
be a long-term trend. Between IAG and
its joint business partners, we operate an
average of 273 daily flights from Europe
across the Atlantic, carrying 23 million
passengers a year. In 2024, Aer Lingus
launched a new route to Denver and
reopened Minneapolis, while Iberia
added further frequencies to core
destinations in the United States and
Latin America. British Airways retains its
position as the leading European-to-US
airline, operating direct flights to more
than 30 cities in the US and Canada.
The introduction of the Airbus A321XLR
to Aer Lingus and Iberia will give us a
competitive advantage over our peers,
by leveraging our geographic location
to develop our network at a lower cost.
We are pleased to have completed the
Air Operator Certificate for our low-cost
long-haul carrier, LEVEL, which will
now be able to develop its transatlantic
network. We are a successful group
and growing well organically. Regarding
the Air Europa transaction, we took the
decision to withdraw from the process
in August when we considered the deal
was no longer in the best interests of
our shareholders. We will consider future
acquisitions only if they add further
value to the Group.
Asset-light businesses and airline
partnerships
Alongside our airlines, we are committed
to developing our asset-light,
complementary businesses, principally
IAG Loyalty, which now includes BA
Holidays. IAG Loyalty offers higher
growth and higher margins than our
core businesses as well as sustainable,
non-seasonal cash generation. Customer
participation in our loyalty programme
is growing well with 24% more Avios
issued in 2024 compared with 2023.
We increased the number of Avios
currency partners in 2024, with 7 airlines
now subscribed to the use of Avios as a
global currency. Within IAG Loyalty, BA
Holidays has the potential to develop,
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17
Luis Gallego
IAG CEO
Our strategy
is delivering
Luis Gallego, IAG CEO, reflects on 2024, a year in
which the Group continued to deliver its strategy,
underpinned by its transformation programme.
leveraging loyal airline customers and
adding to the overall profitability
of the business. Our strategic airline
partnerships remain very important
to our business. They give us access to
a larger global customer base and
reward customers with a greater choice
of destinations covered by our loyalty
schemes. We greatly value our joint
businesses and oneworld alliance and
continue to strengthen these.
Strengthened financial framework
As a result of the strong performance
across both our core and
complementary businesses, we are
making good progress in delivering
against the medium-term targets we
set ourselves at our Capital Markets Day
(CMD) in 2023. While our operating
margin of 13.8% is in line with our target
range of 12-15%, our ambition is to be
towards the top end of the range.
Our return on invested capital is 17.3%,
ahead of our 13-16% target range.
Our leverage is now 1.1 times against
our through-the-cycle target of less than
1.8 times. In terms of the growth of our
airline capacity, measured by available
seat kilometres (ASKs), we are targeting
an average growth of 2-4% over the
medium term, dependent on aircraft
deliveries; in 2024 this growth was 6.2%.
Commitment to sustainability
We recognise the need for the world
to achieve net zero emissions by 2050
and for the aviation sector to develop
sustainably.
In 2024, we continued to make progress
in line with our sustainability roadmap,
achieving our 2025 carbon intensity
target of 80.0g/pkm a year early. As at
the end of the year, we have committed
$3.5 billion in total in SAF offtake
agreements which gets us closer to our
target of 10% SAF by 2030. In 2024,
19 new aircraft joined our fleet, which
contributes to fuel efficiency, as well
as providing an enhanced customer
experience. IAG continues to work with
SAF producers to secure our needs and,
in 2024, we signed e-SAF agreements
with US producers Twelve and Infinium.
In Spain, we reached an agreement with
energy company Repsol for the largest
SAF purchase in Spain. The sector
is focused on its sustainability
commitments and is investing to ensure
we are compliant with existing regulation
and to prepare for SAF mandates coming
into force in Europe and the UK in 2025.
We need governments to provide further
support for SAF, including measures to
encourage private sector investment and
to avoid additional regulation that risks
making European aviation less competitive
than other global competitors.
Transformation and innovation
While IAG is delivering its strategy,
it is also transforming to be more
efficient and resilient for the future.
Transformation is a Group-wide
project, with best practice shared
at the Group level. We focus on
transformation initiatives leading
to positive customer, operational,
sustainability and financial outcomes.
Transformation enables us to stay
competitive, but innovation will help
us accelerate even further. In order to
spot areas for collaboration and avoid
duplication, we have a central innovation
team with oversight of all the innovation
activities running across the Group.
In 2024, we launched the eighth edition
of our Hangar 51 accelerator programme,
where we bring outside innovation into
the Group with initiatives in strategic
areas including sustainability, operations,
airports and customer experience.
A big priority is artificial intelligence (AI).
There are many creative ways AI is
already being used in the sector, from
optimising flight paths to finding
personalised travel itineraries. Our size
and diverse mix of operating companies
means we can invest much more
efficiently than any one airline. We have
a designated team to oversee this work
as well as two bespoke AI labs in
London and Barcelona.
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International Airlines Group | Annual Report and Accounts 2024
18
People driving transformation
Our 74,400 employees across the Group
are embracing our transformation
journey by innovating and doing things
differently. We are committed to
supporting employees at all stages of
their careers so that they continue to
develop and embrace transformation.
We support early-stage careers through
graduate and apprenticeship
programmes, and our pilot training
academies in Aer Lingus, British Airways
and Iberia are offering funded training
schemes to a new cohort each year.
We continue our focus on building
and maintaining a diverse workforce.
At the end of 2024, 36% of our senior
leadership roles are held by women, so
we recognise there is still work to do,
and we remain committed to meeting
our ambition of 40% by 2025.
Challenges and outlook
Our people worked extremely hard in
2024, and we have achieved very good
results. But this does not mean we have
not faced challenges.
There is ongoing macroeconomic
volatility and geopolitical conflict. The air
traffic control (ATC) situation in Europe
has been extremely difficult, made
worse by weather-related disruption
and congestion due to conflict-related
airspace closures. This led to almost
record levels of disruption. According
to data from Eurocontrol, 2024 was the
second-worst year for ATC delays ever,
after 1999. At that time, the aviation
sector called for structural reform of
ATC, calling for a system that became
known as Single European Skies.
Now, we must work together as airlines,
airports, air service navigation providers,
governments and regulators to make
it happen.
While we support the UK Government’s
commitment to a third runway at
Heathrow, the airport remains the most
expensive for passengers anywhere in
the world, with a declining customer
experience that does not match the
price. So any expansion can only happen
with regulatory reform. We look forward
to working with the UK Government,
Civil Aviation Authority and Heathrow to
reduce fees and improve the outcomes
for consumers.
Fleet delivery delays while not
significantly impacting IAG in 2024,
are an ongoing concern in terms of
constraining future growth. Supply chain
issues have had a significant impact,
particularly in terms of the maintenance
of British Airways’ long-haul fleet.
We want, as far as possible, to protect
our customers from the impact of these
issues. Our airlines are taking steps to
ensure they build enough resilience into
the system to manage these factors.
Despite these headwinds, we are
positive about the outlook for 2025
based on a number of factors. We
continue to operate in some of the most
attractive aviation markets anywhere in
the world with strong consumer demand
expected to continue. We plan to grow
our network and connectivity in 2025,
continuing to invest in our fleet,
customer proposition and IT, while
transforming and carefully managing
costs. This will allow us to continue
delivering world-class profit margins
of between 12 and 15% and to generate
sustained significant free cash flow,
to maintain a strong balance sheet and
to provide more returns to shareholders.
Stronger together
2024 has shown what IAG and all its
businesses can achieve as a Group.
IAG is a diverse group and our
businesses all bring different strengths.
Through collaboration, we can learn
from one another, transform in an
innovative way and become more
competitive now and for the future.
Our strategy and transformation are
bringing strong results and give us
confidence in what we can achieve
in 2025. We remain committed
to executing our strategy and
transformation and delivering a
sustainable business for our people,
customers and shareholders.
Luis Gallego
IAG CEO
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International Airlines Group | Annual Report and Accounts 2024
19
Transformation
To ensure we remain a strong and
sustainable group, we continue to focus
on executing our strategy, underpinned
by our transformation. Throughout
2024, we made good progress on our
transformation journey, focusing on
moving forward, being better and doing
things differently. This year has been
dedicated to planning and execution,
with more than 2,100 initiatives
underway across the Group. This is
an impressive result, and we believe
it is our transformation programme
that is setting us apart from our
competitors and delivering our
best-in-class operating margins.
Innovation
Transformation will keep us competitive,
but innovation will allow us to stay
ahead. We want to be the leading
airline group for innovation, delivering
commercial value from our core
businesses, and it is through our six
focus areas that we will deliver our
innovation strategy. These innovation
focus areas are made up of:
• Enhanced airport operations and
experiences
• Safe and efficient operations
underpinned by technical excellence
• Sustainable operations on the ground
and in the air
• Personalised in-flight experiences and
on-board services
• Seamless end-to-end journeys
• Experiential and personalised loyalty
programmes
In September 2024, we made progress
towards delivering a better airport
experience, becoming a founding
partner and the only airline group in the
Singapore-based International Aviation
Lab consortium. The partnership brings
together expertise to develop innovative
solutions for the transformation of
airport operations around the world.
Our central innovation team, led by
Jorge Saco, Chief Information,
Procurement, Services and Innovation
Officer, has an overview of all of our
operating companies, enabling teams
to spot areas for collaboration and then
innovate to create better customer
experiences, increased operational
efficiency and more sustainable aviation.
Our model means we can invest in
innovation and deploy and test new
technologies across the Group, with
our teams harnessing AI, tech and digital
to help us overcome complexity within
our business. As the aviation sector
continues to evolve, we need to continue
to remain at the forefront of technology.
AI
We are using AI to supercharge our
transformation and empower colleagues
across the Group. There are many
creative ways this is already being used
in the sector, from optimising flight paths
to finding personalised travel itineraries,
and according to McKinsey, AI and
analytics could create $45 billion in value
globally for airlines1. We are building and
testing AI products that enhance the
customer experience, optimise operations
and drive sustainable efficiencies. IAG is
mobilising at pace, and the Group has
opened AI labs in London and Barcelona
as spaces to foster collaboration and
innovation. Five operating companies
now use a shared platform for their
automations and over 1,000 software
engineers have been equipped with AI
tools to boost productivity and efficiency.
We strengthened our AI engineering
platform, reducing software vulnerabilities,
and we have empowered our procurement
colleagues with a single AI-backed cost-
modelling tool for complex tenders.
Hangar 51
Through our Hangar 51 accelerator
programme, we are supporting start-ups
to scale and grow, and in 2024 we
partnered with 75 startups and
entrepreneurs to develop ideas that
improve operations, make travel easier
and help aviation become more
sustainable. Our Hangar 51 Demo Day
in November showed how a range
of new technologies, changes and
disruptions can bring valuable solutions
to our customers.
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International Airlines Group | Annual Report and Accounts 2024
20
Innovation
driving value
The 2024 Hangar 51 cohort
at the November Demo Day.
To read more about innovation,
please head to our website:
www.iairgroup.com/about-us/
innovation/
1
The Promise of Travel in the Age of AI, Skift & McKinsey (2023).
Connecting with
our stakeholders
Our key stakeholders
Effective engagement with
all of our stakeholders
is fundamental to ensuring
sound corporate
governance and promoting
long-term, sustainable
success, creating value
for our shareholders and
contributing to society
at large.
As described in the Business Model
section, we are committed to maximising
total shareholder return while balancing
the interests of all our stakeholders.
To do this, it is essential that we engage
effectively with all of them. Beyond
our key stakeholders, we believe our
businesses make a positive and meaningful
contribution to society at large, although
we also recognise the need to transform
for the future by investing in innovation
and sustainability to ensure we continue
to create value for all our stakeholders and
to be a force for good in the communities
in which we operate.
Our commitment to sustainability is
embedded in everything we do at Group
and operating company level, from our
interactions with customers to those
with employees and shareholders,
and forms part of our engagement
with all our key stakeholders.
The following pages provide an
overview of those we consider to be
our key stakeholders, explaining their
relevance to IAG’s business model
and strategy, the nature of our
engagement during the year, key topics
of interest and the challenges and
outcomes of that engagement.
Our statement in relation to
section 172(1) of the UK Companies
Act, 2006 as well as further information
on our engagement with shareholders
and our workforce, is set out in the
Corporate Governance and
Sustainability sections of this report.
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Customers
Key metrics
Why they are important
Our customers are central to the success
of IAG. Customers choose us primarily
for our extensive network and schedule
and because they trust our brands. We
fly from Europe to five continents.
Through our wide range of partnerships,
our customers benefit from an even
larger global network covering most
countries in the world.
Net Promoter Score (NPS)
22.6 pts
+4.0 pts vly
• We aim to provide unrivalled
customer propositions and a
portfolio of world-class brands
targeting specific demand
spaces and travel occasions.
• Passenger revenues, including
fares and ancillaries, are the
most important source of
revenue for IAG.
• Delivering outstanding
customer experience at all
levels of the business and all
brands will give us a leading
position.
• Recognising our most loyal
customers through loyalty
programmes, allowing them
to earn rewards on a broad
range of items when flying
with our airlines and partners,
creates value for both IAG
and our customers, and builds
the relationship.
Other metrics used to track engagement include:
• Customer satisfaction (CSAT) – rates
a customer’s experience on key touchpoints
in their customer journey
• NPS and CSAT – inform business priorities
during the business-planning stage, helping
to prioritise internal initiatives to drive
satisfaction improvements
• Claims and complaints – provide deeper
insights into customer challenges, helping
identify areas for improvement in products,
services and customer interactions
• Contact centre KPIs – help assess the
efficiency, effectiveness and quality of
customer interactions
How we engaged
Key topics
• Daily ‘Customer Voice’ survey sent to customers who have recently flown with us,
collecting feedback on their experience.
• Customer feedback through a variety of channels (contact centres, social media, feedback
from customer-facing employees) and partners (crews, lounge colleagues and ground
handling agents) helps us understand key pain points throughout the customer journey.
• Brand surveys are performed to understand and meet the needs and expectations of
our customers.
• Claims and complaints can be raised through different channels and are monitored to
accommodate our customers and enable action where necessary.
• Contact centre services and other digital channels, for example chatbots on our websites
or WhatsApp 24/7, are used so that customers can reach out when needed.
• Information including latest changes in service or product enhancements through various
channels, including websites, emails and dynamic social media accounts.
• Guidance and a high standard of customer care are required throughout the customer
journey from both airport and on-board colleagues.
• Punctuality and operational
resilience
• Process optimisation:
streamlined baggage
handling, boarding and
flight connections
• Digitalisation of the customer
journey and enhancing self-
service capabilities
• Personalisation of customer
experience
• Rewarding customers
through loyalty programmes
and benefits
• Service quality and in-flight
comfort
• Communication and support
during disruptions
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International Airlines Group | Annual Report and Accounts 2024
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Iberia – omnichannel strategy
Iberia has advanced its omnichannel
strategy by integrating AI into its virtual
assistant, improving customer service
through both voice and text channels.
The airline also expanded its WhatsApp
functionality, allowing customers to
check in, view bookings, get flight status
updates and access boarding passes.
Additionally, a new payment feature
for baggage add-ons was introduced,
and exclusive channels for Iberia Plus
members were launched. The integration
of voice solutions and expansion into
Facebook Messenger are set to be
completed by the end of the year.
In 2024, Iberia saw notable growth in
its digital services. Call deflection
through its voicebot of 28.0%, an
increase of 6.4 percentage points from
21.6% in 2023, while WhatsApp chatbot
sessions grew by 59%, reaching 1.3
million.
The website and app have been
upgraded with interactive destination
maps, personalised profiles through
My Iberia, and self-service options for
booking, check-in and flight changes.
Enhanced features also include a
refined search engine and easier
management of seat and ticket
changes, providing a more seamless
and efficient experience for customers.
Challenges
Outcomes
• Loss of customer loyalty –
dissatisfied customers are more likely
to switch to competitors
• Reputation and brand equity –
unhappy customers are prone to
sharing negative experiences, which
can harm the airlines’ reputation
and brand image
• Decreased growth – negative
reviews may make it difficult for
the airline to attract new customers,
impacting growth
• Financial risks – there are costs
associated with addressing customer
complaints, providing compensation
and marketing efforts to repair the
brand image
• Employee satisfaction – low
employee morale is often evident
to customers, which can result
in poorer customer experiences
• Customer experience – although
our teams work diligently to elevate
customer experience through
investment in digitalisation and
customer care, we continue to
identify opportunities for
improvement and learning,
particularly in areas such as
ensuring timely and comprehensive
communication to customers
about schedule changes
Feedback from our customers is key to enhancing their experience. IAG’s holistic
approach uses all available data from various channels to inform product and service
strategy decisions. 2024 outcomes include those set out below:
• Enhanced digital and self-service capabilities: British Airways introduced
Conversational AI, allowing customers to independently address simple queries,
while enabling agents to focus on more complex cases. Iberia focused on advanced
self-service features, including a premium digital concierge, enhanced 'Manage
My Booking' functionality, and improved multi-channel communications to
proactively address disruptions. Vueling and Aer Lingus have similarly enhanced self-
service functionalities and mobile-first platforms, improving efficiency and customer
autonomy. Aer Lingus introduced Revolut Pay to offer a one-click checkout.
• Operational efficiency and punctuality: Optimising operations for reliability and
punctuality remains a priority. British Airways implemented a new operating model
at Heathrow focused on resilience. Iberia leveraged AI insights to redesign service
desks, and Vueling harmonised its fleet to minimise disruptions. Aer Lingus upgraded
check-in, boarding and bag-drop processes, and also enrolled in TSA PreCheck
to facilitate faster security processing at US airports.
• Personalised engagement and communication: All operating companies emphasised
tailored communications, with Aer Lingus introducing dynamic messaging aligned with
its brand values and Iberia offering proactive, multi-channel updates during disruptions,
similarly to British Airways. Vueling enhanced the backend systems of their contact
centres with AI, enabling faster responses, real-time translations, and significantly
streamlining the refund process, all of which improve customer connections.
• Service excellence and in-flight experience: Improvements in service quality
included Iberia's revamped in-flight amenities and menu enhancements, Aer Lingus'
consistent cabin propositions and expanded entertainment options, Iberia Express'
fleet retrofits to enhance in-flight entertainment connectivity, and British Airways'
seamless booking experience through upgraded website functionality.
• Employee engagement and training: Iberia's "Todo Empieza Conmigo" is a customer
care training programme for frontline teams, now supported by the "League WebApp"
an service. Vueling’s SHINE programme has redefined customer service by emphasising
a customer-first approach beyond rigid procedure manuals. Aer Lingus invested in
automation and scalable platforms for its contact centres, and the airline also grew its
AerClub loyalty programme adding benefits like priority boarding and lounge access.
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Vueling – digitalisation
of customer care
Vueling is transforming customer service
with digital innovations that improve the
customer journey, enable self-service and
streamline operations. From cutting-edge AI
tools that personalise support to enhanced
agent capabilities and disruption management,
we are redefining customer care with
seamless, efficient, proactive solutions.
As one of the first airlines to launch a natural
language Virtual Assistant powered by
generative AI, we are already seeing strong
results. Within days of its fourth quarter
soft launch, the Assistant tripled digital
interactions compared to traditional
chatbots. This is vital as 65% of customers
contact us for queries, most of which
are solvable pre-emptively with the
right information.
Broader digitalisation supports this
transformation, with nearly 100% of
payments processed reliably and on time,
while new tools offer greater self-
management during disruption. AI-enabled
knowledge bases and translation tools
improve agent efficiency, ensuring faster,
high-quality customer support.
Insights from customer interactions
further enhance service. Analysing
patterns allows us to refine proactive
communication strategies and better
anticipate needs.
With a full rollout of the Virtual Assistant
planned and expansion to platforms like
WhatsApp, Vueling continues to focus
on digital innovation, meeting customer
needs, reducing costs, removing
operational bottlenecks and enabling
continuous improvement.
Employees
Key metrics
Why they are important
Across the Group we have 74,378
people employed across 77 countries.
Colleagues are united by our shared
purpose in the world: to connect people,
businesses and countries.
The IAG model empowers each
operating company to deliver for its
customers and people - with each being
responsible for managing recruitment,
pay and conditions, careers and
development for its colleagues.
Our operating companies actively
engage with trade unions to secure
balanced agreements, ensuring fair
and competitive remuneration.
Collective bargaining arrangements
are in place for circa 85% of the
workforce across the Group.
Recruited over
12,166
colleagues across
our IAG operating
companies and
businesses
• Our colleagues are the cornerstone of the delivery
of our customer service, business transformation
and strategic priorities.
• Each operating company is focused on building and
embedding the culture needed to be competitive,
achieve our transformation agenda and provide
a work environment in which colleagues can thrive.
• We believe diversity is key to innovation and
the future growth and success of the Group,
and we celebrate and benefit from the richness
of backgrounds, experiences, cultures and ideas
that we have.
• Our aim is that all colleagues feel their uniqueness
is recognised and valued. We continue to advance
our equity, diversity and inclusion ambition to create
a diverse and inclusive culture representative of the
communities we live and work in and the customers
we serve.
Invested in the skills
development of
82,796
employees (including
temporary workers),
with a total of
3,646,185 training hours
and an average of 57.5
hours per employee
How we engaged
Key topics
Each operating company and business has formal and informal
channels in place to engage with employees, listen and act on
employee feedback. They also provide opportunities to collect ideas
for improvement and innovation and enable colleagues to influence
and shape our plans and solutions. These channels are aligned to each
operating company’s unique culture and work environment and include:
• Roadshows, online employee forums, town hall meetings, internal
social networks, newsletters, workshops, pulse surveys, social media,
engagement groups, idea hubs
• Employee-led network and resource groups and communities,
which provide valuable channels for feedback on plans and initiatives
• Local employee representatives and unions, which offer formal and
informal channels for raising issues and concerns
• A Group-wide OHI survey, which is conducted every six months, plus
operating-company specific engagement surveys. Feedback informs
people and transformation plans
• The IAG European Works Council (EWC), which facilitates information
sharing between employees and management on transnational
European matters
• Designated IAG Board members who conduct workforce engagement
visits with operating companies to better understand the challenges
and opportunities employees are facing
• Terms and conditions, including competitive pay,
flexible working practices and rostering
• Career development opportunities, training
• Operational environment impacting performance
and roles: fleet, disruptions, maintenance, supply
challenges and IT issues
• Collaboration across teams and cross-functional working
• Investments in technology and fleet
• Safety and wellbeing
• Sustainability
• Improved communication with senior management
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International Airlines Group | Annual Report and Accounts 2024
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Challenges
Outcomes
• Managing the operational environment
impacts on performance and roles:
weather disruptions, operational issues,
air traffic disruptions, fleet,
maintenance, demand-supply
challenges and IT issues
• Resourcing, managing workloads
and transformation
• Communication and collaboration
across teams
• Improvement of IT and communication
systems
• Focus on competitive pay
• Ways of working for crew, including
rosters and impact of disruptions
• Working environments – many have
been refurbished and upgraded,
some are in progress
Our people are at the heart of our transformation and are key to enhancing our
colleague and customer experience – ensuring we stay current and future-focused.
The operating companies’ focus and investments are shaped by the ideas, feedback
and concerns raised by our people.
Over the past year, the operating companies have implemented several initiatives
as a result of engagement with our employees, capturing ideas for improvement and
addressing the challenges they have identified. We have placed a strong emphasis
on diversity and inclusion, invested in improving our facilities and work environment,
focused on ways of working and invested in careers and development:
• British Airways has acted upon feedback and improved the colleague experience
through several initiatives, including the introduction of improved parental leave
and time-off policies to provide colleagues with greater flexibility and support
when it is needed most. The airline also continues to refurbish and upgrade its
workspaces across the UK and overseas and has made improvements to the staff
travel offerings in response to colleague feedback.
• Aer Lingus continues to enhance internal communications channels with
the introduction of the employee Idea Hub and ‘Coffee n' Chats’ with the
executive team.
• British Airways is introducing better crew IT and communication systems – which
will improve their interactions with the company on rosters, crew check-in and
crew communications. The airline also rolled out 'Mobile Maintenance' iPads
to all maintenance engineers to replace paper manuals.
• Vueling has introduced the ‘Make it Better’ platform to tap into employee ideas
and to enable colleagues to collaborate to achieve business goals and improve
organisational health.
• IAG Cargo has implemented regular communications with staff through display
screens and meetings, which has improved clarity and feedback.
• Aer Lingus continues to expand its wellbeing offerings with the introduction
of a new monthly newsletter, Mindful Monday prompts and a new Wellbeing
hub on its internal AerWaves communication platform.
• IAG Cargo has put in place a range of training and development programmes to build
skills and develop leadership capability, including the 'Leading the Way' programme
hosted at the new London learning hub, and a new learning platform that provides
employees with the knowledge they need to succeed. Further to its launch last year,
the ‘Leading the Way’ programme has subsequently received external accreditation,
underscoring its quality and value in fostering professional growth.
• Iberia has improved facilities and upgraded the work environment including the
‘Firmas’ crew lounge – a space used by more than 6,000 cabin crew members.
Additionally, upgrades have been made to the back offices, parking areas,
canteens, changing rooms and toilets in the Maintenance area.
• IAG Loyalty launched a new strategy called ‘Develop You’ to build a strong team
and embrace agile working, focused on core skills, technical expertise and
knowledge to deliver the business plan. IAG Loyalty also launched ‘Recognise You’,
a peer-to-peer recognition approach designed to celebrate everyday wins, great
work and outstanding contributions.
• IAG head office invested in flexible working spaces, refreshed its training
programmes and introduced new flex benefits in response to colleague feedback.
Strategic Report
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International Airlines Group | Annual Report and Accounts 2024
25
Suppliers
Key metrics
Why they are important
IAG is dependent on the performance
of key suppliers that provide goods and
services to our customers and the Group,
these include aircraft, engines,
maintenance, airport operations and
catering suppliers.
IAG Procurement, a centralised Group
function, provides a supplier
management framework to manage
individual suppliers by ensuring
consistent and compliant governance
throughout the supply chain, actively
managing key suppliers.
IAG Fleet Investments manages the
relationships with aircraft manufacturers
and lessors on behalf of the Group,
ensuring that IAG benefits from the
overall volumes and relationships that
the Group has developed.
17,500
individual suppliers
• Suppliers are fundamental to ensuring we meet the
high standards expected by customers and other key
stakeholders to avoid potential impacts on operational
and financial performance, customer disruption and
reputational damage
• Supply chain integrity is critical to meet customers’
needs, ensure the reliability of our services and
support IAG’s sustainability agenda
• Suppliers adhere to the IAG Supplier Code of Conduct
which links to our commitment to sustainable growth
• Collaboration brings strong reciprocal benefits –
supporting long-term working relationships, centred
on clear and proactive contract management,
shared goals and mutual brand association
324
of the 601 aircraft
in the IAG fleet were
financed using
operating leases (at 31
December 2024)
2,600
supplier-associated
initiatives to reduce
supplier cost per
available seat kilometre
(CASK)
How we engaged
Key topics
• Supplier relationship management principles help classify and
prioritise key suppliers and build relationships, as well as monitor
and manage supplier and contract performance
• In 2024, IAG GBS’s focus was the quality of engagement with
key suppliers through obtaining EcoVadis scorecards covering
79% of IAG’s total spend
• As part of IAG’s Supply Chain Sustainability Programme, our
Watershed partnership for emission measurement and SEDEX
membership for on-site audits have strengthened carbon
accounting and responsible sourcing. We have also begun
collaborating with key suppliers to share best practices and
enhance net-zero efforts, with suppliers providing granular carbon
data to support IAG’s Scope 3 measurement
• Attendance at a range of industry conferences across all supply
categories to collaborate with suppliers
• Engagement with aircraft and engine manufacturers occurs at all
levels. Technical and operational issues are managed through
regular contact and scheduled meetings. More senior employees
manage commercial activities and overall relationship management
up to and including the IAG CEO
• Engagement on lease renewals, returns and the in-service fleet are
largely managed by the Fleet teams in the operating airlines.
• IAG’s Fleet and Environment teams engaged in detailed discussions
with major manufacturers to understand and influence activities
to support delivery of our environmental targets
•
• Supplier relationship management, essential for
optimising collaboration and value generation with
key suppliers
• Launch of Requests for Information (RFIs) and
Requests for Proposals (RFPs), which are vital to
ensuring a comprehensive and effective supplier
selection process. RFIs gather supplier capabilities
and preliminary details, while RFPs evaluate detailed
solutions to select the best fit based on specific
business criteria
• Benchmarking exercises, crucial for identifying best
practices, evaluating performance gaps, and driving
continuous improvement by comparing processes
and metrics against industry standards
• Contract lifecycle management, which is essential for
streamlining contract processes, ensuring compliance,
mitigating risks, and maximising value throughout
the contract's duration
• Resolution of commercial and contractual disputes
• ESG scoring which evaluates companies on
environmental, social, and governance factors to
assess sustainability and ethical impact, guiding
investment and operations. Suppliers failing to meet
expectations must submit a Corrective Action Plan
(CAP) aligned with IAG's Sustainability Strategy
and Vision
• Access to more fuel-efficient aircraft with lower
carbon emissions, reduced community noise,
improved local air quality through reduced NOx
(nitrogen oxide) emissions
• Role of major aircraft manufacturers supporting
airlines in the delivery of environmental targets.
• Supply chain Scope 3 emissions from suppliers’
manufacturing activities
• Innovation programmes
• Launch of Apex Procurement Digitalisation Programme,
which aims to develop and implement new tools and
technologies to improve our processes, ways of working
and support the function in delivering our objectives
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International Airlines Group | Annual Report and Accounts 2024
26
Challenges
Outcomes
• Delays in the delivery of aircraft and in maintenance,
repair and overhaul (MRO) activities on existing aircraft
and engines
• Design, manufacturing and engineering capacity and
impact of extended regulatory certification processes
in the US and EU
• Supply-side limits for new aircraft through inability of
aircraft and engine manufacturers to meet demand.
Although IAG is well positioned, there are potential impacts
from other airlines on lease renewals and limiting flexibility
in aircraft selection
• Supply-side limits for global spare engine availability
• Due diligence regarding compliance risks such as anti-
bribery, corruption and trade sanctions
• Ongoing assessments focus on driving sustainable
performance improvements throughout the supply chain,
achieving environmental and social targets for Scope 1, 2,
and 3 emissions
• Ensuring adherence to IAG's cybersecurity and security
requirements as part of comprehensive third-party
risk management
• Secured access to more fuel-efficient aircraft with lower
carbon emissions, reduced community noise and improved
air quality
• Engagement on long-term engine maintenance
arrangements with key engine suppliers mitigated the
impact of supply chain challenges on MRO operations
within the Group’s airlines. We worked closely with
suppliers to protect deliveries, spare availability and
replan fleets to cope with extended ground times
or delivery delays.
• Continued to secure access to new short-haul fleet with
firm orders and our options addressing the potential
inability of manufacturers to meet demands. We acquired
both new and used leased long-haul aircraft where
appropriate and confirmed option delivery positions
for later this decade
• A new 360-degree risk management solution with risk-
monitoring technologies will be implemented in 2025
to identify existing and future supplier risks, enabling a
proactive, collaborative approach to anticipate and mitigate
risks through targeted action plans
• Where necessary, mitigation plans are put in place for
suppliers identified as having potentially higher levels
of risk. Issues are flagged to the relevant risk owners
within the Group to take appropriate action
• A joint procurement partnership was created with another
airline to purchase the latest design of aircraft tyres to
optimise costs and improve product quality. These new
tyres have a longer lifespan, reducing waste from
replacement; they are lighter, burning less fuel and reducing
emissions; and they use fewer raw materials in production,
reducing environmental impact.
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International Airlines Group | Annual Report and Accounts 2024
27
Aer Lingus welcomes
new aircraft
IAG has become the launch
customer for the Airbus A321XLR
long-range narrow-bodied aircraft
with delivery of the first aircraft
to Iberia in October and two further
aircraft to Aer Lingus in December.
These new fuel-efficient aircraft
will allow IAG to operate new routes
and increase frequency in
key markets.
Shareholders, lenders and other financial stakeholders
Key metrics
Why they are important
This includes equity and credit
investors, credit lenders, research
analysts, credit rating agencies
and aircraft operating lessors.
Our financial stakeholders are looking
for a well-run business with a strong
balance sheet based on sustainable
demand for travel. This, along with
a competitive cost base that allows
our airlines to offer attractive fares,
will drive market-leading margins
and Return on Invested Capital greater
than the Group’s cost of capital, leading
to positive free cash flows and the
opportunity for sustainable dividends
as well as further capital distributions,
alongside continued investment in
the business.
Significant
shareholders at 31
December were:
• As the main providers of capital, this stakeholder
group enables IAG to invest in and grow the Group’s
businesses. Investors, particularly long-term
shareholders, share the risk of the business
• Strategy and business plan delivery requires: external
funding for the substantial amount of capital
expenditure required to replace or grow our fleet;
and efficient external capital to fund our operations
and invest in our asset base in a cost-effective manner.
• Their views are critical in supporting strategy
formulation, which drives operational and financial
performance to generate and optimise
sustainable returns
• Availability and access to external capital on
competitive terms influences the financial strength and
positioning of the Group and its operating companies
Qatar Airways
24.995%
Capital Group
5.001%
Credit ratings
Moody’s
Baa3 Stable
S&P Global
BBB-
positive
How we engaged
Key topics
• Active and frequent communication through open and transparent
dialogue to understand performance/concerns, in person or online
• Shareholders’ Meeting and four quarterly results briefings at which
shareholders, investors and equity and credit analysts could
interact with the management, and in the case of general meetings,
with directors
• An analyst and investor event dedicated to demonstrating key
strategic drivers of value, in this case highlighting the ambition to
improve British Airways’ operating margin from 10% to 15% by
2027. The event was hosted by British Airways’ management team
as well as colleagues from across the business and key IAG
personnel. A wide range of investors and analysts were invited,
including current and potential shareholders, and sell-side equity
analysts from across Europe
• Dedicated mailbox for institutional and individual shareholders
• Management attendance at investor conferences hosted by major
financial institutions
• Investor Relations organised and attended roadshows globally
to meet investors with diverse perspectives, with directors and/or
management depending on the focus. Roadshows were held
in London, Madrid, Paris, the US and Switzerland during 2024
• Investor Relations has ongoing dialogue with equity, credit and
ESG research analysts to understand investors’ views of the Group
• Group Treasury engages with credit analysts, global banks, debt
investors and credit rating agencies
• The Chairman and the Remuneration Committee Chair met with
some of our larger investors in one-to-one meetings
• Impacts of potential economic recession and geopolitical
issues on consumer demand, especially Europe
• Performance – operating results including unit revenue
and unit costs, capacity and traffic data, gross and
net debt, cash liquidity, free cash flow generation,
cash and credit facilities
• Recovery in volume of business customers, particularly
at British Airways
• Relative competitor performance, in particularly their
pricing and capacity strategies
• Strategic and operational issues and initiatives – Group
and operating company
• Funding – cash flows, sources, leverage, liquidity
• Capital spending and debt repayment commitments
• Capital allocation framework, including dividends
and additional cash returns to shareholders
• ESG performance, including climate change initiatives
• Long-term growth and financial targets, such as those
communicated at CMD
• Employee negotiations on pay, cost-of-living,
productivity, competitiveness and financial performance
• Levels of eligible ownership, which were at 62.1%
at 31 December 2024
• M&A, industry consolidation (Air Europa, TAP)
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Stakeholder engagement continued
International Airlines Group | Annual Report and Accounts 2024
28
Challenges
Outcomes
• Successfully communicating IAG's investment case to
drive wider share ownership and share price appreciation
against a backdrop of wider macroeconomic and
geopolitical uncertainty
• Building relationships with existing and new investors
to understand their priorities and to ensure support for
strategy and management proposals
• Funding mechanisms, including dividend policy decisions,
may not suit all shareholder or financial stakeholder profiles,
requiring a balancing of shareholder and financial
stakeholder views with the corporate interest
• Increased focus on climate change and diversity has
potential reputation impacts and requires consideration
of shareholder expectations
• IAG hosted a British Airways Insight Day at which
we highlighted the airline’s target to increase margins,
which is a key value driver of IAG’s overall margin
improvement strategy
• Feedback received from investors and analysts is regularly
shared with the Board and senior leaders. This included
discussion around customer demand, the supply of aircraft
and engines in the market, recognition of IAG’s ability to
generate free cash flow, its focus on the balance sheet and
its commitment to paying dividends and additional
shareholder returns. This feedback has been considered in
reporting and strategic discussions
• Meetings were held with investor governance and ESG
representatives, including members of the IAG
Sustainability team, in which our sustainability policies,
initiatives and targets were explained and discussed
• We use a customer relationship management system that
records engagement, tracks meetings, notes topics,
questions and discussions with an automatic feedback
collection mechanism based on defined questions.
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International Airlines Group | Annual Report and Accounts 2024
29
Government and regulators
Key metrics
Why they are important
Due to the nature of their business,
IAG and the operating airlines
engage with a wide range of
government and regulatory
stakeholders. These include
members of national parliaments,
ministers and officials of national
governments across multiple
departments (including transport,
trade, finance, tourism and
international affairs), MEPs
and other representatives of the
institutions of the European Union
(including at DG MOVE, and other
relevant directorates, as well as
permanent representatives of
individual member states in
Brussels). This wide stakeholder
body also encompasses civil
aviation regulators in the countries
in which our airlines are based
and the countries of destination.
We also engage with competition
authorities, including the
Competition and Markets Authority
in the UK and, for aviation alliances,
the Department of Transportation
in the US.
• We use both quantitative and
qualitative metrics in engagement
planning. Quantitative metrics include
the different types and number of
engagement events, range of policies
and seniority of engagement.
Qualitative appraisal includes
assessment of policy outcomes
and tracking the evolution of policy
dossiers to ensure that the
Government Affairs function
is targeted appropriately.
Quantitative metrics in 2024 included:
• 90 contacts held with stakeholders
in EU institutions
• 35 letters sent to new MEPs and
Commissioners
• Direct engagement with almost
200 policymakers and institutions
in Ireland, Spain and the UK
• 19 institutional visits to the
headquarters of British Airways,
Iberia and Vueling
• ‘Fuelling the change’ event at the
European Parliament organised with
Aer Lingus plus sponsorship of 10
events of Forum Europa in Brussels
with high-level policymakers
• Participation in 40 government-to-
government air services negotiations
with UK and Spanish authorities
• Government policies and decisions
impact many aspects of IAG’s business
across a wide range of areas including
transport, consumer rights, practical
operational issues, commercial practices
and the environment. We must comply
with relevant regulations, but seek to
engage responsibly to influence policy
developments to benefit our customers
and achieve our business goals
• Engagement with policymakers is
essential to ensure they understand our
plans and to encourage proportionate
outcomes to deliver our strategy on
sustainability and ensure we collectively
meet our global climate goals
• Our airlines are subject to regulation by
civil aviation regulators in the countries
of registration and those of destination,
requiring frequent engagement on safety,
security, consumer rights and a variety
of other policy and administrative issues
• Regular engagement around the world
is needed to manage market access
issues under international air services
agreements and secure the necessary
operating permits
How we engaged
Key topics
• The Government Affairs teams of IAG and its operating airlines engage directly
with stakeholders in their respective countries and with EU institutions in
Brussels. The IAG Government Affairs team coordinates these efforts for a
consistent approach
• We engage directly with policy, market and regulatory stakeholders on
questions of interest to convey IAG positions and contribute technical expertise
to discussions. This has included arranging visits to our airlines’ bases to enhance
understanding of operations and the impacts of policy proposals
• As well as direct contact, we engage through various international, regional
and local trade associations and general business organisations
• This engagement involves senior executives including the IAG CEO,
Management Committee members and senior executives from airline operating
companies where appropriate, mainly in the EU, Ireland, Spain and the UK
• IAG supports its policy positions with factual studies. In 2024, we participated
in A4E studies on Jet Fuel Tax Impacts and intermediary sector practices.
Also, Aer Lingus commissioned a report on SAF policies for Ireland, while
Iberia and Vueling updated their SAF report for the Spanish market and jointly
presented with energy producers Cepsa (now Moeve) and Biocirc
• In the international field, IAG joined air services talks wherever possible including
the EU-US Joint Committee on aviation and the International Civil Aviation
Organisation’s (ICAO) Air Services Negotiation Event (ICAN) to support
operating companies’ access to market
• Supply chain pressures and impacts of
the war in Ukraine and the Middle East,
and associated sanctions regimes
• Sustainability, particularly climate and
decarbonisation and all aspects of
environmental policy affecting aviation,
such as availability of and support for
investment in SAF and noise impacts
• Economic impacts of aviation, including
tax policy and economic regulation
• ATC issues and infrastructure regulation
including airspace modernisation, airport
charges and slot allocation policy
• Consumer rights including multimodality
and accessibility
• Diversity and inclusion for employment
as well as development of skills
• Safety, security and immigration rules
• International relations including air
service agreements and wet leasing,
and immigration policy
Strategic Report
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Stakeholder engagement continued
International Airlines Group | Annual Report and Accounts 2024
30
Challenges
Outcomes
• External factors such as air traffic
control (ATC) delays, supply chain
pressures or geopolitical events such
as the wars in Ukraine and the Middle
East have impacts on our business
• Political changes present the challenge
of new representatives and the need
to relaunch engagement plans and
raise awareness of the sector and IAG.
A good example of this is the new
EU institutional cycle
• Decarbonisation continues to be a
predominant area of interest for our
stakeholders. Our goal is to promote
decarbonisation while keeping
European aviation competitive globally.
• Consumer rights and customer service
are of increasing interest to our
stakeholders including aspects like
multimodality or accessibility
• IAG’s airlines regularly engage in
discussions with governments and
aviation authorities in their relevant
markets to respond to and mitigate
the risk that states use international
air service agreements to promote
the interests of their own airlines,
given their view that international
air services and national carriers are
strategic interests
• IAG’s continued engagement efforts have given policymakers a better
understanding of aviation's benefits to society and the economy, as well as
of airlines’ decarbonisation efforts. Our messages about SAF have been adopted,
and institutions recognise its importance. Some examples of this can be seen
in the Draghi Report (see Regulatory Environment section) or the agreement
between the main political parties in Spain to support SAF.
• Regular IAG opinion surveys on IAG’s reputation and on relevant policy of
UK members of parliament and at the European institutions showed increasing
familiarity, support for the use of SAF and appreciation of concerns over
European competitiveness.
• Regular engagement with opposition as well as governing politicians in the
UK helped ensure new ministers were familiar with key issues on taking office.
• Since the end of 2023, French law has required air traffic controllers to declare
their individual participation in a strike at least 48 hours in advance. This is an
important step to help the French air navigation service provider determine
numbers of striking employees and plan resources during strike action.
• EU Member States have become increasingly aware of the impact that the aviation
jet fuel tax has on regional connectivity and economic activity. At the end of the
year, the Hungarian Presidency presented a proposal advocating a 20-year
exemption for the aviation and maritime sectors.
• Regular engagement with the UK Department for Transport, at working level
and with ministers, aimed to ensure an appreciation of the causes of operational
disruption and to offer solutions that would provide additional resilience in the
system particularly at capacity-constrained airports.
• IAG made the case for strong regulation of monopoly providers of airport services
so that reasonable levels of charges are set. This engagement contributed to
a downward price path for Heathrow’s charges for 2025.
• Market access – IAG teams supported the operating companies to secure
the necessary market access through participation in international air service
agreement negotiations.
Strategic Report
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International Airlines Group | Annual Report and Accounts 2024
31
Jet fuel tax exemption
Taxation of aviation fuel in the EU is regulated under the Energy
Taxation Directive of 2003 which prohibits the taxation of
commercial aviation fuel except for commercial domestic flights
or by bilateral agreement between EU member states. As of 2024,
commercial aviation fuel is currently tax exempt under the
legislation of all member states of the EU. In late 2021, the
European Commission proposed a Review of the Energy
Taxation Directive (ETD) with a progressive tax on aviation
fuel, reaching €444 per tonne by 2033.
IAG contends that the revision of the current framework would
only have a negative impact on connectivity and so reduce the
social and economic benefits that aviation provides. Additional
costs through taxes would make the European sector less
competitive. Paying higher taxes would necessarily divert
funding from the industry’s own investment in emissions
reduction programmes and as such would not help to pursue
environmental objectives including reducing CO2 emissions.
Since the aviation tax proposal is restricted to the EU, it would
jeopardise connectivity to European destinations vis-a-vis
equivalent destinations in the EU neighbouring area.
To showcase the possible impact, A4E commissioned a study
from consultancy firm Steer. This analysed the impact of the
tax on three areas: Catalonia, Lisbon and Rome. In the first
of these - one of IAG’s key home markets - the report showed
a negative impact of €7.7 billion on GDP and the loss of over
50,000 jobs. This study was presented to the media in
Barcelona in 2024 and shared with policymakers in a joint
news conference by A4E and Spanish airline association, ALA.
IAG also engaged directly with relevant stakeholders at
EU institutions and at a national level in Spain and Ireland.
As this is a technically complex topic, we also promoted
simpler messages through our trade associations to ensure
that the negative consequences of the revision could be easily
understood by non-aviation experts.
As a result of the inputs from the airline industry, the EU will
exempt aviation from its overall energy taxation policy plans.
Nicholas Cadbury, Chief Financial and
Sustainability Officer, reviews a year
that saw our strategy and
transformation programme deliver
strong results and returns to our
shareholders.
We have delivered strong financial results
in 2024 as we focused on our strategy
and continued to execute our
transformation programme. This has
helped us to achieve the financial
ambitions that we set out in 2023:
specifically, good earnings growth
and world-class margins and returns.
IAG’s business model of disciplined
capital allocation is also designed
to generate strong cash flows.
We invest that cash in our customers,
in strengthening the balance sheet
and then rewarding our investors.
Delivering world-class margins
and returns
During the year we achieved an
operating margin of 13.8%, a significant
increase on the previous year and
towards the higher end of our ambition
of 12%-15%. This is based on the Group’s
strategic advantage of strong positions
and strong brands in hubs that serve
some of the world’s largest markets
across the Atlantic, and in Europe.
All of our airlines are capable of margins
that are world-leading. British Airways
made very good progress during the
year to achieve a 14.2% margin, on target
for its 15% objective, whilst Iberia (13.6%)
and Vueling (12.3%) both produced
margins in our ambition range. Aer
Lingus is recovering strongly following
the industrial action in the peak summer
period and is also targeting a result
within the Group range.
We have delivered a 9% increase in
revenue in the year. We grew capacity
by 6%, through a combination of aircraft
deliveries, as we build back our fleet,
high load factors and increased utilisation.
We are benefiting structurally from
increased customer demand across the
North Atlantic, particularly for our premium
offering, increasing traffic across the South
Atlantic and growing leisure demand.
This, together with the investments in our
customer offering, is supporting increased
load factors and strong yield growth.
Turning to costs, we are investing for the
long term, particularly in our propositions
across the brands, as well as in resilience in
our operations and IT. The transformation
programme is helping to offset cost
inflation, through improvements in
productivity, procurement and innovation,
so non-fuel unit costs increased by only
2.6% in the year. The unit cost of fuel was
significantly lower than in 2023.
In our other businesses, IAG Cargo benefited
from the increase in our airlines’ capacity,
growth in internet retailing and geopolitical
disruption in the Red Sea impacting supply
chains and shipping. IAG Loyalty had a
record year with operating profit of €495
million, with particularly good growth in
our non-airline partners such as American
Express and Barclays. We expect to
deliver good earnings growth over the
next few years, particularly as we integrate
BA Holidays into the IAG Loyalty platform.
Disciplined approach to capital
allocation and shareholder returns
We have a disciplined and balanced
approach to capital allocation, one of
the key aspects of our business model.
Our margin performance supports high
operating cash generation. In 2024 we
generated €6,372 million of cash from
operating activities, leading to €3,556
million of free cash flow after investing
€2,816 million of capital.
Our first priority is a strong balance sheet.
In 2023 we set the target to be below 1.8x
net leverage through the cycle. In 2024 we
ended the year with leverage at 1.1x, down
from 1.7x at the end of 2023 and 3.1x at the
end of 2022. We are investment grade
with Moody’s and S&P, both of which
upgraded IAG during the year.
We are continuing to reinforce our
financial strength. In early 2025 we
completed a liability management
exercise to reduce our gross debt by
buying back €577 million across our 2027
and 2029 IAG bonds. Gross debt will
reduce further as an IAG €500 million
bond matures in March 2025 and as
we increase the proportion of
unencumbered aircraft. We are targeting
to reduce gross leverage over time.
(2.5x at 31 December 2024).
Our second capital allocation priority
is to invest in the business. In 2024
we invested €781 million of capital
expenditure in our customer propositions
(excluding fleet-related investment).
We are upgrading aircraft interiors with
new products such as the Club Suite
at British Airways and upgraded lounges
at Aer Lingus, British Airways and Iberia.
We are also investing in our IT: in
resilience as well as in developing
customer-facing applications. We spent
€2,035 million on fleet in 2024, with
19 new aircraft delivered. We planned
to invest more but are constrained
by delays at the aircraft manufacturers.
We are committed to paying a return to
our shareholders. Firstly, we want to pay
a sustainable dividend to our shareholders
through the cycle. We announced an
interim dividend of €0.03 per share at
our half-year results last August and have
proposed a final dividend of €0.06 per
share, bringing the total dividend for the
year to €0.09 per share, representing
€435 million. We are also committed to
returning additional cash to shareholders
if no inorganic opportunities exist and
with consideration to future requirements,
for example significant forthcoming fleet
deliveries. We will do this when net leverage
is below 1.2x to 1.5x. We believe that at the
current valuation of the Company the best
way to do this is by a share buyback.
In November 2024 we announced a €350
million share buyback and in February
2025 our intention to return up to €1,000
million of excess capital to shareholders in
up to 12 months, driven by our significant
cash flow generation.
We will continue to focus on maintaining
our world-class margins and returns,
disciplined capital allocation and delivering
sustainable returns to shareholders.
Nicholas Cadbury
Chief Financial and Sustainability Officer
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Financial overview
International Airlines Group | Annual Report and Accounts 2024
32
Nicholas Cadbury
Chief Financial and Sustainability Officer
Delivering strong
results
Disciplined
capital allocation
IAG has a disciplined approach to capital allocation
which is designed to maximise shareholder value creation
over the long term. It ensures that we balance the needs
of all of our stakeholders: our customers, our employees
and our investors.
Maintain
a strong
balance sheet
Invest in
rebuilding
our fleet
Improve
customer
experience,
resilience, digital
and sustainability
Commitment
to sustainable
dividend levels
Excess cash
returned to
shareholders
if no inorganic
opportunities exist
A strong financial
foundation is essential
to any business.
As a relatively more
cyclical business, this
is our first priority.
Having a modern,
efficient fleet of aircraft
is a core component
of our customer
proposition and a
driver of operational
efficiency.
Our strong brands
depend on having an
attractive and resilient
competitor proposition.
We are also investing
in the latest technology
and Sustainable
Aviation Fuel.
We are committed
to rewarding our
shareholders. Offering
a sustainable dividend
delivers a regular,
reliable return through
the cycle.
We will return excess
cash to shareholders
if no other inorganic
opportunities exist
and with consideration
to future requirements,
such as significant
forthcoming
fleet deliveries.
Maintain net
debt/EBITDA
< 1.8x across
the cycle
Invest to
grow capacity
2%-4% per annum1
Drive margin
performance
across the Group
in the 12% to
15% range
Sustainable
ordinary
dividend payable
through the cycle
Distribute excess
cash below net
leverage of
1.2x to 1.5x
1.1x at
31 December 2024;
Investment grade
19 new aircraft
in 2024
13.8%
operating margin
Total ordinary
dividend
FY2024 €435 million
Share buyback
2024 (€350 million)
and
2025 (€1 billion)
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International Airlines Group | Annual Report and Accounts 2024
33
1
Medium term per annum growth, dependent on aircraft deliveries
IAG capacity
In 2024, passenger capacity operated, measured in available
seat kilometres (ASKs), rose by 6.2% versus 2023.
Capacity operated by region
Year to
31 December 2024
Proportion
of total
ASKs 2024
ASKs
higher/
(lower)
v2023
Passenger
load factor
(%)
Higher/
(lower)
v2023
North Atlantic
30.7 %
2.8 %
85.1
2.2 pts
Latin America and
Caribbean
19.5 %
12.2 %
88.3
0.7 pts
Europe
25.8 %
5.8 %
86.6
0.7 pts
Domestic
(Spain and UK)
8.0 %
5.8 %
89.9
0.4 pts
Africa, Middle East
and South Asia
11.9 %
1.4 %
83.9
0.6 pts
Asia Pacific
4.1 %
27.5 %
88.9
0.5 pts
Total network
100.0 %
6.2 %
86.5
1.2 pts
Capacity operated by airline
Year to
31 December 2024
ASKs
higher/
(lower)
v2023
Passenger
load factor
(%)
Higher/
(lower)
v2023
Aer Lingus
3.5 %
80.5
(0.1)pts
British Airways
4.4 %
85.2
1.6 pts
Iberia
13.3 %
87.9
0.7 pts
LEVEL
17.8 %
95.2
1.8 pts
Vueling
0.9 %
92.2
0.8 pts
Group
6.2 %
86.5
1.2 pts
North Atlantic
The Group’s airlines launched new routes and increased
services to the North Atlantic region, one of the Group’s core
profit pools, with capacity 2.8% higher than in 2023. Aer Lingus
started flights to Las Vegas and Denver, and resumed its route
to Minneapolis. British Airways further developed its US
network with the consolidation of its Cincinnati service and
increased frequencies to San Diego. Iberia increased the
frequency of its flights to Los Angeles. It was also the first
airline in the world to receive an Airbus A321XLR, with seven
additional aircraft expected in 2025, all of them to be deployed
to the US, particularly Boston and Washington (DC). LEVEL
launched a year-round direct service to Miami and increased
the frequency of flights to Los Angeles and Boston to daily.
Passenger load factor for the region was up 2.2 points versus
2023 to 85.1%.
Latin America and Caribbean (LACAR)
The strong growth in IAG’s Latin America and Caribbean profit
pool was driven by the continued demand for travel to the
major cities in the region, with a structural increase in demand
for travel to and from Europe from both travellers visiting
friends and family and leisure and corporate travel. British
Airways consolidated its Barbados service at London
Heathrow, allowing premium capacity to grow from the winter.
Iberia increased its flight frequency to Buenos Aires, São Paulo,
Santiago de Chile and Santo Domingo, while also investing in
more flights to markets such as Puerto Rico and Rio de Janeiro.
IAG’s capacity in LACAR grew 12.2% versus 2023 and the
passenger load factor for the region of 88.3% was up 0.7 points
versus 2023.
Europe
The Group’s capacity in Europe was 5.8% higher than in 2023,
boosted by the demand for leisure travel and the extension
of some operating seasons outside of the core summer peak.
Aer Lingus began services to Seville and Malta. British Airways
launched flights to Izmir and Tromsø, while Vueling added
services to London Heathrow and Istanbul, as well as seasonal
flights to Comiso (Italy), Lulea (Sweden) and Ivalo (Finland).
Iberia started flights from Madrid to Innsbruck and Salzburg
and increased frequency to Rome, Brussels and Zurich.
Passenger load factor for the region was up 0.7 points versus
2023 to 86.6%.
Domestic
Capacity and passenger numbers in IAG’s Domestic markets,
which are predominantly within mainland Spain and to the
Canary and Balearic Islands, increased as a result of targeted
developments by Vueling at its Barcelona hub. Iberia also
continued to reinforce its offering with increased flights to
Palma, Lanzarote and Fuerteventura. Capacity was 5.8% higher
than 2023, and passenger load factor, at 89.9%, was up 0.4
points versus the previous year.
Africa, Middle East and South Asia (AMESA)
Capacity to this region was up 1.4% on 2023. Aer Lingus started
flying to Marrakesh, while British Airways launched Jeddah and
increased flight frequency to Riyadh. The Saudi Arabia market
continued to strengthen due to inward investment programmes
and visa changes. The continued conflicts in the Middle East
drove changes to short-haul operations to Cairo, Amman
and Tel Aviv, with Tel Aviv temporarily suspended until 2025.
Passenger load factor for the region was up 0.6 points versus
2023 to 83.9%.
Asia Pacific
During 2024, Chinese carriers continued to grow capacity
into the UK and Europe. This presented a very challenging
environment, coupled with the ban on flights over Russian
airspace. Despite this backdrop, certain destinations, including
Bangkok, Singapore and Tokyo, performed well. British
Airways’ route to Beijing was suspended, although the airline
launched flights to Bangkok from London Gatwick and
increased the frequency of its flights to Tokyo. Iberia re-
launched its route to Tokyo in October. The net increases
during 2024 led to capacity 27.5% higher than 2023, with the
passenger load factor for the region up 0.5 points versus 2023
to 88.9%.
Basis of preparation
In its assessment of going concern over the period of at least
12 months from the date of approval of this report (the ‘going
concern period’), the Board has considered the impact of
a severe but plausible downside scenario and sensitivities,
together with aircraft financing requirements. Consequently
the directors have a reasonable expectation that the Group
has sufficient liquidity to continue in operational existence over
the going concern period, and hence continue to adopt the
going concern basis.
Summary
The Group’s operating profit for the year increased by €776
million, or 22.1%, versus 2023, driven by higher passenger unit
revenues and lower fuel unit costs, partially offset by an
increase in non-fuel unit costs, as discussed further below.
The increase in operating profit was despite adverse foreign
exchange impacts of €63 million and an exceptional charge
for restructuring of €160 million.
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International Airlines Group | Annual Report and Accounts 2024
34
Profit for the year
Statutory results
€ million
2024
2023
Higher/
(lower)
vly
Operating profit
4,283
3,507
776
Profit before tax
3,563
3,056
507
Profit after tax
2,732
2,655
77
Summary of exceptional items
The Group uses Alternative performance measures (APMs)
to analyse the underlying results of the business excluding
exceptional items, which are those that in management’s view
need to be separately disclosed by virtue of their size or
incidence in understanding the entity’s financial performance.
During 2024 the Group recorded exceptional items relating
to employee restructuring in Iberia’s ground handling
subsidiary, the termination of the Air Europa purchase
agreement, and a net credit relating to changes in tax
legislation in Spain, the main impact of which was changing
the rate at which tax losses can be utilised from 2016 onwards.
There were no exceptional items in 2023.
A summary of the exceptional items relating to 2024 is given
below, with more detail in the Alternative performance
measures section.
Income statement line
Exceptional item
description
(Charge)/credit to the
Income statement
€ million
2024
2023
Employee costs
Iberia restructuring
costs
(160)
–
Other non-operating
credits
Termination of Air
Europa agreement
(50)
–
Tax
Tax on exceptional
items above
40
–
Tax
Changes to Spanish
tax legislation
100
–
The Operating profit before exceptional items for 2024
of €4,443 million was €936 million better than the Operating
profit before exceptional items of €3,507 million for 2023,
driven by the increased capacity and higher revenues, net of
higher operating costs, as explained further below. The Profit
after tax and before exceptional items was €2,802 million,
€147 million higher than the 2023 profit of €2,655 million.
Alternative performance measures
(before exceptional items)
€ million
2024
2023
Higher/
(lower)
vly
Operating profit
4,443
3,507
936
Profit before tax
3,773
3,056
717
Profit after tax
2,802
2,655
147
Revenue
€ million
2024
Higher/
(lower)
vly (%)
Higher/
(lower)
vly
Passenger revenue
28,274
9.5 %
2,464
Cargo revenue
1,234
6.7 %
78
Other revenue
2,592
4.2 %
105
Total revenue
32,100
9.0 %
2,647
Total revenue increased €2,647 million versus 2023, after
favourable foreign exchange rate movements of €263 million,
mainly due to the translation of British Airways’ and IAG
Loyalty’s results from pound sterling into euro, which resulted
in a favourable variance of €505 million versus 2023, offset
by adverse transaction foreign exchange impacts on revenue
of €242 million.
Passenger revenue
Year to
31 December 2024
ASKs
higher/(lower)
v2023
Passenger
revenue per ASK
higher/(lower)
v20231
North Atlantic
2.8 %
6.2 %
Latin America and Caribbean
12.2 %
(2.2) %
Europe
5.8 %
2.6 %
Domestic (Spain and UK)
5.8 %
(0.3) %
Africa, Middle East and South
Asia
1.4 %
(0.5) %
Asia Pacific
27.5 %
(12.1) %
Total network
6.2 %
3.1 %
1
Passenger revenue per ASK for the total network is based on total
passenger revenue divided by ASKs. For the analysis by region,
passenger revenue excludes certain items that are not directly
assigned at a route level, including joint business payments or
receipts, foreign exchange hedging gains or losses, EC261 and UK261
compensation, and adjustments to assumptions for unused tickets.
The increase in Passenger revenue of €2,464 million, or 9.5%,
was ahead of the increase in passenger capacity of 6.2%,
driven by higher yields and higher load factors than in 2023.
The growth in Passenger revenue was linked to the reopening
of markets and strong leisure demand, together with increases
in ticket prices to reflect inflation. The recovery in corporate
travel was slower than that of leisure travel, with the Group’s
premium leisure segment continuing to perform strongly.
The passenger load factor for the year of 86.5% was 1.2 points
higher than in 2023. Passenger yields, measured as passenger
revenue per revenue passenger kilometre (RPK) were
1.7% higher than in 2023. The resulting passenger unit revenue
(passenger revenue per ASK) for the year was 3.1% higher
than in 2023.
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35
Cargo revenue
Cargo revenue, at €1,234 million, was 6.7% higher than in 2023.
Cargo volumes, measured in cargo tonne kilometres (CTKs),
were 12.6% higher than the previous year. Cargo yields,
measured as cargo revenue per cargo tonne kilometre, were
5.2% lower than in 2023, resulting from the substantial growth
in global cargo capacity across the industry in 2024 and the
inflated market yields in the first half of 2023, which were
impacted by the residual effects of supply chain disruptions
after the pandemic. However, 2024 benefited from Red Sea
disruption, which drove sea-to-air conversion and strong
market demand and higher yields from South Asia, India and
the Middle East, particularly from the second quarter onwards.
Other revenue
Overall for the year, Other revenue was up 4.2% versus 2023
to €2,592 million.
One of the Group’s strategic imperatives is to drive earnings
growth through asset-light businesses, with the growth of IAG
Loyalty a particular priority. The impact of the growth in IAG
Loyalty contributes both to the airlines’ Passenger revenue and
to Other revenue, through both the issuance and redemption
of its loyalty currency, Avios. IAG Loyalty delivered another
strong year of growth in the number of members collecting
Avios, including through its partnership with American Express.
IAG Loyalty also now includes BA Holidays, which benefited
from a continued increase in flying activity and bookings, with
Group holiday and hotel services revenues up by €52 million
to €990 million.
Iberia’s Maintenance, Repair and Overhaul (MRO) business saw
increased engine maintenance activity for third-party airlines,
with revenues from maintenance and overhaul services up €137
million to €820 million. Revenue from Iberia’s ground handling
business, at €159 million, was €36 million lower than 2023 as
a result of the Iberia losing third-party handling contracts at
eight airports in 2023. Other revenue was also impacted by
the cessation of a contract relating to travel for retired Spanish
citizens, which only had a small impact on operating profit.
Operating costs
Total operating expenditure rose from €25,946 million in 2023
to €27,817 million in 2024, linked to the higher volume of flights
and passenger numbers and after adverse foreign currency
movements of €326 million, of which €432 million were due
to the translation of the operating costs of British Airways
and IAG Loyalty from pound sterling into euros, offset by
favourable transaction impacts of €106 million.
Employee costs
€ million
2024
Higher/
(lower)
vly (%)
Higher/
(lower)
vly
Employee costs, € million
6,356
17.2 %
933
Employee costs per ASK,
€ cents1
1.81
7.5 %
1
Employee costs per ASK calculated before exceptional item related
to Iberia restructuring.
The rise in Employee costs of €933 million, or 17.2%, versus 2023
reflected the increase in the Group’s capacity and the related
increase in employee numbers, together with investments in
the airlines’ operations, including at British Airways’ London hub.
The strong performance in 2024 also led to higher payments to
colleagues in the form of bonuses and other performance-related
payments. Average headcount for the year was 73,498, up
3,736 or 5.4% versus 2023. The Group had agreements in place
with substantially all employee groups at the end of 2024,
including new agreements reached with Aer Lingus pilots in July,
Iberia pilots in August and Vueling pilots in November.
On a unit basis per ASK, Employee costs were up 7.5% versus 2023.
Fuel costs and emissions charges
€ million
2024
Higher/
(lower)
vly (%)
Higher/
(lower)
vly
Fuel costs and emissions
charges
7,608
0.7 %
51
Fuel costs and emissions
charges per ASK, € cents
2.22
(5.2) %
Fuel costs and emissions charges were up €51 million versus
2023, with increased capacity and higher costs relating to
emissions trading schemes (ETSs) offset by reduced average
commodity fuel prices, leading to fuel costs and emissions
charges up only 0.7% versus 2023 and down 5.2% on a unit basis.
Effective jet fuel prices net of hedging were down around 8%
compared with 2023, driven particularly by the reduction seen in
the final quarter of 2024. Foreign exchange movements accounted
for €78 million of the year-on-year increase, due to the translation
exchange effects between the pound sterling and euro, partially
offset by a small favourable impact from transaction foreign
exchange net of hedging. The cost of complying with ETS, mainly
in the EU and UK, was €301 million, up from €212 million in 2023,
reflecting both the higher level of capacity flown, market prices
under such schemes, and the reduction in free allowances issued
across the EU and UK.
Jet fuel price trend ($ per metric tonne)
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
Mar 24
Jun 24
Sep 24
Dec 24
0
200
400
600
800
1,000
1,200
1,400
1,600
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International Airlines Group | Annual Report and Accounts 2024
36
Fuel hedging
The Group seeks to reduce the impact of volatile commodity
prices by hedging prices in advance. The Group’s current fuel
hedging policy was approved by the Board in May 2021 (and
has been regularly reviewed for appropriateness by the Audit
and Compliance Committee subsequently) and is designed
to provide flexibility to respond to both significant unexpected
reductions in travel demand or capacity and/or material or
sudden changes in jet fuel prices. The policy allows for
differentiation within the Group, to match the nature of each
operating company, and the use of call options for a proportion
of the hedging undertaken. The policy operates on a two-year
rolling basis, with hedging of up to 60% of anticipated
requirements in the first 12 months and up to 30% in the
following 12 months, and with flexibility for low-cost airlines
within the Group to adopt hedging up to 75% in the first 12
months. For all Group airlines, hedging between 25 and 36
months ahead is only undertaken in exceptional circumstances.
Fuel consumption
The Group continued to benefit from reduced fuel consumption
associated with the investment in new fleet, with 19 newer-
generation and more fuel-efficient aircraft delivered and
brought into service in the year. Increased passenger load
factors versus 2023 also contributed to reduced carbon
intensity, measured as grammes of CO2 per passenger
kilometre, which was down 3.0% versus 2023, with the
reduction also driven by higher use of Sustainable Aviation
Fuel (SAF).
Supplier costs
€ million
2024
Higher/
(lower)
vly (%)
Higher/
(lower)
vly
Handling, catering and
other operating costs
4,135
7.4 %
286
Landing fees and en-route
charges
2,405
4.2 %
97
Engineering and other
aircraft costs
2,729
8.8 %
220
Property, IT and other costs
1,120
5.9 %
62
Selling costs
1,082
(6.3) %
(73)
Currency differences
32
23.1 %
6
Total Supplier costs
11,503
5.5 %
598
Supplier cost per ASK,
€ cents
3.35
(0.7) %
Total Supplier costs rose by €598 million, or 5.5%, to €11,503
million, slightly below the increase in capacity. Supplier costs
benefited from the Group’s transformation initiatives, which
partially offset inflationary pressures, and also reflect customer
experience and IT investments.
Total foreign currency impacts on Supplier costs, including
currency differences, were €129 million adverse versus 2023,
including an adverse impact of €200 million related to
translating British Airways’ and IAG Loyalty’s supplier costs
from pound sterling into euro, partially offset by a favourable
transaction foreign exchange impact of €71 million.
On a unit basis per ASK, Supplier costs were down 0.7%
versus 2023.
Ownership costs
Ownership costs include Depreciation, amortisation and
impairment of tangible and intangible assets, including right-
of-use assets, and the Net gain on sale of property, plant and
equipment.
€ million
2024
Higher/
(lower)
vly (%)
Higher/
(lower)
vly
Depreciation, amortisation
and impairment
2,364
14.6 %
301
Net gain on sale of
property, plant and
equipment
(14)
nm
12
Ownership costs
2,350
14.0 %
289
Ownership costs per ASK,
€ cents
0.68
7.3 %
The increase in ownership costs versus 2023 is mainly driven
by the increase in the Group’s fleet of aircraft, linked to the
increased capacity and the investments in new, more fuel-
efficient aircraft. In addition, costs increased due to the
depreciation related to aircraft maintenance and investments
to improve the customer experience, such as new business
cabin seats, digital offerings and lounges.The Net gain on sale
of property, plant and equipment was €14 million, reflecting
the disposal of aircraft withdrawn from service and related
spare parts.
On a unit basis per ASK, Ownership costs were up 7.3%
versus 2023.
Aircraft fleet
In 2024, the in-service fleet increased by 19 aircraft: 30 aircraft
entered service and 11 aircraft were retired. The aircraft entering
service were the 19 new aircraft deliveries from Airbus and
Boeing explained in the Capital expenditure section below,
together with four used aircraft that were delivered in 2023
but did not start flying for the Group until 2024, and a further
seven used aircraft leased directly from aircraft lessors.
Number of fleet
Number of fleet in-service
2024
2023
Higher/
(lower)
vly
Short-haul
396
389
1.8 %
Long-haul
205
193
6.2 %
601
582
3.3 %
In addition to the in-service fleet, there were a further 11 aircraft
not in service, made up of three aircraft held by the Group
pending disposal or lease return and eight Airbus A320ceo
aircraft for Vueling, which were delivered in 2024 but not yet
in service by 31 December 2024.
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37
Exchange rate impact
Exchange rate impacts are calculated by retranslating current
year results at prior year exchange rates. The reported
revenues and expenditures are impacted by the translation
of currencies other than euro to the Group’s reporting currency
of euro: primarily pound sterling related to British Airways and
IAG Loyalty. From a transaction perspective, the Group’s
performance is impacted by the fluctuation of exchange rates,
primarily exposure to the pound sterling, euro and US dollar.
The Group typically generates a surplus in most currencies in
which it does business, except the US dollar, for which capital
expenditure, debt repayments and fuel purchases typically
create a deficit which is managed and partially hedged.
The Group hedges its economic exposure from transacting
in foreign currencies but does not hedge the translation impact
of reporting in euro.
Overall, in 2024 the Group operating profit before exceptional
items was reduced by €63 million due to adverse exchange
rate impacts.
Exchange rate impact before exceptional items
€ million
Favourable/(adverse)
2024
Translation
impact
Transaction
impact
Total
exchange
impact
Total exchange impact on
revenue
505
(242)
263
Total exchange impact on
operating expenditures
(432)
106
(326)
Total exchange impact on
operating profit
73
(136)
(63)
€ million
Favourable/(adverse)
2023
Translation
impact
Transaction
impact
Total
exchange
impact
Total exchange impact on
revenue
(379)
(111)
(490)
Total exchange impact on
operating expenditures
351
57
408
Total exchange impact on
operating profit
(28)
(54)
(82)
The exchange rates of the Group were as follows:
2024
2023
Higher/
(lower)
vly
Translation - Balance sheet
£ to €
1.21
1.16
4.3 %
Translation - Income
statement (weighted average)
£ to €
1.18
1.15
2.6 %
Transaction (weighted
average)
£ to €
1.18
1.15
2.6 %
€ to $
1.09
1.09
– %
£ to $
1.28
1.26
1.6 %
Total net non-operating costs
Total net non-operating costs for the year were €720 million,
versus €451 million in 2023.
Finance costs of €917 million were €196 million lower than
in 2023, due to early debt repayments made in the second half
of 2023. Finance income at €404 million was up slightly from
€386 million in 2023, with higher average interest rates
offsetting lower average cash balances. The Net change in the
fair value of financial instruments of €237 million reflects the
increase in the fair value of IAG’s €825 million convertible bond
maturing in 2028, which increased in line with the Group’s
strong share price performance during the year. Net currency
retranslation resulted in a charge of €127 million in 2024 versus
a credit of €176 million in 2023, principally reflecting the
strengthening of the US dollar in 2024 versus a weakening in
2023. Other non-operating credits of €94 million in 2024 (2023:
credit of €8 million) mainly represent net gains or losses on
derivative contracts for which hedge accounting is not applied.
Tax
The tax charge on the Profit for the year was €831 million
(2023: tax charge of €401 million), and the effective tax rate
was 23.3% (2023: 13.1%). The effective tax rate in 2023 was
reduced by the recognition of prior year tax losses, notably
in the Group’s Spanish subsidiaries.
The substantial majority of the Group’s activities are taxed
where the main operations are based: in the UK, Spain and
Ireland, which had statutory corporation tax rates of 25%, 25%
and 12.5% respectively for 2024. The expected effective tax
rate for the Group is determined by applying the relevant
corporation tax rate to the profits or losses of each jurisdiction.
The geographical distribution of profits and losses in the Group
results in the expected tax rate being 24.5% for the year to 31
December 2024. The difference between the actual effective
tax rate of 23.3% and the expected tax rate of 24.5% is primarily
due to the impact of changes in Spanish tax legislation,
outlined below.
The Profit after tax for the year was €2,732 million (2023:
€2,655 million).
The Group is monitoring the OECD’s proposed two-pillar solution
to address the tax challenges arising from the digitalisation of the
economy. This reform to the international tax system is designed
to ensure that multinational enterprises with consolidated
worldwide annual turnover exceeding €750 million will be subject
to a minimum 15% effective tax rate, and also proposes to address
the geographical allocation of profits for the purposes of taxation.
On 21 December 2024, the Spanish government enacted Law
7/2024 to implement the EU Minimum Tax Directive with effect
from 1 January 2024.
For 2024, the predominant jurisdiction in which the Group
operates with an effective tax rate of less than 15% was Ireland
through Aer Lingus. In 2024 Aer Lingus recorded a current
tax expense of €2 million relating to Pillar Two.
Changes in Spanish tax legislation
In 2024 the Group was impacted by changes in tax legislation
in Spain, principally related to the pace at which prior year tax
losses could be utilised from 2016 onwards. On 18 January 2024,
the Tribunal Constitucional (Constitutional Court) in Spain issued
a ruling that the amendments to corporate income tax arising
from the introduction of Royal Decree-Law (RDL) 3/2016 were
unconstitutional and accordingly revoked. On 20 December
2024, the Spanish government enacted Law 7/2024, which
with effect from 1 January 2024 onwards, implements the tax
measures that had been previously declared unconstitutional
by the Tribunal Constitucional. The Group recognised a net
exceptional tax credit of €100 million in 2024, being a net credit
of €135 million relating to RDL 3/2016 and a tax charge of
€35 million relating to Law 7/2024.
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International Airlines Group | Annual Report and Accounts 2024
38
IAG Loyalty VAT
As previously disclosed, since 2022 and for periods commencing
March 2018, HMRC in the UK has been considering the
appropriate VAT accounting to be applied by IAG Loyalty, and
the validity of a historical ruling (‘the Ruling’) issued by HMRC
to the Group. On 29 October 2024, HMRC issued a decision
asserting that VAT is payable at the standard rate of 20% on
the issuance of Avios as opposed to the historical approach of
accounting for VAT depending on the nature of the redemption
products for which Avios are redeemed, for which the vast
majority are flights that are zero-rated.
At 31 December 2024, HMRC has issued IAG Loyalty with VAT
assessments amounting to €673 million. Of these assessed
amounts, the Group expects €260 million to be recoverable as
input VAT for certain subsidiaries of the Group, predominantly
by British Airways. During the course of 2024, in addition to
the aforementioned assessed amounts and in order to avoid
incurring potential interest and penalties, the Group
commenced paying to HMRC, without admission of liability,
VAT on the issuance of Avios. This has resulted in payments,
that the Group does not consider it can recover from its
partners, totalling €88 million having been made in the year to
31 December 2024 and a corresponding receivable recognised
in the Balance sheet.
The Group has reviewed HMRC’s decision with its legal and
tax advisers and strongly disagrees with HMRC’s decision.
The Group considers that accounting for VAT depending
on the nature of the redemption remains appropriate, and that
the Group has a legitimate expectation that it should have been
able to rely upon the Ruling.
In order to appeal the case to the First-tier Tribunal (Tax),
subsequent to 31 December 2024 and prior to the date of this
report, the Group paid to HMRC, without admission of liability,
the total of the aforementioned VAT of €673 million that it had
not previously paid. These amounts will be recoverable, in part
or in full, should the Group be successful through litigation
in the case.
The directors are satisfied that it is not probable that an
adverse outcome will eventuate, and accordingly, the Group
does not consider it appropriate to record any provision
for this matter at 31 December 2024.
Further detail on tax matters, including IAG Loyalty and the
changes in Spanish tax legislation, can be found in note 10
to the consolidated financial statements.
Operating profit performance of airline operating companies
Aer Lingus
€ million
British Airways1
£ million
Iberia2
€ million
Vueling
€ million
Statutory
2024
Higher/
(lower)
vly
2024
Higher/
(lower)
vly
2024
Higher/
(lower)
vly
2024
Higher/
(lower)
vly
Passenger revenue
2,304
95
13,466
798
5,862
600
3,244
63
Cargo revenue
55
–
789
32
305
30
–
–
Other revenue
17
7
153
12
1,375
(46)
17
–
Total revenue
2,376
102
14,408
842
7,542
584
3,261
63
Fuel costs and emissions charges
638
(1)
3,676
(149)
1,611
115
895
(12)
Employee costs
514
43
2,871
312
1,618
334
427
28
Supplier costs
855
66
4,679
(150)
2,985
158
1,260
20
Ownership costs3
164
14
1,134
125
461
50
279
23
Operating profit/(loss)
205
(20)
2,048
704
867
(73)
400
4
Operating margin
8.6%
(1.3) pts
14.2%
4.3 pts
11.5% (2.0) pts
12.3%
(0.1) pts
Alternative performance measures4
Passenger revenue
2,304
95
13,466
798
5,862
600
3,244
63
Cargo revenue
55
–
789
32
305
30
–
–
Other revenue
17
7
153
12
1,375
(46)
17
–
Total revenue before exceptional items
2,376
102
14,408
842
7,542
584
3,261
63
Fuel costs and emissions charges
638
(1)
3,676
(149)
1,611
115
895
(12)
Employee costs
514
43
2,871
312
1,458
174
427
28
Supplier costs
855
66
4,679
(150)
2,985
158
1,260
20
Ownership costs3
164
14
1,134
125
461
50
279
23
Operating profit before exceptional items
205
(20)
2,048
704
1,027
87
400
4
Operating margin before exceptional items
8.6%
(1.3) pts
14.2%
4.3 pts
13.6%
0.1 pts
12.3%
(0.1) pts
1
During the year to 31 December 2024, the Group changed its internal organisation, resulting in BA Holidays being transferred from British Airways
to IAG Loyalty. Accordingly, the Group has restated its previously reported segmental information for the year to 31 December 2023. See note 5
to the consolidated financial statements.
2 The Iberia numbers in the table above are presented on the same basis as in note 5 to the consolidated financial statements and exclude LEVEL Spain.
3 Ownership costs reflects Depreciation, amortisation and impairment, and the Net (gain)/loss on the sale of property, plant and equipment.
4 Further detail is provided in the Alternative performance measures section.
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International Airlines Group | Annual Report and Accounts 2024
39
Review by operating company
The main driver of the Group’s increase in operating profit
for 2024 was British Airways, which achieved an increase
in operating profit of £704 million to £2,048 million
(€2,422 million). Iberia and Vueling were able to maintain
the strong margins each achieved in 2023, with Iberia’s growth
in its passenger capacity of 13.3% leading to an increase
in operating profit before exceptional items of €87 million.
Aer Lingus was impacted by industrial action in July, alongside
strong competition at its hub in Dublin from US carriers, leading
to a €20 million fall in its operating profit and an operating
margin of 8.6%.
Operating profit before exceptional items
2024
2023
Aer Lingus (€ million)
205
225
British Airways (£ million)1
2,048
1,344
Iberia (€ million)
1,027
940
Vueling (€ million)
400
396
IAG Loyalty (£ million)1
420
367
1
2023 comparatives restated for the transfer of BA Holidays from
British Airways to IAG Loyalty.
IAG Loyalty continued to achieve double-digit growth in
its operating profit, increasing by £53 million to £420 million
(€495 million) in 2024, driven by the growth of its non-airline
partner revenue streams, together with benefiting from the
strong performance of the Group’s airlines. BA Holidays was
transferred from British Airways to IAG Loyalty during 2024.
Free cash flow
The Group uses Free cash flow as an Alternative performance
measure. Free cash flow is defined as Net cash flows from
operating activities less Acquisition of property, plant and
equipment and intangible assets. See Alternative performance
measures section for further details.
€ million
2024
2023
Variance
Net cash flows from operating
activities
6,372 4,602
1,770
Acquisition of property, plant
and equipment and intangible
assets
(2,816) (3,282)
466
Free cash flow
3,556
1,320
2,236
In 2024, Free cash flow was €3,556 million, up €2,236 million
versus 2023, driven by higher operating cash flows linked
mainly to the significant increase in operating profit described
above, together with lower interest payments associated with
debt repayments in the second half of 2023, and reduced
capital expenditure - both explained below.
Cash flows from operating activities
€ million
2024
2023
Variance
Operating profit
4,283
3,507
776
Depreciation, amortisation and
impairment
2,364
2,063
301
Increase in provisions (excluding
carbon-related obligations)
282
25
257
Purchase of carbon-related
assets net of the change in
carbon-related obligations
62
(50)
112
Interest paid
(764) (1,005)
241
Interest received
367
365
2
Tax paid
(245)
(291)
46
Movement in working capital
(82)
(142)
60
Other operating cash flow
movements
105
130
(25)
Net cash flows from operating
activities
6,372 4,602
1,770
The principal components of the €282 million increase in
provisions are the exceptional restructuring charge in Iberia and
aircraft maintenance provisions for restoration and handback
obligations for leased aircraft. The cash payments for ETS
allowances (carbon-related assets) acquired during the year
were lower than the provision charged to Fuel costs and
emissions charges in the Income statement, linked to the
Group’s balance of allowances built up in previous years and
resulting in a net inflow of €62 million.
The reduction in interest paid in 2024 reflects the early
repayment of debt in the Group’s airlines in 2023, explained
further below.
Cash tax in 2024 benefited from the receipt of refunds of €101
million in relation to changes to Spanish tax legislation; a further
€88 million is expected to be received, at the earliest, in 2025.
See note 10 to the consolidated financial statements for further
details.
The normal expected working capital cycle associated with
growth in the Group’s airlines would lead to a modest cash
inflow, related to increased deferred revenue for passenger
tickets sold in advance of travel, and higher trade payables
linked to a larger operation, and therefore higher fuel and
supplier costs.
In 2024, working capital was negatively impacted by the incidence
of cash payments versus Income statement provisions related
to certain maintenance contracts, VAT payments in respect
of IAG Loyalty, as described in note 10 to the consolidated
financial statements, and higher fuel and SAF prepayments
at 31 December 2024, together with a reduced fuel price which
had the effect of reducing trade payables.
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International Airlines Group | Annual Report and Accounts 2024
40
Capital expenditure
In 2024, the Group continued to invest in the replacement and
growth of its aircraft fleets, customer products and services,
and IT infrastructure and applications. Capital expenditure,
measured as the Acquisition of property, plant and equipment
and intangible assets from the Cash flow statement, was
€2,816 million, compared with €3,282 million in 2023, with
the reduction of €466 million due mainly to the lower number
of new aircraft delivered in the year and the re-profiling of pre-
delivery payments for aircraft to be delivered in future years,
linked to delayed future deliveries. There were also supply chain
delays that impacted on retrofitting older aircraft with new
cabin interiors. Investment in other property, plant and
equipment, and in IT, which includes software assets recorded
within Intangible assets, was higher than in 2023, as the Group
continues to invest in its customer product, IT estate and
transformation projects.
€ million
2024
2023
Property, plant and equipment – fleet
2,035
2,715
Property, plant and equipment – other
296
193
Intangible assets
485
374
Total
2,816
3,282
In 2024, the Group took delivery of 19 new aircraft from Airbus
and Boeing: 13 for British Airways, two for Iberia, and four
for Aer Lingus. The Group also took delivery of 15 used aircraft
direct from aircraft lessors: one additional Airbus A330-200
for LEVEL and 14 Airbus A320ceo aircraft for Vueling, including
aircraft to backfill additional aircraft maintenance requirements
linked to the Pratt & Whitney ‘GTF’ engines issue.
Aircraft deliveries
2024
2023
Airbus A320neo family
10
19
Airbus A321XLR
3
–
Airbus A350
2
7
Boeing 787-10
4
2
Sub-total manufacturer deliveries
19
28
Airbus A330
1
2
Airbus A350
–
2
Airbus A320ceo
14
2
Total
34
34
Capital commitments
Capital expenditure authorised and contracted for at 31
December 2024 amounted to €12,634 million (2023: €12,706
million). Whilst the number of aircraft represented by these
commitments fell during 2024, with more deliveries than
new orders, the value of capital commitments only fell slightly,
due to the strengthening of the US dollar over the course
of the year, as most of these commitments are denominated
in US dollars.
The Group has certain rights to cancel commitments in the
event of significant delays to aircraft deliveries caused by the
aircraft manufacturers. No such rights had been exercised as
at 31 December 2024.
Aircraft orders
During 2024, the Group converted 10 A320neo options to firm
deliveries in 2029, as replacement aircraft for its short-haul
network. A new order was placed for two new Airbus
A350-900 aircraft for Iberia, to be delivered in 2026 and 2027.
Aircraft future deliveries at 31 December
2024
2023
Airbus A320ceo
7
3
Airbus A320neo family
82
82
Airbus A321XLR
11
14
Airbus A350
3
3
Boeing 737
50
50
Boeing 777-9
18
18
Boeing 787-10
7
11
Total
178
181
In addition to the committed future deliveries shown above, at
31 December 2024, the Group held options to acquire a further
223 aircraft from Airbus and Boeing.
The Group anticipates ordering further aircraft in 2025,
including long-haul aircraft for replacements and growth,
consistent with its strategy set out at its Capital Markets Day in
November 2023.
Funding and debt
IAG’s long-term objectives when managing capital are: to
safeguard the Group’s ability to continue as a going concern
and its long-term viability; to maintain an optimal capital
structure in order to reduce the cost of capital; and to provide
sustainable returns to shareholders.
The Group’s current ratings (at 27 February 2025) are all
investment grade, with the following ratings: S&P: BBB-
(positive outlook), Moody’s: Baa3 (stable outlook). British
Airways has separate credit ratings, which are also investment
grade, with S&P BBB- (positive outlook), Moody’s: Baa3
(stable outlook) and Fitch BBB- (stable outlook).
Net debt and leverage
The Group monitors leverage using net debt to EBITDA before
exceptional items, in addition to closely following measures
used by the credit rating agencies, including those based
on total borrowings (gross debt).
In 2019, the Group set a target of net debt to EBITDA before
exceptional items below 1.8 times, which broadly corresponded
to investment grade with the credit rating agencies. At its
Capital Markets Day in November 2023, the Group confirmed
this target remains appropriate.
As at 31 December 2024, net debt to EBITDA before
exceptional items had reduced to 1.1 times, compared with
1.7 times in 2023, reflecting the strong recovery in profitability
and the related cash generation, with capital expenditure
€466 million lower than the previous year, impacted by aircraft
delivery delays and the related impact on pre-delivery
payments for future aircraft deliveries.
€ million
2024
2023
Higher/
(lower)
Total borrowings (gross debt)
17,345 16,082
1,263
Cash, cash equivalents and
current interest-bearing deposits
9,828
6,837
2,991
Net debt at 31 December
7,517
9,245
(1,728)
Net debt to EBITDA before
exceptional items (times)
1.1
1.7
(0.6)
Gross debt to EBITDA before
exceptional items (times)
2.5
2.9
(0.4)
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41
Debt
Gross debt increased by €1,263 million to €17,345 million at
31 December 2024, with the two biggest increases being
€639 million due to the strengthening of the US dollar (as the
majority of aircraft financing is denominated in US dollars)
and €281 million due to the increase in the fair value of IAG’s
€825 million convertible bond due in 2028, itself closely linked
to IAG’s strong share price performance in 2024. The remaining
balance of the increase is explained by the net impact of the
financing of new aircraft, leases for used aircraft acquired or
extended under operating leases, and repayments of leases.
Key cash flow extracts relating to debt
€ million
2024
2023
Variance
Within investing activities
Sale of property, plant and
equipment, intangible assets and
investments
584
1,091
(507)
Within financing activities
Proceeds from borrowings
1,474
1,001
473
Repayment of borrowings
(410) (4,268)
3,858
Repayment of lease liabilities
(1,737)
(1,731)
(6)
Aircraft debt
Long-term aircraft financing was drawn for 21 new aircraft
during 2024, including five aircraft that were delivered in 2023.
The €584 million of cash inflow from the Sale of property, plant
and equipment, intangible assets and investments is mainly
due to aircraft sale and leaseback transactions in the year,
for aircraft financed on operating leases. Proceeds from
borrowings of €1,474 million reflects the proceeds from aircraft
financed on finance leases. The Group also secured committed
funding of €134 million, to be drawn in 2025, for two Iberia
aircraft; this committed funding is included in committed and
undrawn aircraft financing facilities at 31 December 2024.
The Group continues to have attractive alternatives for aircraft
financing, which include retaining new aircraft unencumbered,
in order to balance the mix of net debt between gross debt
and cash.
The repayment of borrowings of €410 million is mainly in
respect of aircraft on finance lease arrangements entered into
from 1 January 2019 onwards, the date from which IAG adopted
IFRS 16 ‘Leases’. The repayment of lease liabilities of €1,737
million includes €814 million of principal repayments in respect
of finance leases in place on 31 December 2018 and accounted
for under IFRS 16 as lease liabilities; the balance of €923 million
includes the principal element of aircraft operating lease payments
in the year, together with certain other lease liabilities.
Non-aircraft debt
In 2023, the Group’s airlines repaid early €3,271 million of debt
that was due to mature between 2024 and 2026; the airlines
had raised this additional debt during the COVID-19 pandemic.
In 2024, no further debt was repaid early.
At 31 December 2024, the Group’s general debt, aside from
aircraft financing-related debt, included: two €500 million
IAG bonds due in 2025 and 2027, respectively; IAG’s €825
million 2028 convertible bond; and a €700 million IAG bond
due in 2029.
In January 2025, the Group further reduced its debt, redeeming
a notional amount of €277 million of its 2027 unsecured bond
and €300 million of its 2029 unsecured bond; the €500 million
2025 unsecured bond will be repaid in March 2025.
Cash
Cash, cash equivalents and interest-bearing deposits
€ million
2024
2023
Higher/
(lower)
Aer Lingus1
567
356
211
British Airways
2,530
1,360
1,170
Iberia
2,069
1,890
179
Vueling
1,054
452
602
IAG Loyalty
1,134
1,374
(240)
IAG and other Group companies
2,474
1,405
1,069
Cash and cash equivalents and
interest-bearing deposits
9,828
6,837
2,991
1
At 31 December 2024 Aer Lingus held €29 million of restricted cash
(2023: €31 million) in interest-bearing deposits maturing after more
than three months to be used for employee-related obligations.
British Airways, Iberia, Vueling, Aer Lingus and IAG Loyalty
all experienced significant positive operating cash flow in the
year. The reduction in IAG Loyalty’s cash balance was due
to consideration paid to British Airways for the acquisition
of BA Holidays. The rise in cash in IAG and other Group
companies principally represents dividends upstreamed from
the operating companies during the year.
Liquidity
Total liquidity, measured as cash, cash equivalents and interest-
bearing deposits of €9,828 million and committed and undrawn
general and aircraft facilities of €3,534 million, was €13,362
million at 31 December 2024. This represented an increase of
€1,738 million versus total liquidity of €11,624 million at the end
of 2023, linked mainly to the Group’s cash generation during
the year and the reduction in facilities, which was also linked
to the Group’s strong balance sheet and cash position.
€ million
2024
2023
Variance
Cash, cash equivalents and
current interest-bearing deposits
9,828
6,837
2,991
Committed and undrawn general
and overdraft facilities
3,400
4,412
(1,012)
Committed and undrawn aircraft
facilities
134
375
(241)
Total
13,362
11,624
1,738
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International Airlines Group | Annual Report and Accounts 2024
42
Liquidity facilities
During the year, the Group entered into a new five-year
$3.0 billion (€2.9 billion), sustainability-linked, secured
Revolving Credit Facility (RCF), accessible by British Airways,
Iberia and Aer Lingus, each of which has separate limits.
As a consequence, the Group extinguished its $1.755 billion
(€1.6 billion) secured RCF and British Airways extinguished
its two £1.0 billion Export Development Guarantee Facilities
that were partially guaranteed by the UK Export Finance
(total value: €2.4 billion). The three extinguished facilities
were not drawn in the period prior to cancellation and the
new $3.0 billion RCF was not drawn at 31 December 2024.
Aer Lingus has a €350 million credit facility with the Ireland
Strategic Investment Fund (ISIF), which is available until
March 2025. This facility was undrawn at 31 December 2024.
The Group also has certain other committed and undrawn
general and overdraft facilities, amounting to €120 million,
bringing total committed and undrawn general and overdraft
facilities at 31 December 2024 to €3,400 million (2023:
€4,412 million).
The Group also holds €134 million of committed and undrawn
aircraft financing facilities (2023: €375 million). The committed
amount at 31 December 2024 represents financing for two
Iberia aircraft, to be drawn in 2025.
In total, the Group had €3,534 million of committed and
undrawn general and aircraft facilities as at 31 December 2024
(2023: €4,787 million).
The facilities values above do not include the balance of certain
shorter-term working capital facilities available to the Group’s
operating companies.
Equity
No equity was raised or repaid during the year, nor in 2023.
Dividends and share buybacks
In 2024, the Group paid an interim dividend of €0.03 per share
in September. The Board has proposed a final dividend of €0.06
per share and this will be paid subsequent to the General
Shareholders’ Meeting in June 2025. No dividends were
proposed or paid in 2023.
In November 2024, the Group announced a €350 million share
buyback, to be completed by the end of February 2025.
In February 2025, the Group announced its intention to return
up to €1,000 million of excess capital to shareholders in up to
12 months, driven by the Group's significant cash flow
generation.
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43
Engagement context
Aviation continues to push forward
technical innovation and develop new
commercial opportunities across
international boundaries. These
characteristics help make the sector a
significant generator of economic
growth. Connecting people, businesses
and countries makes IAG’s businesses
part of a strategic industry that is of
considerable interest and importance to
policymakers.
We aim to steer policymakers’ interest
towards actions that enhance the social
and economic benefits of the Group’s
activity and to explain the impacts of
proposals in terms of connectivity,
consumer benefits and effects on the
economy. To do so, IAG engages with
policymakers chiefly in the countries in
which its operating companies are based
and with those in their largest markets.
The institutions of the European Union
are an important audience for our
discussions. The new institutional cycle
in the EU presents new opportunities
for IAG: the EU’s renewed emphasis
on the competitiveness of its companies
provides a fresh perspective for our
advocacy efforts as a leading airline
group committed to creating sustainable
long-term value. In 2024, IAG held
90 meetings with EU and national
representatives in Brussels.
In the different jurisdictions in which we
engage, we cover a wide range of policy
topics from sustainability to accessibility.
The aviation industry’s international,
safety critical nature, direct customer
engagement, as well as fierce
competition, all mean it is subject to
different regulators worldwide.
Supply chain pressures
The year 2024 began with sharp
regulatory focus on Boeing when
a door panel blew off a Boeing 737 Max
9 aircraft in flight over the US. This
incident proved not to be just an
isolated (albeit serious) technical matter
but had far-reaching consequences for
Boeing and its customers. Investigation
of the incident led the Federal Aviation
Agency to raise concerns about
Boeing’s management processes and
restricted its production, leading to
upheaval at the company including
significant industrial relations disputes.
The impact of these issues means
inevitable delays to Boeing aircraft
delivery but was just one factor
providing airlines with challenges related
to aircraft and maintenance. The
international supply chain for parts
remained stretched in 2024 and is yet
to return to pre-pandemic norms.
This made ad hoc maintenance slower
and added pressure to fleet availability.
British Airways was also affected
adversely by the durability issues with
its Rolls-Royce Trent 1000 engines.
Six aircraft in its long-haul fleet were
unavailable at stages during the year
as the Trent engines underwent renewal.
This delayed the introduction of new
routes and required the airline to reduce
frequencies to some destinations.
Airspace challenges
Aviation infrastructure providers also
presented challenges to airline
operations in 2024, with summer 2024
being reported by Eurocontrol as the
second-worst summer ever for en-route
air traffic flow management (ATFM)
delays (after 1999) with half of all flights
across Europe not sticking to their
original plan.
Air traffic management in Europe
remains fragmented and lack of capacity
and restrictions created delays for all
IAG’s airlines. Eurocontrol reported that
while traffic volume was up 4.8% in the
summer of 2023 (June-August), ATFM
delays were up 52%. Of all summer
delays, 37% were due to structural lack
of air traffic control (ATC) capacity and
12% to lack of staff among air navigation
service providers. IAG continued to
engage with the EU and with national
governments both directly and through
its trade associations, in particular
Airlines For Europe (A4E), to seek
solutions to the impact of disruption
caused by ATC.
In parallel, at a technical level and led
by Vueling, we have been progressing
in the working groups with the air
navigation services providers (ANSPs)
such as Spanish ENAIRE and
Eurocontrol to measure the airspace
efficiency of different routes using a
recently set new standard and to
implement quick wins with the common
goal to reduce CO2 emissions.
At the same time, in 2024, ANSPs
presented their performance plans to
the European Commission for the years
2025-2029 (known as Reference Period
4 - RP4). Many ANSPs across Europe
have submitted high single or double
digit increases in unit rates and are likely
to collectively miss the EU performance
target of decreasing the navigation
charges at -1.2% per annum. We continue
to engage with individual ANSPs and
their regulators, as well as the European
Commission and the Performance
Review Body as IAG and through A4E
and IATA, to push back on these cost
increases and inefficiencies.
In 2024, EU institutions reached an
agreement on the reform of the Single
European Sky (SES2+); however, the
new compromise is not expected to
deliver the promised improvements in
terms of airspace capacity, operational
efficiency and sustainability.
IAG welcomes initial steps set out by the
UK Government in October to introduce
a new Airspace Design Service to
accelerate modernisation of the airspace
around London.
Airport infrastructure impacts
The efficient provision of airport
capacity at the Group’s airlines’ main
hubs remains a significant issue. In July,
the UK CAA published its final decision
on Heathrow Airport’s charges resulting
in a further 6% decrease to the regulated
price cap to an estimated £23.73 per
passenger in 2025. Nevertheless,
Heathrow remains the most expensive
airport in the world without a matching
customer experience. We continue to
engage with CAA on the next five-year
regulatory period but advocate reform
of Heathrow’s economic regulation. This
is required now to benefit consumers
and keep the UK’s only hub competitive,
but it is essential before the Government’s
welcome intent to expand runway
capacity can be realised.
In Spain, IAG’s operating airlines worked
with Spanish association ALA to
respond to airport operator AENA’s
demand for a further allowance for
COVID-19 losses which would be
recovered through future airport
charges. ALA and its members are
seeking a mutually acceptable solution
with AENA, while the Spanish civil
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Financial Statements
Sustainability Statement
Regulatory environment
Active engagement on key
policy challenges
International Airlines Group | Annual Report and Accounts 2024
44
aviation authority also does not support
AENA’s demand. Our Spanish operating
airlines will also start working with ALA
to begin an open dialogue with AENA on
next year’s consultation on airport charges
for the period 2027-2031 (known as DORA
3), a period that is key as it will include
an investment of €2,400 million for the
expansion of Madrid, Barcelona and other
Spanish airports.
IAG, together with the individual airlines,
is challenging airport fee increases that
exceed inflation at other major airports.
The most notable case is Amsterdam
Schiphol, where charges will rise by
47% in 2025 despite airlines’ strong
objections with the airport authority
blaming inflation and wage hikes for
the increases, despite fees already
having increased by 40% over the past
three years.
The Irish Aviation Authority (IAA) aimed
to impose a passenger cap at Dublin
Airport, but Aer Lingus and other airlines
legally challenged the decision. In
November the High Court granted a stay
on capping take-off and landing slots for
the summer 2025 season, and the case
has now been referred to the ECJ.
The Group, through its engagement
with the Irish Government and other
stakeholders, continues to emphasise
the urgent requirement for a resolution
to this issue.
IAG worked with IATA on another
systemic issue affecting UK aviation
in 2024: the role of the airport slot
coordinator, Airport Coordination
Limited (ACL). IAG values the
independence of the coordinator but,
along with other airlines, has become
concerned that it is not always making
decisions in the interests of airlines
or their customers. IAG considers that
ACL’s failure to grant appropriate
flexibility in slot alleviation in response
to the impact on airline operations of
events such as military activity in the
Middle East or the CrowdStrike outage
means the coordinator’s decisions on
slot allocation are reducing the resilience
of the system. IAG encourages the UK
Government to provide ACL with formal
guidance to clarify airlines’ use of slots
and maintain efficient use of capacity
at constrained airports.
Worldwide crises continue
As the war in Gaza intensified in 2024
and Northern Israel came under further
attack from armed groups in Lebanon,
IAG’s operating companies were forced
to cancel flights to Tel Aviv until March
2025 (British Airways also cancelled
flights to Amman for a period). The
Group continues to monitor the situation
in the region closely.
Since Russia’s invasion of Ukraine in
2022, Russian airspace has been closed
to EU and UK airlines but not to those
from China, among other states. This
restriction continues to add considerable
time to flights to Asia and causes
congestion in the airspace south
of Russia in particular. The additional
hours and fuel burn continue to add
considerable extra cost to operations.
We seek a level playing field with
competitor airlines operating these
routes, particularly to China, and
continue to explain the impacts to
aviation authorities while a regulatory
mechanism is sought.
Consumer trends
The impacts of these geopolitical and
other external factors, in particular the
lack of ATC capacity, caused disruption
for customers and regularly brought
the situation to the attention
of policymakers and regulators.
In 2024, the EU focused on the Passenger
Rights Package presented at the end
of 2023, which aims to improve aspects
like multimodal journeys, better
information for consumers or enhanced
rights for customers who bought via
intermediaries. IAG has been actively
engaging on this dossier, leveraging
our experience in offering better travel
solutions to boost customer satisfaction
including using digital means.
With A4E, IATA and ERA (European
Regional Airlines Association) IAG
engaged with the European Commission
to support the principle of ‘unbundling’
products in response to the Spanish
government’s legal action against Vueling
and other airlines on their hand luggage
policies. As a result of the advocacy
activities, the European Commission has
started an exchange on the matter with
Spanish Authorities in the context of
a so called EU Pilot dialogue.
A4E commissioned a study on the
aviation intermediary sector. The report
highlights that online travel agencies
(OTAs) do not always meet customers’
expectations of objective price
comparison services. In fact, OTAs’
prices were found to be an average
of 25% higher than those available from
airlines, with consumers facing hidden
mark-ups and charges. The report
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45
comes in the context of the European
Commission designating booking.com
as a gatekeeper under the EU’s Digital
Market Act (DMA) and the mandate
to the new Transport Commissioner to
prepare a proposal for a Single Digital
Booking and Ticketing Regulation to
ensure that Europeans can buy one
ticket on one single platform and benefit
from passenger rights for the whole trip.
The US also put a focus on consumer
regulation, fitting with the Biden
administration’s long-standing suspicion
of the extent of competition in the US
domestic market. In October it launched
a wide-ranging inquiry into the state
of the market, to which IAG contributed,
following a separate probe into the
frequent-flyer programmes of major
airlines announced in September.
IAG is monitoring developments under
the new Trump administration which
is expected to be less likely to take
forward such investigations.
Alongside these reviews the US
Government introduced several new
regulations including those on family
seating and to require automatic refunds
for cancellations or for significant
changes to flights.
The US also introduced additional
requirements for support for passengers
using wheelchairs including staff training
on properly handling motor wheelchairs
during boarding and ensuring
appropriate seating arrangements for
passengers with disabilities. The political
approach was reinforced by the
Department for Transportation levying
large fines on US carriers for failure to
meet regulatory standards in this area.
While the US has been the most active
jurisdiction in 2024 in this field,
accessibility is an increasingly important
topic among regulators around the
world. In the EU, for example,
extra attention is paid to passengers
with special needs in the new Passenger
Package proposal. The UK also brought
in an airline accessibility framework
to mirror its existing scheme for airports.
IAG was encouraged to see that the
regulator took on board views from
disability rights groups and airlines
in its final decisions on the make-up of
this scheme so that it will be practical
and enforceable.
IAG supports measures to improve the
experience of passengers with additional
needs and has taken an active role
in international efforts to coordinate
the industry response to regulatory
measures through IATA and with local
regulators. We continue to advocate
a customer-service based approach
as opposed to regulatory measures,
as being likely to achieve the best
outcomes for consumers.
Sustainability policy
The issue of sustainability and the
energy transition remained the key topic
for the airline sector in its interaction
with policymakers.
IAG continues to encourage regulators
to take a balanced approach to
introducing requirements on the
industry that recognise the social and
economic benefits that air travel
generates. We aim to secure measures
that support the development of SAF
in order to bring down the costs of this
essential part of the transition to net
zero emissions. These measures
include policy support to ensure SAF
investment, in particular because
government mandates for SAF supply
will be insufficient on their own
to achieve industry and government
emissions targets.
With this regulatory and institutional
audience we aim to promote
decarbonisation initiatives in a way
that maintains the global competitiveness
of European aviation.
In the EU, there has been a shift
towards measures with a focus
on competitiveness of European
companies, following the presentation
of the Letta Report and especially the
Draghi Report. This latter report includes
some of the policy requests that IAG
has been calling for with European
institutions such as earmarking the
revenues of the EU Emissions Trading
System (ETS) to support emissions’
reduction in transport.
We welcome and support the
2025-2029 mandate of the new College
of Commissioners for a Sustainable
Transport Investment Plan to scale-up
and prioritise transport. IAG is working
with A4E to make sure that SAF
is included as part of this plan.
Positively, 2024 has been the first year
that allowances for eligible fuel have
been made available in the ETS to
airlines to mitigate the extra cost of SAF
under that system. This mechanism has
supported IAG’s increased use of SAF
in 2024 in the EU.
We were encouraged to see the
announcement by the new UK
Government that it will legislate for
a revenue certainty mechanism (RCM)
to support investment in SAF
production in the UK. This is expected
in 2025 and should be used to support
the development of production facilities
that test new technology and kick-start
the industry in the UK. It is an essential
complement to the SAF mandate
that was brought into law in November
and is effective from January 2025,
implementing the previous
government’s plans.
The new Labour government’s first
budget also stated that it would
maintain the Advanced Fuels Fund
scheme until the RCM is in place,
a measure IAG entirely supports.
Taxation
In the EU, discussions regarding the jet
fuel aviation tax included in the revision
of the Energy Taxation Directive (ETD)
proposed in July 2021 by the European
Commission are ongoing. Although
the mandate of the new College of
Commissioners encompasses concluding
negotiations on the ETD, significant
differences remain between EU member
states, which have the exclusive
authority to reach this agreement.
At the beginning of 2024, A4E presented
the outcomes of a report prepared by
a consultancy firm assessing the impact
of the jet fuel aviation tax on connectivity
and the economy across various regions
in Europe. In Spain, the study was
presented by A4E alongside Spanish
ALA, emphasising the tax’s economic
implications for Spain and the particular
case of Catalonia. Positively, we saw
during the last part of the year, that the
Hungarian Presidency of the Council
proposed exempting shipping and aviation
from fuel tax for the next 20 years.
Throughout 2024, varying trends in
aviation taxes emerged across different
jurisdictions.
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International Airlines Group | Annual Report and Accounts 2024
46
Sweden announced that its aviation tax
would be abolished in July 2025 due to
its negative effects on economic growth,
tourism, employment and low-fare
connectivity for Swedish citizens.
Conversely, in the October Budget,
the UK introduced a minor increase to
Air Passenger Duty on short-haul travel
for the first time for 10 years, and a
larger increase on long-haul, including
premium economy. IAG considers that
APD continues to be a drain on UK
international competitiveness.
Other jurisdictions, such as France
and Nigeria also began to implement
or increase taxes on aviation.
A further significant challenge occurred
in India, where the government aimed
to impose Goods and Services Tax
(GST) on international airlines, marking
a considerable departure from
international norms. After extensive
engagement and clarification,
India’s GST Council granted
an exemption; however, the issue
remains under review.
On the different tax dossiers, IAG
continues to engage and monitor
the situation closely, alongside
its trade associations.
International relations
In 2024, IAG and its operating airlines
continued to participate in international
events to support air transport market
access, including the ICAO Civil Aviation
Network conference in November. Our
goal is to maintain positive relationships
with regulators and policymakers in key
markets to expedite the resolution of
doing-business issues and to identify
strategic topics at an early stage.
In 2024, this included taking part in
40 air services negotiations between
the UK, Spain and third countries of
interest for our operating airlines. Also,
we have participated in conversations
between the European Commission and
third countries including the EU-US
Joint Committee.
Engagement approach
In addition to direct engagement with
policymakers across our jurisdictions,
IAG actively participates in trade
associations, both at high level and
technical level at the different
governance bodies and working groups
to advance its policy recommendations.
In the case of the International
Air Transport Association (IATA),
Luis Gallego is a member of the Board
and the Chair Committee and has been
voted by the Board as Chair-elect;
he will chair IATA for one year from
June 2025.
IAG is a founding member of A4E and
actively participates in the association,
including CEO events in Brussels twice
a year. In the UK, IAG representatives
take active roles in Airlines UK and
participate in business organisations
such as the Confederation of British
Industry and British Chamber
of Commerce Business Council.
IAG has responded to relevant
consultations in different jurisdictions
such as on emissions flight labelling
in the EU or to different ANSPs’
performance plans across Europe.
We have engaged directly and through
trade associations to inform regulators
and propose balanced regulations,
with a view to avoiding introducing
additional rules that impact the
competitiveness of the airline industry.
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“We continue to place
a focus on transforming
our business through
our £7 billion
investment programme,
ensuring we deliver
for our customers,
our investors and
our people.”
Sean Doyle
Chair and Chief Executive Officer
of British Airways
14.2%
Operating margin before
exceptional items
+4.3pts vly
+4.4%
ASK change
vly
83.0gCO2/pkm
Carbon intensity
-3.7% vly
Business overview
In 2024 we delivered a strong operating
profit and continued to strengthen our
balance sheet, making good progress
in executing our transformation plan
as part of our £7 billion investment
to create a better British Airways for
our customers, investors and colleagues.
Demand for leisure travel continues
to outperform pre-pandemic levels,
and while business travel is recovering
at a slower pace in some markets,
we continued to see incremental
improvements throughout the year.
There is no denying that we continue
to navigate a challenging operating
environment, with a number of issues
outside our control that caused
disruption to our customers’ travel plans.
This included frequent air traffic control
restrictions, periods of adverse weather,
geopolitical events and ongoing global
supply chain issues, particularly in relation
to the availability of spare parts and the
Rolls-Royce Trent 1000 engines that are
fitted to our fleet of Boeing 787 aircraft.
As always, we worked hard to alleviate
the factors within our control and placed
an increased focus on improving our
operational performance even further.
We continue to invest in our customer
experience, our people and our
sustainability commitments as we
pursue the transformation of British
Airways and deliver for our customers,
our investors and our people.
Our people
Our people are key to our success, and
we are grateful for their continued hard
work and outstanding contributions
to our airline. We also welcomed more
than 5,000 new colleagues into the
business in 2024, including more than
600 colleagues into operational roles
at Heathrow, marking a 6.1% increase
in employment in comparison to 2023.
We have remained committed to
sustaining a positive working
environment and a culture in which
our colleagues feel proud, valued and
empowered to do the right thing for our
customers. We continued to maintain
constructive relationships with our trade
unions, and recent colleague survey
results indicate we are making good
progress in engaging with our people.
We improved travel benefits for our
colleagues and launched business class
standby agreements with other airlines
for the first time, something we know
matters to our colleagues.
We also unveiled our new Airport
Operations Control Centre at Heathrow
and continued to transform our
workspaces and colleague rest areas.
We’ve taken and continue to take
positive action to drive inclusion across
our airline and champion our colleague-
led networks, which celebrate different
perspectives, backgrounds and
experience - but we don’t shy away
from the fact that there is more work
to be done.
We also continue to move forward
with our industry-leading fully-funded
Speedbird Pilot Academy training
programme and have doubled the
number of places available on the
scheme in 2025 to 200, removing
the financial barriers and making
the opportunity to become a pilot
more accessible.
Our customers
We continue to invest for our
customers and remain focused on
improving the customer experience
and our Net Promoter Score. In 2024
we took delivery of 13 new fuel-efficient
aircraft, launched our new short-haul
seats and cabin interiors – and unveiled
our new ‘First’ seat which is set to debut
on our Airbus A380 aircraft in 2026. We
continue to retrofit our Club Suite onto
our existing long-haul fleet, invest in
our lounges and provide our customer
care colleagues with more tools and
new technology to better assist
our customers and resolve issues
in the moment.
We are making progress with our
transformation programme and in 2024
completed more than half of the 1,200
initiatives on our plan to transform our
business, including launching our new
short-haul seats and cabin interiors.
Transformation initiatives we continue to
work on include rolling out a brand-new
website and mobile app and introducing
AI and situational awareness tools to
improve our operational performance
and elevate the customer experience.
We continue to connect Britain with the
world and the world with Britain, and
launched flights to destinations including
Agadir, Izmir, Bangkok and Jeddah,
helping us to restore capacity to close
to pre-pandemic levels. We also
announced plans to launch new flights
to Tbilisi and Rimini and frequency
increases to a number of destinations
across our network in 2025.
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Continuing
to invest in
and transform
British Airways
Our planet
We remain fully committed to reducing
the impact flying has on our planet, and
sustainability has continued to be front
and centre of our business strategy.
We announced a partnership with CUR8
to become the largest airline purchaser
of carbon removals, purchasing more
than £9 million of carbon removal credits
as part of a six-year agreement. We also
partnered with The Earthshot Prize,
an organisation that works to discover,
spotlight and scale innovative climate
solutions across the globe, including
sustainable aviation fuels and carbon
removals.
All flights departing from London
Heathrow fly with a small amount of
SAF and we continue to work closely
with industry and government to invest
in and scale up the development of SAF,
which is urgently needed. We also
continue to empower our customers
to address their emissions via our
CO2llaborate platform, where customers
can choose to purchase carbon removal
credits or SAF before, during or after
their flight.
We continue to build a thriving and
responsible business and, during the
year, we celebrated raising more than
£30 million for Flying Start, our charity
partnership with Comic Relief, since
our partnership began in 2010.
Our customers and colleagues have also
helped us to raise more than £6.4 million
in funding to support more than 170
charities across the UK through our
BA Better World Community Fund.
Looking forward
We remain committed to delivering for
our customers and colleagues by running
an airline of which they can be proud,
while managing our costs and ensuring
we are operating safely and efficiently.
We made strong progress in 2024,
and looking ahead, we will continue
to transform our business, invest in
our customer and colleague experience
and consider our environmental impact
at every stage, as we work to create
a better British Airways for everyone.
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British Airways celebrates 25 years of
flying to and from London City Airport.
We welcomed more than 5,000
new colleagues in 2024.
We have raised over £30 million for
Flying Start, our charity partnership
with Comic Relief, since we started
working together in 2010.
“In 2024, we achieved
profitable growth,
fuelled by strong
demand across our
network. Our
transformation plan,
Plan de Vuelo 2030,
will drive ambitious
organic growth and
position Madrid as a
leading European hub.”
Marco Sansavini
Chair and Chief Executive Officer
of Iberia
13.6%
Operating margin before
exceptional items
+0.1pts vly
+13.3%
ASK change
vly
67.0gCO2/pkm
Carbon intensity (including LEVEL)
-2.2% vly
Business overview
In 2024, we achieved solid growth while
maintaining profitability, reinforcing
our position as one of Europe’s most
profitable airlines. Despite global
economic uncertainties, strong demand
across our key corridors and a decline
in fuel prices enabled us to expand
profitably.
We enhanced our long-haul fleet with
the addition of one Airbus A350-900
and one Airbus A321XLR, becoming the
global launch customer for the latter.
This aircraft has allowed us to operate
thinner transatlantic routes more
profitably and sustainably. We
encountered challenges with engine
availability due to supply chain
bottlenecks. Despite these challenges,
we set a record for connectivity
between Europe and Latin America,
surpassing 5.3 million seats - a 16%
increase compared with 2023.
In August, IAG withdrew from the Air
Europa acquisition as it was no longer in
the interests of shareholders.
Nevertheless, the Group’s commitment
to robust growth and building a leading
European hub in Madrid remains
unchanged. With over 20 initiatives
across our airline and maintenance
divisions, our Plan de Vuelo 2030 serves
as a comprehensive roadmap to create
lasting value for shareholders,
employees, customers and society.
Our people
Our employees are the cornerstone of
our success, and we believe that sharing
our financial and operational achievements
with them is a key component in
building the company’s future.
In line with this, we achieved a critical
milestone with the signing of an
agreement with the major pilots’ union
(SEPLA) which will enable us to share
profits with pilots if financial, operational
and customer service objectives are met.
Our aim is to extend similar profit-
sharing agreements to other employee
groups, starting with our cabin crew.
Throughout the year, more than
100 pilots, 450 cabin crew members
and 180 maintenance colleagues joined
Iberia. We are deeply grateful to all
our flight crews, ground staff and office
employees, whose commitment and
dedication have enabled us to
successfully minimise the impact of
a challenging operating environment
marked by significant air traffic control
restrictions during the summer.
Our customers
In 2024, despite operational challenges
during the summer, we successfully
maintained strong customer satisfaction.
Our commitment to service excellence
was recognised with awards including
‘Best Staff Service in Europe’ from
Skytrax and ‘Best Food Service’ from
Pax International Magazine.
We continue to connect Spain with
the world and the world with Spain,
and in 2024 we launched new routes
from Madrid to Tokyo, Innsbruck,
Salzburg and Tromsø, and increased
frequencies to Buenos Aires, São Paulo
and Santo Domingo.
We elevated the customer experience
at our Madrid lounge by introducing
new dining times and services, and
passengers on outbound flights from
Madrid enjoyed refreshed menus and
extended options. Additionally, we
expanded our in-flight entertainment
offering through a partnership
with Disney+.
Our Iberia Plus loyalty programme
also saw significant enhancements,
with new benefits for top-tier members.
We introduced Avios-Only Flights to
various short-haul destinations across
our network, where every seat is
exclusively available for purchase using
the loyalty currency.
Our planet
In 2024, we advanced our sustainability
strategy to accelerate the industry’s
transition, and reduced our carbon
intensity by 2.2% compared to 2023.
We secured SAF agreements with
corporate customers and completed
several offtake deals, reinforcing our
commitment to SAF industry growth.
Between Iberia and Iberia Express,
we increased our SAF consumption
by nearly 14 times compared to the
previous year. We also introduced a
5% SAF use in our MRO engine test
bench operations at our La Muñoza site.
Additionally, we implemented a water
reduction plan and completed the
second phase of our solar panel project
at these facilities.
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Building a
leading hub
In January 2024, we earned IATA’s
IEnvA environmental certification,
further highlighting our sustainability
efforts. In the last quarter, Iberia
partnered with Nexus Lab through
the Hangar 51 programme to better
understand the impact of non-CO2
emissions, such as contrails. We also
developed an on-board food waste
reduction plan with the NGO
Enraíza Derechos.
Looking forward
In 2025, we anticipate continued
profitable growth, expanding our
long-haul network with six additional
Airbus A321XLRs and an additional
Airbus A350-900.
Through our Plan de Vuelo 2030, we are
committed to continuing to transform
Iberia by focusing on three strategic
pillars: maintaining financial robustness
and operational excellence, establishing
Madrid as a leading hub in Europe, and
shaping the future of our handling and
maintenance businesses.
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Iberia Maintenance will use 5% SAF throughout the year
in its engine test bench at the La Muñoza site.
Iberia won the top award for
Best Airline Staff in Europe
at the 2024 World Airline Awards.
Iberia has become the first airline in the world to operate
transoceanic routes with the new Airbus A321XLR.
“Our transformation
is positioning Vueling
among the
top-performing
European low-cost
carriers, thanks to
the great efforts of
our 4,700 colleagues.”
Carolina Martinoli
Chair and Chief Executive Officer
of Vueling
12.3%
Operating margin before
exceptional items
-0.1pts vly
+0.9%
ASK change
vly
79.2gCO2/pkm
Carbon intensity
+0.4% vly
Business overview
The year 2024 marked Vueling’s 20th
anniversary. Over two decades, we have
become a leading low-cost airline in
southern Europe, driven by innovation
and a digital-first mindset. Aviation is
constantly evolving, and we embrace
this dynamic and ever-changing sector
with a ‘Why not?’ attitude, pushing
boundaries and striving for continuous
improvement and transformation.
This year’s results reflect our team’s
dedication, with strong operating profit
of €400 million, a record-high load
factor of 92.2% and ranking among
Europe’s most punctual low-cost
carriers (LCC). The signing of the fourth
collective bargaining agreement for
pilots also marks a significant step in
securing sustainable agreements across
all our labour groups.
Amid a complex operational landscape,
we could manage challenges such as
ATC regulations, weather disruptions,
Pratt & Whitney geared turbofan engine
revisions and other supply chain issues,
demonstrating our resilience. In 2024,
the Spanish Ministry of Consumer Affairs
sanctioned Vueling and another four
airlines for hand luggage policy. The
case is under judicial review as it
allegedly breaches EU pricing freedom
and distorts competition in the single
market. Airline associations expressed
their concerns to the EC.
Our people
We are driving transformation by
fostering a culture rooted in our core
values: efficiency, teamwork and striving
for excellence. We are constantly
working to create an environment where
everyone can be their authentic selves
and reach their full potential. Initiatives
such as learning paths on diversity and
inclusion promote awareness of biases
and strategies to address them.
Employee networks and partnerships
with REDI (Business Network for LGBTI,
Diversity and Inclusion) highlight
our commitment.
Our values are embedded in all our
processes, including recruitment and
training. The ‘Yellow Academy’
offers cabin crew training and licence
sponsorships to prepare the next
generation of Vueling ambassadors.
Our transformation also emphasises
improving the work environment through
a health and wellbeing programme.
‘Make it Better’ is our platform
to encourage idea sharing and
collaboration to achieve business
goals and enhance services. An example
of ‘Make it Better’ ideas coming to life
is the data link initiative, which improves
data accuracy, fuel consumption and
pilot workload by quickly integrating
updated information on winds,
performance and flight plans.
These efforts have contributed to
Vueling being recognised by the Top
Employers Institute as ‘Top Employer’
in 2024 - the first airline in Europe
and second LCC worldwide.
Our customers
We are dedicated to elevating the
travel experience of our customers.
Our commitment to excellence is
reflected in maintaining one of the best
on-time performance records in Europe
while continuously enhancing our
services to set new benchmarks for
customer satisfaction. As a result,
our Net Promoter Score saw
an improvement.
This year, we made significant progress
in our roadmap to create a digital-first
experience that redefines customer
engagement at every touchpoint
of the journey. We are empowering
our customers with instant solutions,
including launching an online virtual
assistant, implementing seamless self-
management tools for disruption and
enhancing communication reliability.
We truly believe that exceptional service
begins with our people. That is why
we are prioritising capability-building
initiatives and focusing on developing
new programmes to foster strong
engagement across the company.
Our goal is to ensure our employees
feel heard, valued, and connected,
empowering them to deliver
outstanding service and drive
continuous improvement.
Our planet
Our commitment to society is a shared
value across the company. We work
tirelessly to reduce CO2 emissions,
with Sustainable Aviation Fuel (SAF)
playing a key role in achieving our
net zero emissions targets. This year,
we reached a new milestone by
supplying over 13,000 tonnes of SAF
- more than ten times the amount used
in 2023. Additionally, we continue to
invest in SAF development, exemplified
by our partnership with Seduco-
Wenergy to produce SAF derived
from liquid manure.
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52
20 years
flying together
Vueling also prioritises in-flight
operational efficiency. We introduced
the Optipath tool, which identifies
optimal flight paths and compares
them to actual trajectories, allowing
for precise calculations of potential
savings in fuel and CO2. We are actively
collaborating with Spanish and
European authorities to integrate this
tool into larger sustainability initiatives.
We are committed to creating a positive
social impact. With special focus
on three key areas: responding to
humanitarian crises, supporting
vulnerable children and promoting
gender equality and women’s
empowerment.
Looking forward
Innovation is at the heart of everything
we do. Our goal is to continuously
enhance efficiency, deliver advanced
solutions for our customers, and
empower our people. A good example
is our Vueling Tech University
Programme, which nurtures talent
and fosters innovation.
From leveraging generative AI
to developing new technologies
to anticipate future needs such as
predictive maintenance tools, we
believe this ongoing transformation
will further strengthen our position
in our key markets, optimise our
resources and improve the customer
experience in 2025, while addressing
environmental challenges.
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We launched our ‘Yellow Academy’,
which provides cabin crew with training
and sponsors their licences, preparing the
next generation of Vueling ambassadors.
Vueling enters a new SAF partnership
to produce organic SAF from slurry.
Vueling celebrates
its 20th anniversary.
“We made significant
progress in our
business transformation
and continuous
improvement
programmes,
leading to both
higher punctuality and
customer satisfaction.”
Lynne Embleton
Chair and Chief Executive Officer
of Aer Lingus
8.6%
Operating margin before
exceptional items
-1.3pts vly
+3.5%
ASK change
vly
81.7gCO2/pkm
Carbon intensity
-1.1% vly
Business overview
In 2024, we continued our business
transformation by investing in digital,
data and processes to improve the
customer experience while striving
for operational excellence. As a result,
our Net Promoter Score, On Time
Performance and Aircraft Technical
Reliability all saw increases compared
to last year.
Overall profitability was impacted by
the market pressures in our long-haul
economy cabin and pilot industrial
action; however, passenger demand was
strong across our short-haul European
network and in our North Atlantic
business cabin. Aer Lingus revenue
growth outstripped capacity increases,
despite the significant rise in competitor
capacity across the Atlantic.
Aer Lingus also faced uncertainty during
the year with a passenger cap being
imposed at Dublin airport. However,
in the fourth quarter the High Court
in Ireland granted a stay on the earlier
decisions of the Irish Aviation Authority
to reduce capacity in summer 2025.
The High Court has referred a number
of questions relating to the interpretation
of the EU Slot Regulation to the Court
of Justice of the European Union (CJEU)
and the stay will remain in place until
these matters have been determined.
The impact of the passenger cap issue
has eased but has not yet been resolved.
In addition, we progressed our strategic
initiative to grow our North Atlantic
position. We increased frequencies to
several destinations and launched new
routes to Denver, Minneapolis-Saint
Paul and Las Vegas.
Our people
At Aer Lingus, it is our ambition
that travelling with us means warm
welcomes, safe hands and great value,
every time you fly. It is our people
who make this possible.
In 2024, we continued our journey
to modernise ways of working. We are
improving processes and investing
in systems and tools to reduce the
everyday challenges our people face.
We completed the rollout of ‘Connected
Crew’ - enabling cabin crew to report
digitally after every flight, improving
both ease of reporting for crew and
the quality and timing of information.
We also implemented SAP, Salesforce
and a leading revenue management
system by Sabre, revolutionising the
tools used by our finance, customer and
revenue management colleagues.
In July 2024, following an extensive
process and a period of industrial action,
we came to an agreement over pay,
working terms and conditions with our
pilot community. The agreement covers
a four-year term, with an average pay
award of 4.4% per annum, a salary cap
for flying narrow-body aircraft and
higher productivity.
This year, Aer Lingus’ new Diversity,
Equity, Inclusion and Belonging strategy
was accredited by the Irish Centre for
Diversity with the Bronze Award.
Our customers
Significant programmes to enhance the
customer experience were delivered in
2024. Our New Distribution Capability
(NDC) agreement with Expedia ensures
more customers can avail of Aer Lingus’
pre-flight servicing, while the introduction
of Salesforce technology enables a
quicker and more personalised service
and experience for customers.
Our Day of Travel experience was also
improved. We added features to our
mobile app that increased self-serve
capabilities. In addition, we implemented
process changes at check-in and
boarding desks, reducing passenger
queuing time and increasing operational
efficiency. New lounges were opened in
Chicago, Boston and San Francisco,
while the London Heathrow lounge was
refurbished - offering a better product
for our business cabin passengers and
our AerClub members.
Major improvements were made in
our customer contact centres. With
investment in our people, systems and
processes, we have reduced customer
waiting times while improving agent
response times and increasing our
‘first call resolution’ rate.
Our planet
Our commitment to sustainability
continues, with our focus on delivering
reductions in emissions through new,
fuel-efficient aircraft and technologies,
the use of SAF and operational
improvements.
At the end of the year Aer Lingus
received the first of six Airbus A321XLR
aircraft, joining the eight Airbus A321LR
aircraft already in the fleet. These new
next-generation aircraft are more fuel
efficient and quieter than previous
generation aircraft. Now, 35% of our
long-haul fleet consist of these next-
generation aircraft.
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Building stronger
North Atlantic
connections
SAF remains a critical part of our
journey towards net zero emissions
by 2050. In conjunction with IAG
we procured SAF at Heathrow Airport
which represented 12% of our planned
fuel consumption at Heathrow.
We continue to reduce single-use plastic
on-board and expanded our recycling
on-board to our long-haul operation.
Looking forward
In 2025 we will strengthen our
transatlantic position with the
introduction of the Airbus A321XLRs,
new routes and investment in
our customer proposition.
Our transformation programme will
also continue with significant progress
planned across the entire airline.
We are confident this will deliver
efficiencies and capabilities that will
benefit both the experience of our
customers and the performance
of the business.
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In summer 2024, Aer Lingus as
official airline partner of Paralympics
Ireland, proudly transported 35 Team
Ireland athletes and coaches to Paris,
along with thousands of supporters.
After winning six medals, Team
Ireland returned to a heroes’
welcome at Dublin Airport.
Aer Lingus announced a new
route to Nashville, Tennessee
from April 2025, operating
four times weekly from Dublin
on the Airbus A321XLR.
This route connects over 20
European cities to Nashville,
a major market for the airline’s
DUB-Hub strategy.
“We are at a crucial
moment of
consolidation and
expansion. Receiving
our Air Operator
Certificate will allow
us to build our
long-haul network
from Barcelona.”
Rafael Jiménez Hoyos
Chair and Chief Executive Officer
of LEVEL
Business overview
2024 marked a historic year for LEVEL
as we obtained our Air Operator
Certificate (AOC), after operating under
Iberia’s licence until then. We also
expanded our seat capacity to the
highest number since our foundation
seven years ago.
During 2024 we completed the AOC
process and started the necessary
licensing procedures in each of the
countries where we operate. This
achievement strengthens Barcelona
airport’s international hub and supports
our ambitious growth plans within
the Group.
In the first quarter of 2024, we added
our sixth aircraft and ended the year
with the arrival of our seventh. This fleet
growth enabled us to grow our capacity
by 17.8% compared to the previous year,
which is equivalent to an extra
145,000 seats. We carried 20.7% more
customers than in 2023, with a strong
punctuality performance.
In 2024, we also launched a year-round,
direct service to Miami, with the new
route estimated to generate €50 million
in revenue for Catalonia every year.
Our people
Our people continue to play a central
role in everything we do. This year
we strengthened our organisational
culture and doubled down on our
commitment to maintaining a diverse
and inclusive place to work. We continue
to participate in Pride to reaffirm our
support for the LGBTQ+ community, with
our operational and corporate colleagues
joining the Pride parade in Barcelona
from our float. Overall, we are making
positive progress relating to equity,
diversity and inclusion initiatives and
practices, but there is still more to do.
Our customers
This year saw us continue to focus on
enhancing the customer experience and
growing our digital presence. We have
expanded our premium economy cabins,
doubling the seat capacity to offer more
choice for customers. Nearly 45% of
people who travelled with us used our
new pre-order platform, with two-thirds
of customers who pre-ordered a meal
choosing to customise their menu. We
launched an on-board library for both
adults and children, giving flyers the
opportunity to swap or pick up a book
for free when travelling with us. We
are proud that this project promotes
reading, cultural exchange and
sustainability through book reuse.
Our planet
Sustainability remains a core element
of our strategy. In 2024, we continued
to progress in line with our sustainability
roadmap, to lower our carbon footprint
and reduce our environmental impact.
To promote reuse and reduce waste,
we donated former crew uniforms
to a Barcelona-based NGO that supports
vulnerable individuals. We also
introduced lighter catering equipment,
which not only improves the service-
delivery experience for our crew but also
reduces the operational weight of the
aircraft by approximately 678 tonnes
annually, saving 203 tonnes of fuel and
helping to reduce CO₂ emissions by
508 tonnes.
Looking forward
Completing the AOC process will allow
us to continue building our long-haul
network from Barcelona. We are firmly
committed to contributing to the
development of the international hub
at Barcelona El Prat to further promote
economic growth and global
connectivity. We will follow the roadmap
of our growth plan in the US and Latin
America, key markets that are
a strategic priority for the Group.
To achieve this, we will expand our
fleet to eight aircraft by 2026. This plan
clearly reflects our mission to connect
Barcelona with the world and to
establish LEVEL as the leading long-haul
airline at Barcelona airport.
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Strengthening
our long-haul
proposition
in Barcelona
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We continue to focus on enhancing
the customer experience.
Our fleet growth enabled a capacity
increase of 17.8% compared to 2023.
From brand to airline
Launched in 2017, LEVEL was founded to
offer long-haul services between Europe
and North and Latin America at a low-
cost-carrier price point, giving customers
more choice across the Atlantic. The
airline’s first flights took off in June 2017,
with services to destinations including
Los Angeles, San Francisco, Punta Cana
and Buenos Aires, marking the start
of its operations.
LEVEL's fleet initially consisted of two
Airbus A330-200 aircraft dedicated to
long-haul routes. By 2019, the fleet grew
to four, with new destinations such as
Boston, New York and Santiago de Chile
added to its network.
During the COVID-19 pandemic, LEVEL
faced significant challenges. However,
its ability to adjust route offerings and
maintain essential services throughout
the crisis highlighted the resilience of
its business model. Despite the challenges,
LEVEL continued to serve selected routes,
focusing on cost efficiency and meeting
customer demand.
In 2023, LEVEL welcomed a new Airbus
A330-200 and became the leading long-
haul airline at Barcelona El Prat airport.
By 2024, its fleet had grown to seven
aircraft, and a new Miami route was
launched. At the same time, LEVEL
began working towards obtaining its
Air Operator Certificate (AOC).
The announcement that LEVEL would
transition into an airline with its own AOC
was made during IAG’s Capital Markets
Day in November 2023. The process began
with the creation of a new Operations
team that led the project and, since then,
the company has worked towards securing
the AOC. In December 2024, LEVEL
received its AOC, confirming that the
airline’s operations met the rigorous safety
standards set by AESA, the Spanish
Aviation Safety Agency. Simultaneously,
LEVEL obtained its operating licence, also
issued by AESA – verifying the financial
sustainability of its operations.
With the AOC and the operating licence
now secured, the final stages of the process
will be completed during 2025. The next
stage involves obtaining operational
permits to fly to each of the countries
where LEVEL operates, issued by the
national aviation authorities of Argentina,
Chile and the United States. Once this
process is complete, LEVEL will operate
under the IATA code ‘LL’; this will be the
only noticeable change for passengers.
This major milestone will enable the
airline, now in its eighth year, to
consolidate its next-generation business
model and focus on expanding long-haul
operations from Barcelona.
“We’re very proud
of the results we have
achieved. We are
entering a new chapter
with BA Holidays as
part of IAG Loyalty,
and we look forward
to further stretching
our ambitious goals.”
Adam Daniels
Chair and Chief Executive Officer
of IAG Loyalty
17.3%
Operating margin before
exceptional items
-0.6 pts vly
18.4%
Revenue growth
in 2024
177 billion
Total Avios issued
+24% vly
Business overview
IAG Loyalty had another record-
breaking year in 2024, with BA Holidays
moving from British Airways to IAG
Loyalty and becoming an integral part
of our business. More customers earned
and spent Avios and more passengers
embarked on a holiday with BA Holidays
than ever before.
Across our business, we have exciting
growth plans. With 77% of BA Holidays’
bookings coming from British Airways
Executive Club members, at IAG Loyalty
we can unlock our customer base to
accelerate growth in both businesses.
We improved our core proposition
by introducing new redemption
opportunities, making it even easier
for customers to spend their Avios.
We worked with the IAG operating
companies to simplify the customer
experience and harmonise their loyalty
programmes by aligning the award
of Tier Points according to spend.
Customers are also enjoying collecting
Avios from our growing network of
commercial partners, who are an integral
part of our business. We launched our
new global currency partner as Finnair
adopted Avios as the currency for
its loyalty programme. Finnair joins
Qatar Airways in our global network.
Following several years of discussion
with HMRC on the appropriate
accounting for VAT within our business,
we were disappointed that HMRC issued
a decision letter in October 2024 that
was contrary to the accounting
previously agreed with HMRC and
applied by IAG Loyalty. We strongly
disagree with the position taken by
HMRC and have subsequently appealed
this matter. Further information on
tax matters, including taxes paid and
collected by IAG is set out in note 10 of
the consolidated financial statements.
Our people
IAG Loyalty remains invested in its
people through an engaging people plan
that encompasses talent acquisition and
development, people experience and
culture. Every colleague plays a crucial
part in building, enhancing and
maintaining our business culture.
During 2024, the Loyalty team has built
a comprehensive new plan to develop
every individual to achieve their full
potential, as well as introducing new
measures to manage and reward
performance that will ensure the
business works to meet stretching
goals during 2025.
During 2024 the BA Holidays business
joined IAG Loyalty, with both businesses
earning equally high employee
engagement scores. Senior leaders
across all businesses met to welcome
Andrew Flintham as the new Managing
Director for BA Holidays and to
understand the potential that the joining
of our businesses has to offer.
A new colleague listening plan was
developed to further enhance the
colleague journey and to also ensure
that individuals have an opportunity
to offer feedback and help shape the
business strategy.
During 2025, our people plan will remain
at the very heart of our business.
Our customers
In 2024, we saw significant growth in
our customers’ engagement with our
programmes. Customers earned 24%
more Avios and redeemed 20% more
than in 2023. We introduced new
collection partners, making it easier
for our members to earn Avios through
everyday spending. Customers can now
spend their Avios to pay nearly 100%
of the value of British Airways flights
and can link their Iberia Plus and Vueling
Club accounts in a new digital wallet.
We launched our first British Airways
long-haul Avios-Only Flight and
extended Avios-Only Flights to Iberia
Plus and AerClub members.
We have around 69 million enrolled
members across our IAG frequent-flyer
programmes and our global currency
partners, Qatar Airways and Finnair.
In 2024, customers transferred 16 billion
Avios between their British Airways
Executive Club and Qatar Privilege
Club or Finnair Plus accounts, enabling
them to spend Avios while flying to
more destinations.
BA Holidays saw its highest customer
engagement to date in 2024, with
1.3 million customers embarking on a
holiday earning 1.1 billion Avios. British
Airways Executive Club bookings made
up 77% of BA Holidays customers and
reported a satisfaction score of 36.
Despite our strong satisfaction scores,
we believe we can do more. We
recognise the limitations of BA Holidays’
current platform and customer
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Expanding the
power of loyalty
frustrations with the online booking
process. We are investing in a best-in-class
customer experience and plan to make
significant progress on this in 2025.
Our planet
British Airways Executive Club members
continue to donate Avios to causes
supported by the BA Better World
Community Fund. IAG Loyalty ran two
match-funding campaigns, doubling the
value of Avios donations made to Comic
Relief between February 2024 and
March 2024 and to Alzheimer’s Society
between October 2024 and December
2024. Since the Community Fund’s
launch in 2022, over £300,000 has been
raised through members’ Avios
donations and match-funding provided
by IAG Loyalty. Iberia Plus members
continue to support the Avios Solidarios
initiative, where members can donate
Avios to their choice of non-governmental
organisation. Since its launch in 2019,
over 54 million Avios have been donated.
We laid the foundations this year for
future customer initiatives across both
Loyalty and BA Holidays. From April
2025, British Airways Executive Club
members will earn Tier Points
and collect Avios when they make
contributions to SAF, providing
members with a new way to earn
in addition to flying.
Elsewhere, IAG Loyalty entered into
its second year of a charity partnership
with Winston’s Wish, the children’s
bereavement charity. To date,
customers and colleagues have raised
over £80,000 for its work.
Looking forward
We will further grow our business in 2025
by strengthening our core proposition,
transforming BA Holidays and
expanding our global footprint. As our
airlines redefine how customers earn tier
status, we will work with them to ensure
the loyalty currency plays an important
role in the new Clubs going forward.
This will enable us to maintain a strong
operating profit and make a significant
contribution to the Group’s profitability.
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In 2024, BA Holidays transferred ownership
from British Airways to IAG Loyalty.
Following a successful launch in 2023, British
Airways completed its first-ever
long-haul Avios-Only Flight in October 2024.
Adam Daniels hosts an event in collaboration
with Skift, discussing consumer demand
for consolidated loyalty programmes.
“Our vision is clear: to
be a trusted, leading
logistics business, with
people and customers
at the centre of
everything we do,
and we are well
on the path to
achieving this goal.”
David Shepherd
Chief Executive Officer
of IAG Cargo
Business overview
The air freight industry experienced
a continuing two-speed market during
the year. In the East, supply chain
constraints, geopolitical factors and
disruptions in sea freight ensured yield
growth but reduced capacity. On
transatlantic routes, capacity growth
outpaced moderate demand, putting
downward pressure on the market yield.
This yield reduction was compounded
by a network configuration that was not
optimised for cargo operations.
Our strategy centred on four priorities:
continuing to modernise and improve
our commercial systems and processes;
developing our customer base; starting
to consider airline partners outside the
Group as customers for our capacity;
and investing in our infrastructure
to ensure that we have the capability
in our handling operations to deliver for
our customers to the level they expect.
As a result of our proactive approach,
we ended 2024 with revenues 6.7%
higher than 2023 and transported 12.6%
more tonnage than last year. This is
testament to our continued investment
in digital transformation and innovation
to enhance operational efficiency and
reliability for our customers.
Our people
We recognise that our people are
our most valuable asset and continue
to support them to be the best that they
can be. IAG Cargo was named one
of UK’s top employers by Top Employer
Institute, a global authority on
recognising excellence in people
practices. This accolade showcases IAG
Cargo’s dedication to building a positive,
inclusive workplace through people-
focused policies and practices, and
reinforces our commitment to be
a model employer.
Central to our business strategy is
investing in our teams, which led to the
introduction of a refreshed development
pathway designed to provide our
employees with the knowledge they
need to succeed: ‘Leading the Way’.
Since launching last year, this initiative
has received external accreditation,
underscoring its quality and value
in fostering professional growth.
We also launched ‘Licence to Recruit’
– a training programme to support
inclusive hiring and enhance manager
skills across our global operations.
Additionally, our ‘Great to Be’ campaign
has been instrumental in connecting
employees with topics that matter,
helping to create a supportive and open
culture within IAG Cargo.
Our customers
Our vision to be a leading logistics
business, trusted to deliver, is built
on a foundation of innovation and
transformation. This vision is supported
by continuous investment ensuring our
customers benefit from advancements
that enhance their experience.
In 2024, we implemented a market-
based pricing system to better align
our offerings with real-time market
dynamics. While the initial rollout
presented challenges, the system is now
delivering measurable benefits.
Customers now enjoy up-to-date market
rates and the flexibility of fixed
discounts, enhancing both efficiency and
transparency in our pricing operations.
Operational excellence remains central
to our ability to meet and exceed
customer expectations, and this year
we achieved several key milestones that
further strengthen this commitment:
• The redesign of our sales platform,
offering customers new features
such as track and trace and airway
bill selection
• The implementation of a new revenue
management system, which ensures
better forecasting, optimises our
planning and delivers a better
performance for customers
• 45% uplift in temperature-controlled
capacity at a new perishables facility
at our Madrid hub, resulting in a 20%
increase in tonnage transported
in year one
• A new operations control centre
at London Heathrow to manage
operations more precisely, which
enables quicker issue resolution and
enhances the customer experience
• The installation of a state-of-the-art
equipment diagnostic system
to increase resilience at Heathrow
All these innovations have been part
of a five-year modernisation programme
to deliver a fully digital customer journey
spanning network, software,
infrastructure and mechanical systems.
We have doubled the size of our IT
and digital team to support this
transformation.
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Trusted
to deliver
Our planet
In 2024, we made significant strides
towards reducing our environmental
impact and building a more sustainable
business. Central to this effort is our
commitment to minimising waste,
reducing emissions and adopting
innovative solutions to achieve our
sustainability goals.
A waste reduction programme
combined with a shift toward circular
practices has reduced disposal
contributions and increased material
reuse across our operations.
At Heathrow, our newly implemented
reuse policy has driven a 10% reduction
in waste compared to last year,
representing a substantial improvement
to smarter waste management.
In addition to tackling waste, we have
accelerated our transition to more
renewable energy solutions. In London,
160 ground vehicles have switched
to hydrotreated vegetable oil (HVO),
reducing lifecycle emissions by up to
90% compared to conventional diesel.
In Madrid, we replaced over 50 forklifts
with efficient, environmentally friendly
vehicles powered by lithium-ion
batteries, further reducing our
carbon footprint.
New customer agreements have
strengthened our Sustainable Aviation
Fuel (SAF) Scope 3 programme,
including the largest airline Scope 3
agreement to date. Our new agreements
in 2024 enable an additional 56,000
tonnes of SAF, reducing lifecycle
greenhouse gas emissions by over
190,000 metric tons of CO2e, the annual
equivalent of replacing three Boeing
747-400s with Airbus A350-1000s.
These initiatives are crucial steps
in embedding sustainability across
our operations and bring us closer
to achieving our Group goal of net
zero emissions by 2050.
Looking forward
Modernisation, strategic partnerships,
digital innovation and operational
resilience remain the foundation for
future growth and strengthen our
proposition as a trusted partner.
Despite ongoing global events that
require our strategy to remain agile,
our purpose is clear, and we have
reimagined our vision to reflect this:
‘Trusted to Deliver’.
This is not just a strapline; it is a firm
commitment that embodies our focus
as we build a strong, future-ready
business with a focus on delivering
value for our customers.
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We transitioned 160 ground vehicles
to HVO, a sustainable alternative to diesel.
We added 45% of additional temperature-
controlled capacity at a new perishables
facility at our Madrid hub.
Our 'Great to Be' campaign has
been instrumental in connecting
employees with topics that matter.
Sustainability
IAG’s vision is to be a world-leading airline group on sustainability.
That means using our scale, influence and
track record to not only transform the
business, but to also support the sector-
wide changes required to make the
aviation industry more sustainable, while
ensuring that relevant policies are effective
and fair for all market participants.
IAG is committed to delivering best
practices in sustainability programmes,
processes and impacts, while executing
Group strategy.
Full details of IAG sustainability information
are provided in the consolidated Non-
Financial and Sustainability Information
statement, referred to as the
‘Sustainability statement’ section
of this Annual Report. The Sustainability
statement complies with Spanish Law
11/2018, of December 28, amending the
Commercial Code, and the consolidated
text of the Companies Law approved
by Royal Legislative Decree 1/2010,
of July 2, Law 22/2015, of July 20,
on Auditing, in matters of non-financial
and diversity information, and Law
5/2021, of April 12, amending Article
49.6.II, fourth paragraph, of the
Commercial Code.
For the disclosure of transitional
requirements outlined by the joint
communication by the CNMV and ICAC
released on 27 November 2024, the
Global Reporting Initiative (GRI
Standards), an international initiative for
sustainability reporting, has been
applied. The statement is prepared
in accordance with the EU Corporate
Sustainability Reporting Directive
(CSRD) on a voluntary basis.
IAG also complies with the 2018 UK
Streamlined Energy and Carbon
Reporting regulation, the Task Force
on Climate-related Financial Disclosures
(TCFD) recommendations, and the
EU Taxonomy Regulation (2020/852).
The Sustainability statement is third-
party independently verified to limited
assurance standards in line with
ISAE3000 (Revised)1 standards.
Environment
highlights
People and prosperity
highlights
Governance
highlights
78.1gCO2
per passenger kilometre, delivering
our 2025 carbon intensity reduction
target of 80.0gCO2/pkm a year early
74,378
people employed across 77 countries
4
meetings of the IAG Safety,
Environment and Corporate
Responsibility Committee
$3.5 billion
total expenditure, including future
commitments, for SAF offtake
as of 31 December 20242
12,166
new hires in 2024
79%
of suppliers covered by spend
evaluated using EcoVadis
sustainability scorecards, which
provide IAG insight into ESG issues
and a baseline for improvements
100%
IAG senior executives have climate-
related remuneration
36%
of senior leadership roles held
by women. We remain committed
to our ambition of 40% by 2025
1st
ranked airline group under the
Transition Pathway Initiative
Management Quality Indicator
Assessment
469,000
tonnes of CO2 saved in 2024 from
the use of SAF, up 197% vly
11%
of UK senior leadership roles held
by individuals who identify as ‘minority
ethnic’3. We have exceeded our
ambition of 10% by end of 2027
109
ESG audits from suppliers received
in 2024, up from 38 in 2023, which
will improve mapping of potentially
high-risk suppliers in the value chain
1
ISAE3000 is the assurance standard for compliance, sustainability and outsourcing audits, issued by the International Federation of Accountants (IFAC).
2 Based on an assumed jet fuel price of $800 per metric tonne and contracted margins for SAF production.
3 UK Parker Review defines ‘minority ethnic’ as Asian, Black, Mixed/Multiple, Other.
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Sustainability
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62
E
S
G
Sustainability leadership KPIs
Our strategy is to pursue the nine KPIs agreed by the Board in 2021.
Clear and ambitious targets
relating to IAG’s most material
issues
Low-carbon transition
pathway embedded in business
strategy
Accelerating progress in low-
carbon technologies including
aircraft technology, SAF, carbon
offsets and carbon removals
IAG has published carbon targets for
2025, 2030 and 2050 and annually
updates its transition plan to achieve
net zero emissions by 2050. IAG also
agreed a sustainability-linked financing
facility in 2024 related to its 2030
carbon efficiency.
Sustainability aspects are included in
three-year business planning for
operating companies.
Sustainability remains a focus area
within the IAG accelerator programme,
Hangar 51.
Management incentives
aligned to delivering a low-
carbon transition plan
Industry leadership
in stakeholder engagement
and advocacy
Industry leadership in the
innovation and deployment of
SAF including power-to-liquids
Over 7,500 senior executives and
managers have 10% of their annual
incentive linked to annual carbon
intensity targets.
IAG holds leadership roles in multiple
trade associations.
As of 31 December 2024, IAG’s
expenditure including future
commitments for SAF offtake
exceeded $3.5 billion.1
Leadership in carbon
disclosures
Stepping up our social
commitments including on
diversity, employee engagement
and sustainability as a core value
Investing in innovation
in low-carbon technology
IAG participates in the Carbon Disclosure
Project (CDP), Sustainalytics, and Transition
Pathway Initiative (TPI) management
quality indicators assessment. Under TPI’s
new beta methodology, IAG has been
assessed as having the highest level of
management quality in 2024.
IAG continues to invest in careers
and development, has seen continuing
momentum on building healthy
organisational cultures and has achieved
36% of senior leadership roles held
by women.
British Airways signed a deal to
purchase 33,000 tonnes of carbon
removal credits under a partnership with
CUR8, Standard Chartered and UNDO,
to demonstrate our commitment to
support the scale-up of Greenhouse Gas
Removal (GGR) technologies.
Timeline of our key action to date
A leader in aviation’s efforts to deliver net zero emissions by 2050
IAG continues to play a key role in driving sustainability action in the aviation sector.
Oct 2019
Feb 2020
Sept 2020
Feb 2021
Oct 2021
IAG becomes first airline
group to commit to net
zero emissions by 2050
Sustainable aviation
roadmap and
commitment is launched
oneworld commitment
to achieve net zero
emissions by 2050
A4E develops net zero
emissions roadmap and
makes commitment to
net zero emissions
IATA commits to net
zero emissions by 2050
Oct 2022
Apr 2023
Nov 2023
Feb 2024
July 2024
ICAO commits to long-
term aspirational goal
to deliver net zero
emissions by 2050
The EU announces
an ETS allowance
mechanism to support
SAF utilisation
ICAO commits to a 5%
reduction in greenhouse
gases through the use
of SAF by 2030
IAG becomes chair of
the Aviation Taskforce
of the Sustainable
Markets Initiative
The UK Government
commits to a revenue
certainty mechanism
to support SAF supply
Advancing innovation in carbon reductions
Sept 2019
Oct 2020
Jan 2021
Mar 2021
A sustainability category
is added to the Group’s
accelerator programme
IAG becomes a founding
member of Coalition
for Negative Emissions,
supporting carbon removals
IAG secures first aviation
sustainability-linked loan linked
to ESG targets, via British
Airways
IAG invests in hydrogen aircraft
(ZeroAvia)
Nov 2022
Feb 2024
Sept 2024
Nov 2024
British Airways offers carbon
removals to customers
IAG signs its largest SAF
purchase agreement with
Twelve, an e-SAF producer
British Airways contracts to
purchase more than £9 million
of innovative carbon removals
IAG signs agreement with
Infinium to provide e-SAF
from 2026
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63
1
Based on an assumed jet fuel price of $800 per metric tonne and contracted margins for SAF production.
2024 has been another
very important year on
our journey to be both
among the industry
leaders in sustainability
and delivering progress
towards our ambition
to achieve net zero
emissions by 2050.
Delivering emission reductions
towards our climate targets
Since becoming the first airline group
in the world to set a goal of net zero
emissions by 2050, in 2019, IAG has
been publishing updates to its roadmap
every year.
Key measures to reduce our emissions
are set out under IAG’s Flightpath net
zero strategy. These include fleet
modernisation, SAF usage, market-
based measures (through participation
in the UK Emissions Trading Scheme,
EU Emissions Trading Systems (ETS)
and Carbon Offsetting and Reduction
Scheme for International Aviation
(CORSIA)), and purchase of carbon
removals to cover residual emissions.
IAG is on track to deliver its climate
targets, to reduce Scope 1 net emissions
from direct operations by 20% in 2030,
achieve a 20% reduction in Scope 3
emissions from the value chain by 2030
and deliver net zero emissions by 2050.
Emission-reduction initiatives are
delivered in collaboration with key
stakeholders, and IAG is proactively
advocating for government policies and
technology development to support its
2030 and 2050 goals.
In 2024, IAG achieved a carbon intensity
of 78.1gCO2 per passenger kilometre
(pkm), exceeding our 2025 target
of 80.0gCO2/pkm). This is a 13%
improvement on 2019 levels
(89.8gCO2/pkm).
Key contributors to this achievement
include the increase in the use of SAF
to more than 162,000 tonnes (up 203%
on 2023), operational efficiency initiatives
(which increased annual emission
reductions by 32% on 2023 levels)
and the introduction of 19 new aircraft
to the fleet, which reduce emissions
compared to the aircraft they replace.
IAG also continues to drive internal
action by using climate-related annual
incentives for over 7,500 senior executives
and managers across the Group, and our
operating companies tailor these targets
so that they are relevant for their direct
operations. British Airways launched its
‘One million tonnes’ initiative in 2024,
which aims to save one million tonnes
of CO2 through employee engagement
activities by 2030.
IAG Scope 1 emissions roadmap to net zero
million tonnes CO2 (MT)
IAG regularly reviews its transition plan
to deliver net zero emissions by 2050.
Changes to our roadmap focus on
delivering SAF against mandated
requirements in the UK and EU in
the short term and increasing our
investment in carbon removals before
2030. Beyond 2030, it maintains an
assumption that hydrogen aircraft will
be introduced to the fleet from 2040,
and 5% emissions saving from airspace
modernisation will be achieved by 2050.
Less than 10% of the emissions
reductions between 2019 and 2050
are expected to come from offsets.
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64
E
8.4
31
27
27.2
24.1
New aircraft and operational efficiency
Sustainable Aviation Fuels
Removals
ETS/CORSIA
Net emissions
Gross emissions
Demand growth
IAG net zero target
2024 gross emissions
2024 net emissions
2019
2025
2030
2035
2040
2045
2050
19%
40%
41%
Percentage CO2 reductions
(SAF is 70% of fuel in 2050)
IAG interim targets include: 11% improvement in fuel efficiency 2019-2025, 20% drop in net Scope 1 and 3 emissions 2019-2030, 10% SAF in 2030, net zero by 2050.
More details on our sustainability
programme, including our transition
plan, is available in the Sustainability
statement at the end of this
Annual Report.
Working with pathway initiatives
IAG supports the 1.5°C ambition of the
Paris Agreement. Our net zero by 2050
target has been independently assessed
by the Transition Pathway Initiative (TPI)
as aligned to the 1.5°C ambition of the
Paris Agreement, and our near-term
20% net emissions reduction target by
2030 has also been assessed as well
below 2°C.
IAG continues to review the evidence
on aviation pathways that support
this ambition and is engaging with
relevant stakeholders, including the
Science Based Targets initiative (SBTi)
and International Organization for
Standardization (ISO), to build
an understanding of aviation industry
pathways to net zero, how these
contribute to national and global
goals, and how companies and
policymakers can drive investment
into the low-carbon transition.
Delivering on our SAF
commitments
Sustainable Aviation Fuel (SAF) is the
main term used by the aviation industry
to describe a non-conventional (fossil
derived) aviation fuel. SAF is the
preferred IATA and ICAO term for this
type of fuel although when other terms
such as sustainable alternative fuel,
sustainable alternative jet fuel,
renewable jet fuel or biojet fuel are used,
in general, the same intent is meant.
‘Biofuels’ typically refers to fuels
produced from biological resources
(plant or animal material). However,
current technology also allows fuel to
be produced from other alternative
sources, including non-biological
resources; thus this generic description
is used.
The chemical and physical
characteristics of SAF are almost
identical to those of conventional jet fuel
and they can be safely mixed with the
latter to varying degrees, use the same
supply infrastructure and do not require
the adaptation of aircraft or engines.
Fuels with these properties are called
“drop-in fuels” (i.e. fuels that can be
automatically incorporated into existing
airport fuelling systems). This definition
is available on the IATA website.
The feedstocks for these fuels – currently
waste materials such as municipal waste
or waste wood – absorb CO2 in their
growth cycle before this carbon is
recycled into fuel and then emitted
during the flight. SAF produces similar
levels of carbon dioxide to conventional
aviation fuels when burned, but the
carbon dioxide generated is already part
of the carbon cycle and is not extracted
from the ground specifically for creating
aviation fuel. This means that using SAF
results in a reduction in carbon
emissions compared to the traditional
jet fuel it replaces over the lifecycle
of the fuel.
Globally, there are eight certified
pathways to making SAF based on use
of specific technologies and feedstocks.
These processes are certified to
international standards to ensure the
fuels are safe to use. IAG requires its
SAF to comply with strict certification
schemes, such as ensuring the
feedstocks come from sustainable
sources, and that the production
processes conserve water and energy
and have minimal wider impacts.
In 2021, the Group set a target of
using 10% SAF by 2030, dependent
on appropriate government policy
support. IAG continues to make
purchase agreements to secure new
and innovative SAF production capacity,
catalysing the wider development of the
SAF market.
As of 31 December 2024, our total
expenditure including future
commitments for SAF offtake exceeded
$3.5 billion, based on an assumed jet fuel
price of $800 per metric tonne and
contracted margins for SAF production.
This expenditure includes securing more
than one-third of the SAF required
to meet IAG’s 10% SAF by 2030 target.
For SAF produced from other pathways,
the Group is also working to support
projects that remove carbon or capture
and store it. IAG’s airlines used more
than 162,000 tonnes of SAF in 2024, an
increase of 203% versus 2023, and one
of the highest volumes globally. This
saved more than 469,000tCO2.
Advancing SAF policy support
Following the successful implementation
of SAF mandate legislation by both the
UK and EU in 2024, which became
effective in 2025, IAG recognises that
appropriate SAF policies are urgently
needed to provide a strong investment
signal to scale up supply to meet sector
demands. Our work in 2024 has focused
on supporting the work of the UK
Government in its development of a
revenue certainty mechanism (RCM) to
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65
Infinium
In November 2024, IAG announced
a purchase agreement with e-SAF
producer Infinium, which plans to
supply SAF from 2026. The e-SAF
will be produced at Infinium’s Project
Roadrunner facility, pictured above,
based in the US state of Texas.
Twelve
In February 2024, IAG signed its
largest SAF purchase agreement
with Twelve, a SAF project based
in the US state of Washington,
which produces e-SAF, made from
CO2, water and renewable energy.
LanzaJet: Freedom Pines
Supported by investment from
British Airways, in January 2024
LanzaJet opened the world’s first
production plant dedicated to low-
carbon ethanol SAF in Georgia, USA.
support SAF production and the technical
details of the EU ETS SAF allowances
programme, which rewards SAF
utilisation in the EU ETS by enabling
airline operators to claim emission
allowances aligned to the cost difference
between SAF and jet kerosene.
Scaling carbon removals
Carbon removal solutions extract CO2
already in the atmosphere and store
it in biological or geological ways.
IAG is committed to only using carbon
removals to mitigate any residual
emissions from its operations by 2050.
IAG also expects to use carbon removals
to meet an increasing share of its CORSIA
obligations between 2025 and 2035,
conditional on appropriate policy
support. IAG supports wider guidance
on how to transition to removals, such
as that provided by the Oxford
Offsetting Principles.
Our investment in greenhouse gas
removal (GGR) technologies involves
a combination of forward delivery
procurement and project financial
support, facilitating the scale-up of
GGR technologies alongside relevant
government support.
Policy advocacy and
stakeholder engagement
The aviation industry will only reduce
carbon emissions faster with stakeholder
and policy support. The Group and its
airlines regularly engage with key
stakeholders – governments and
regulators, shareholders, lenders and
other financial stakeholders, trade
associations, customers, suppliers,
employees, communities, NGOs and
academic institutions to advocate for
support for emissions reductions and to
share progress on Flightpath net zero.
Internal governance ensures that wider
stakeholder engagement on climate
change is consistent with material issues
and environmental goals. Please see our
Sustainability statement for more details
on sustainability governance at IAG.
Policy advocacy
Aviation is a global industry, and
IAG remains committed to supporting
cost-effective approaches to work
towards net zero emissions by 2050.
The Group continues to advocate for
carbon reduction policies for the sector
that are effective and fair for all
market participants.
IAG has positively influenced outcomes
by contributing expertise and time to
drive net zero targets and create and
support roadmaps to net zero emissions
across Sustainable Aviation (SA),
Airlines4Europe, oneworld, UK
Government’s Jet Zero Taskforce (JZT),
and Air Transport Action Group (ATAG).
IAG and key trade associations are listed
on the EU Transparency Register.
IAG believes that the industry has an
essential part to play in tackling the
causes and impact of climate change.
If the climate-related positions of
trade associations are deemed to be
substantially weaker or inconsistent
with this stance, IAG representatives
take roles on task forces and working
groups and respond to consultations
to communicate our position and
constructively move to alignment.
For example, IAG has demonstrated this
action through its work to encourage
higher SAF ambitions across the JZT,
oneworld and World Economic Forum.
In 2024, IAG supported policymakers
to develop policy support mechanisms
that will accelerate the scale-up of SAF
production and enable cost-efficient
deployment by airlines (see the Advancing
SAF policy support section). IAG also
welcomed the decision made by ICAO
and its member states at the third ICAO
Conference on Aviation Alternative Fuels
(CAAF/3) in 2023, to strive to achieve
a global aspirational vision to reduce CO2
emissions in international aviation by 5%
by 2030 through the use of SAF, low-
carbon alternative fuels (LCAF) and other
aviation clean energies.
On carbon pricing, IAG supports fair,
global carbon pricing for the aviation
sector as a key instrument to determine
both the pace of emissions reductions
for the aviation industry and the balance
of in-sector and out-of-sector
reductions. We advocate for the use
of greenhouse gas emission removal
technologies in carbon markets, by both
natural and engineered means, and
responded to the UK’s consultation on
inclusion of GGRs in the UK ETS in 2024.
Sustainable Markets Initiative
In February 2024 IAG CEO Luis Gallego
was appointed the chair of the
Sustainable Markets Initiative’s (SMI)
Aviation Industry Task Force. SMI is
comprised of more than 250 global
CEOs across the private sector and
seeks to drive collective action towards
a sustainable future in line with the
Terra Carta. As stated on the SMI
website, the Terra Carta is a charter that
aims to reunite people and planet, by
giving fundamental rights and value to
nature, and ensuring a lasting impact for
this generation. The Terra Carta Seal
(pictured below) recognises global
companies that are actively leading the
charge to create a climate and nature-
positive future.
Under IAG’s leadership, the SMI Aviation
Task Force is delivering work to
accelerate the use of SAF by 2030,
alongside supporting workstreams that
will develop the use of transformative
technology and fuels and improve
contrail management.
Reducing the impact of non-
CO2, noise and air pollution
Non-CO2 climate impacts
IAG is supporting ongoing research
and development of mitigations for
the non-CO2 effects of aviation. This
includes participating in the UK Jet Zero
Council’s non-CO2 working group, and
supporting research by the Rocky
Mountain Institute (RMI). The Group’s
airlines already participate in several
non-CO2 research projects.
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66
British Airways carbon removals
partnership
In 2024, British Airways signed a deal
to purchase 33,000 tonnes of carbon
removal credits under a partnership
with CUR8, Standard Chartered and
UNDO, as part of a broader £9 million
purchase of carbon removals credits
in the UK and overseas. This deal,
as part of a six-year agreement, is a
demonstration of our commitment to
support the scale-up of greenhouse gas
removal (GGR) technologies and
accelerate our climate change efforts
between now and 2030. Pictured
above is one of the projects called
Carbon Removers, which captures
biogenic CO2 at a distillery in Scotland,
to store it within construction materials.
Noise and air pollution
IAG remains committed to reducing the
impact of aircraft noise and air pollution
on local communities near airports and
supports innovation as a means of
delivering this. Noise and air quality
performance are monitored using
national databases and global aircraft
noise standards. IAG has delivered a 15%
reduction in noise per take-off and
landing cycle (LTO) versus 2019, owing
to the use of newer, quieter aircraft
compared with the aircraft they
replaced. IAG’s airlines adopt
operational practices to minimise noise
impacts, such as the use of continuous
descents. They engage with
stakeholders such as regulators and
industry partners to understand their
concerns and participate in research and
operational trials to identify and refine
solutions.
Waste reduction and recycling
IAG has one of the most comprehensive
waste reduction plans in the airline
industry. Our priorities include reducing
food waste and eliminating the use
of single-use plastic (SUP), in addition
to increasing recycling across our
operations. IAG remains committed
to delivering our ‘5 by 2025’ plan, which
was launched in 2021 and covers five
waste streams and five business units,
using 2019 figures as the baseline for
our targets. The plan includes waste
generation and recycling targets across
on-board, office, cargo and maintenance
waste, and a zero-based approach
to SUP. IAG is committed to reducing,
reusing and recycling waste and
dealing with any hazardous waste
in line with relevant national and
international regulations.
Our priorities in 2024, delivered through
our Waste Working Group, have focused
on on-board services, which are the
main source of waste. Key outputs
include sourcing replacement products
for plastic packaging and recycling
leftover food waste, drinks cans and
cabin items such as wrappers. Waste
is typically offloaded and processed
at airports by third-party caterers, with
some materials recovered on-site and
other materials incinerated or sent to
landfill. The majority of cabin and
catering waste is processed at IAG’s
hub airports – Barcelona, Dublin, London
and Madrid – although the Group flies
to over 200 airports worldwide.
In 2024, IAG operations generated 52.8kt
of waste (up 0.3% versus 2023),
reflecting an increase in employees
based in corporate functions (and the
resulting increase in office use compared
to 2023), along with an increase in on-
board waste consistent with increasing
flying activity. We recovered or recycled
6.8kt (13%). Refer to the Sustainability
statement for more information.
Biodiversity, nature and illegal
wildlife trafficking
Biodiversity was not identified as a
material issue for IAG in its 2024 double
materiality analysis; however, the
Group’s operating companies consider
the impact on biodiversity from their
operations and within the value chain.
Our actions focus on issues including
eradicating illegal wildlife trafficking on
aircraft and engaging across our value
chain in the ground travel and tourism
sector to understand the impacts on
local biodiversity.
IAG is proud to support United for
Wildlife (UfW) to tackle illegal wildlife
trafficking on aircraft. All IAG airlines are
signatories to the Buckingham Palace
Declaration, which aims to reduce the
illegal trade of wildlife. In 2024, British
Airways Holidays completed a nature
impact assessment aligned to the UN
Global Biodiversity framework, and
Iberia performed a preliminary analysis
of biodiversity impacts aligned to the
principles of the Taskforce for Nature-
related Financial Disclosures (TNFD).
Vueling also achieved the IATA
Environmental Assessment (IEnvA)
illegal wildlife trafficking module
certification. In November, Jonathon
Counsell, IAG’s Group Sustainability
Officer and Chair of the UfW Transport
Taskforce, discussed the issue with HRH
Prince William and introduced him to
key members of the taskforce at the
annual UfW summit.
Environmental management
IAG is committed to improving our
environmental performance and
complying with recognised standards
in our sector for environmental
management on material issues
identified in this report. All Group airlines
were fully certified under the IEnvA
standard in 2024, which is equivalent
to ISO 14001, in all our flight operations
and corporate buildings, complying with
the core scope defined by IATA. British
Airways and Iberia have extended
the certification to their maintenance
activities at hub airports and, in the case
of Iberia, to its handling services at
Madrid airport. Southern Europe Ground
Handling Services (SOUTH) also hold
an ISO 14001 certification in all the
airports at which it operates, with the
aim of guaranteeing that an
environmentally responsible service is
provided to its customers. As per IEnvA
certification requirements, all operating
airlines hold an environmental policy
signed by their corresponding CEOs.
In line with our commitment to
supporting a more responsible supply
chain, British Airways and Iberia respond
annually to the EcoVadis questionnaire.
EcoVadis is a provider of business ESG
ratings, by giving a view of
environmental, social and governance
issues within participating companies.
The response to this questionnaire is
supported by the Group’s policies and
practices, such as supplier engagement
policies administered by IAG Global
Business Services (GBS), which also
allows us to identify points of
improvement to annually improve
the score of all Group airlines.
IAG third-party ESG assessments
and awards
The Group continues to provide
evidence to support third-party ESG
disclosures and rating assessment
frameworks. Our 2023 response to the
Carbon Disclosure Project (CDP) is
available on our website, and IAG
continues to participate in the Transition
Pathway Initiative (TPI), which assesses
600 companies across 47 countries
on their readiness for the low-carbon
transition. In November 2024, TPI also
recognised IAG as having the highest
quality level management of its
greenhouse gas emissions and risks and
opportunities related to the low-carbon
transition. IAG assesses its position
as the leader among 38 other airlines
who participate in the programme.
IAG is also in the top 10% of airlines
assessed by Sustainalytics, which gives
ESG risk ratings to around 15,000
companies worldwide based on public
disclosures. IAG was also awarded 2024
Eco-Airline of the year by Air Transport
World for a best-in-class SAF
programme and the Airline Strategy
‘Airline Business of the year’ award for
the Group’s ESG leadership.
Awards and partnerships
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67
The IAG model empowers each operating company to deliver for its customers and people - with each being responsible for
managing recruitment, pay and conditions for their colleagues, as well as careers and development. Centrally we set the ambition,
define frameworks and facilitate sharing of best practice across operating companies and businesses, with a focus on leadership,
talent, diversity and culture.
We have increased headcount levels across our operating companies to fully support our business and operations. As we progress
on our transformation journey we have focused on enhancing the resilience and flexibility of our workforce across the Group and
making transformative changes in our businesses.
IAG continues to invest in careers and development, remains committed to achieving our diversity and inclusion ambitions and
has seen continuing momentum on building healthy organisational cultures.
Key metrics and progress
Relevant standards: GRI 2-8, 401-1, 405-1
Workforce composition
at 31 December 2024
Headcount by geographical location
at 31 December 2024
Progressing on our transformation
journey
We continue to progress on our
transformation journey and have made
significant changes to our business and
organisational structures. Notable
changes include the launch of SOUTH
– our new ground handling services
company – which started operations
mid-May, changes in Iberia, Vueling
and LEVEL CEOs, and the establishment
of an AOC (Air Operator Certificate)
for LEVEL.
Investing in senior leadership
Investing in senior leadership has been,
and will continue to be, key to driving
our transformation. We continue
to invest in the bench-strength and
diversity of senior leadership. Our focus
on succession planning and talent
management has supported these
changes and provided development
and progression opportunities for talent
across the Group.
Continued focus on our culture
Across the Group we are united by
our shared purpose to connect people,
businesses and countries and our
common values of ambition, teamwork,
innovation, pragmatism, efficiency and
responsibility. Each operating company
and business has its own unique culture
and values, enabling each to deliver
on its brand promise and customer
experience, with people policies set
locally to deliver attractive and inclusive
colleague experiences that underpin
broader business strategy and
operational performance.
Each operating company continues
to focus on engagement, listening and
acting on colleague feedback, and
utilises a number of channels to enable
this. In addition to specific initiatives
to measure employee satisfaction and
engagement, IAG runs a twice-yearly
OHI survey to benchmark management
practices against a global framework
and track progress on the development
of culture in each business. Insights
are used to shape broader people and
transformation plans and priorities.
Health, safety and wellbeing
The health, safety, security and
wellbeing of our workforce, our
customers and suppliers is a shared,
everyday commitment – whether
in the sky or on the ground. We are
proactive in following all applicable
safety and security laws, regulations
and procedures. We continue to focus
on and invest in the health and wellbeing
of our colleagues – physical, mental
and financial.
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Sustainability Statement
Sustainability continued
People
International Airlines Group | Annual Report and Accounts 2024
68
22%
33%
23%
10%
12%
European countries
39,318
24,030
5,323
1,360
United
Kingdom
Spain
Ireland
Rest of
Europe
North America
945
â -1%
Europe
70,031
á 3%
Latin America
and Caribbean
328
á 1%
Africa, Middle
East and South
East Asia
2,831
á 12%
Asia Pacific
243
â -1%
S
n Airport operations
n Cabin crew
n Corporate
n Maintenance
n Pilots
Focus on cadet programmes
Each airline is looking at increasing the diversity of its pilot populations through talent attraction and recruitment practices,
as well as school engagement and outreach programmes. In 2024, over 230 cadet pilot training positions were opened across
Aer Lingus, British Airways and Iberia - all provide financial support, removing barriers to entry and making the opportunity
to become a pilot more accessible.
Training and development
We continue to invest in the skills of
our workforce and remain committed
to professional and career development,
supporting colleagues in their daily work
and in preparing for future skills such
as digitalisation and AI, and customer
and product investments.
IAG is committed to supporting the
development of the regions and
communities in which we operate:
creating jobs, investing in infrastructure,
and contributing to social and
environmental causes. Our operating
companies engage young people in
employment, build their skills, prepare
them for potential careers and attract
talent into the aviation sector – through
work experience placements,
internships, apprenticeships and
graduate programmes. In many cases,
these also open up a range of entry
routes for diverse talent.
All operating companies run mandatory
corporate training courses on topics
such as the code of conduct, compliance
with competition laws, anti-bribery and
corruption compliance, and data privacy,
security and protection. Details of this
training are provided in the
Sustainability statement.
Remuneration
Operating companies are responsible
for reward frameworks and terms and
conditions, aligned to local markets and
roles to ensure they remain sustainable
and competitive in attracting the best
talent. Around 85% of employees are
covered by collective bargaining
agreements. Senior leader remuneration
balances fixed pay with variable pay and
long-term incentives to align leadership
compensation with performance and
achievement of long-term strategic
goals. Senior leader remuneration
decisions take into account
performance, market competitiveness
and broader workforce experience.
Social dialogue
Our operating companies actively
engage with trade unions to secure
balanced agreements, ensuring fair and
competitive remuneration. Local
employee representatives and unions
provide formal channels for collective
agreements as well as informal channels
for raising issues and concerns.
Additionally, the IAG European Works
Council (EWC) facilitates information
sharing between employees and
management on transnational
European matters.
Community giving
In 2024, IAG raised €9.5 million for
charitable causes across the Group, 27%
more than in 2023. Of this, €3.4 million
came from customer contributions, €3.9
million from company donations, €1.6
million from employee contributions,
and €0.6 million from in-kind donations.
These funds continue to significantly
contribute to the economic and social
improvement of local communities. They
represent a tangible commitment to
supporting initiatives that address key
social and economic challenges, such as
poverty alleviation, education
enhancement, healthcare provision and
environmental sustainability, within the
communities served by IAG. Group
operating companies have partnerships
with a range of organisations including:
• Disasters Emergency Committee (UK)
• Flying Start (UK)
• Save the Children (Spain)
• Lovaas Foundation (Spain)
• Dublin Pride (Ireland)
• Special Olympics (Ireland)
• Business vs Smog (Poland)
• Noble Gift (Poland)
• UNICEF (global).
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69
Equity, Diversity and Inclusion (EDI)
IAG has an ambition for our businesses
to reflect the diversity of the
communities we live and work in and
to create a healthy and inclusive
environment where individuals feel a
true sense of belonging and in which
their unique differences are valued.
We believe diversity is key to innovation
and the future growth and success of
the Group, and we celebrate and benefit
from this richness of backgrounds,
experiences, cultures and ideas.
Across the Group we are committed to:
• Championing inclusivity – promoting
a culture of inclusion where everyone’s
unique difference is recognised
and valued
• Respect – promoting work
environments in which people neither
discriminate nor are discriminated
against, but instead treat all
individuals with dignity and respect,
regardless of age, sex, disability, race,
religion/belief, marital/civil partnership
status, pregnancy and maternity,
sexual orientation, gender or any
other protected characteristics
• Equal opportunities – monitoring
the composition of our workforce for
diversity and inclusion and ensuring
the principles of IAG’s equity, diversity
and inclusion policy are reflected
in the practices of our Group and the
terms and conditions of employment
for colleagues across the Group
• Role modelling – promoting IAG
values and expected behaviours
across the Group, with a particular
focus on role modelling
At the Group level we have placed a
specific focus on diversity of senior
leadership:
• Gender: In 2022, we set a Group-wide
ambition for 40% of our senior
leadership roles to be held by women by
2025. The gender diversity of our senior
leadership is at 36%, reflecting a 6
percentage points increase since 2020.
We remain committed to achieving our
40% ambition. Our Board has a
representation of 45% women, the IAG
Management Committee1 has 30%
women, and 27% of our IAG
Management Committee and Direct
Reports1 are women. Overall, 44% of our
workforce across the Group are women.
• Race and ethnicity: In 2023, we set
a Group-wide ambition for 10% of the
Group's UK senior leadership to be
minority ethnic2 by the end of 2027,
which we shared as part of our response
to the UK Parker Review. In 2024,
11% of our UK Senior Leader Group
self-disclosed as ethnically diverse2
(compared to 6% in 2023). In 2024,
13% of our UK-based IAG Management
Committee and Direct Reports1
identified as ethnically diverse2.
We have Group-wide policies designed
to eradicate discrimination. Operating
companies and businesses review people
processes to ensure they are inclusive
and free from bias, and that recruitment
and selection decisions are open,
transparent and fair and seek applications
from underrepresented groups.
IAG is active in driving EDI across our
industry and in promoting best practice
within our operating companies:
• IAG’s Diversity Panel sees
representatives from all operating
companies sharing best practice
and leading on the co-design and
implementation of new EDI initiatives
that guide us towards our ambition.
• We continue to actively partner with
the Women in Hospitality, Travel and
Leisure (WiHTL) and with the
International Air Transport Association
(IATA). We are committed to
advancing gender diversity as part of
IATA’s ‘25 by 2025’ strategy (a global
initiative to enhance EDI and gender
balance in the aviation sector).
• Across our operating companies and
businesses, employee-led networks
and resource groups and communities
create opportunities to represent the
diverse perspectives and needs of
their workforces. These groups
reinforce local efforts to promote
inclusion and belonging, offer
feedback channels and provide
colleague support. They also raise
awareness and broaden perspectives
through events and communications
designed by colleagues and for
colleagues: celebrating moments
that matter, including International
Women’s Day, Ramadan, Pride,
Black History Month and
Neurodiversity Week.
• Our operating companies and
businesses are committed to
supporting individuals who have
accessibility needs and disabilities
throughout the entire employment
lifecycle – from inclusive recruitment
practices and making reasonable
adjustments during the hiring process,
to fostering an accessible work
environment. Our operating
companies and businesses strictly
adhere to relevant accessibility laws in
our facilities and overall operations.
See the Sustainability statement.
• Our operating companies and
businesses provide a range of support
including assistive technologies,
flexible work arrangements and
ongoing support to create an inclusive
and equitable workplace for all.
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International Airlines Group | Annual Report and Accounts 2024
70
1
The IAG CEO is included in the Board reporting. The IAG Management Committee and Direct Reports segmentation was first introduced in 2024.
2 Minority ethnic as defined by Parker Review – Asian, Black, Mixed/Multiple, Other.
IAG has robust
governance in place
to ensure joined-up
and progressive decisions
on sustainability.
IAG’s sustainability governance helps
ensure that wider stakeholder
engagement is consistent with the
Group’s material issues, environmental
priorities and sustainability goals. An
annual meeting planner for the Board
ensures that sustainability governance
processes fit within the reporting and
disclosure framework of the Group.
The Group’s structure means that each
individual operating company has
a distinct sustainability programme.
These are regularly reviewed to ensure
alignment with the Group sustainability
strategy and principles, KPIs and
engagement plans.
IAG’s activities in 2024
Ethics and compliance
IAG is committed to conducting its
business ethically, responsibly and in full
compliance with all applicable laws and
regulations. The Group strives to foster
a culture of accountability at every level
of the organisation. All directors and
employees are expected to act with
integrity and in accordance with the
laws of countries in which they operate.
As IAG continues to enhance its ethics
and compliance programme, it works
to maintain the highest levels of trust
among all stakeholders. During 2024,
IAG developed and rolled out a new
Ethics and Compliance Charter, with
the purpose of setting out the
framework for managing risks at Group
level and within each operating
company. IAG also introduced a new
framework regulating the creation,
approval, implementation and review
of corporate policies, to ensure
consistency, clarity and alignment of
policies across the Group, reinforcing
our commitment to good governance.
In August 2024, the Board of Directors
approved a revised version of the IAG
Code of Conduct, which defines the
general expectations for ethical conduct
across the organisation and sets out the
principles that govern the conduct of
all directors and employees when
performing their duties. This document
is available on the IAG website.
In December 2024, the Board of
Directors approved a new Human Rights
Policy, emphasising IAG’s commitment
to respecting and promoting human
rights throughout its operations and
value chain. The policy aligns with
international standards, including the
U.N. Guiding Principles on Business
and Human Rights, and outlines our
approach to identifying, mitigating and
addressing human rights risks.
Recognising the importance of shared
values throughout the IAG value chain,
IAG also published a new Third Party
Code of Conduct in December 2024.
Alongside this, in response to the
evolving regulatory landscape and
emerging compliance risks, the Audit
and Compliance Committee also
approved a revised three-year ethics
and compliance plan to be rolled out
across the organisation.
Whistleblowing policy
IAG is committed to encouraging a
culture of speaking up and, therefore,
does not tolerate any retaliation against
individuals using the whistleblowing
channel or contributing to investigations
arising from reports to the whistleblowing
channel. The Code of Conduct and
the ‘Speak Up’ policy explicitly outline
protections for whistleblowers to ensure
that individuals who report concerns
in good faith are protected from
retaliation. The IAG ‘Speak Up’ policy
and the procedure that regulates how
to handle whistleblowing investigations
provide details on how to report
concerns and establish the framework to
ensure a robust and consistent approach
to address issues and take remedial
action whenever necessary. The Audit
and Compliance Committee and
subsequently the Board approved the
revised IAG ‘Speak Up’ policy in 2024.
IAG received a total of 399
whistleblowing reports in 2024 through
its ‘Speak Up’ platform. Each report was
carefully assessed, and all relevant cases
were investigated independently under
the supervision of the Compliance
Officers of each operating company,
in line with IAG ‘Speak Up’ procedures.
The Audit and Compliance Committee
plays a critical role in overseeing and
supporting the Group Head of Ethics
Compliance to lead the IAG ‘Speak Up’
programme, together with the
compliance officer of each operating
company. This ensures that reports are
handled with diligence, confidentiality
and fairness.
To ensure employees have easy access
to relevant compliance policies, these
are published on the intranet page of
each operating company. The Group
continues to prioritise compliance
training as a cornerstone of its ethics
and compliance programme. Employees
across the organisation completed
mandatory training to ensure they are
equipped with the necessary knowledge
to uphold the company’s values and
comply with regulatory requirements.
Further details on compliance training
hours completed are available in the
Sustainability statement.
Anti-corruption and anti-money
laundering
IAG and its operating companies do not
tolerate any form of bribery or
corruption. This is made clear in the
Group Code of Conduct and supporting
policies, which are available to all
directors and employees. An anti-bribery
policy statement is also set out in the
Third Party Code of Conduct.
IAG has in place a Group-wide anti-
bribery and corruption policy aligned
with international anti-corruption
standards, including the UN Convention
Against Corruption. Each operating
company has a Compliance Officer
responsible for managing the anti-
bribery programme in its business.
Compliance teams from across the
Group meet regularly through working
groups and steering groups, under the
coordination of IAG’s Group Head of
Ethics and Compliance. They conduct
annual reviews of bribery risks at
operating company and Group level.
The main compliance risks identified
for 2024 were unchanged from the
previous year and relate to the use of
third parties, operational and commercial
decisions involving government
agencies, and the inappropriate use
of gifts and hospitality. No material
compliance breaches were identified in
2024, as in 2023. There were no relevant
concerns or legal cases regarding
corruption brought against the Group
and its operating companies in 2024,
as in 2023, and management is not
aware of any impending cases or
underlying issues.
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International Airlines Group | Annual Report and Accounts 2024
71
G
Managing risk in an accelerating
change environment
Enterprise risk policy and framework
The Group has an enterprise risk
management (ERM) framework
underpinned by an ERM policy, which
operates in accordance with Spanish
corporate law and governance and UK
corporate governance requirements,
and was approved by the Board in 2023.
This sets out a comprehensive risk
management process and methodology
to ensure a robust identification and
assessment of the risks facing the
Group, including emerging risks. The risk
management framework is embedded
across all of the Group’s businesses.
Enterprise risks are defined as any risk
that could impact the three-year
strategic business plan (‘the plan’).
They are assessed and, if the impact
is above a threshold, plotted on an
enterprise risk heat map, based on
probability and impact.
Consideration is given to changes in
the speed of potential impact and how
principal risks influence other principal
risks to help assess where key
mitigations can have a greater effect
on reducing overall risk to the business.
Risks are also assessed in combining
events where a number of risks could
occur together, particularly in the supply
chain. This process is led across the
Group by the IAG Management
Committee and operating company
management committees supported
by the ERM function.
Although the Group considers enterprise
risks that could impact the plan (defined
as the short term), it also considers
potential risks that could impact over
the medium term of up to five years and
in the longer term, beyond five years.
Risk outcomes are quantified as the
potential cash impact to the plan over
three years.
Non-cash outcomes that could impact
our customers, employees, reputation,
sustainability targets or regulatory
obligations are considered for every risk.
Key controls and mitigations are
documented, including appropriate
response plans. Where risk treatments
require time to implement, short-term
mitigations are assessed and the timeline
to risk mitigation and consequent risk
acceptance is discussed and agreed.
Every principal risk has clear
Management Committee oversight
at the Group level and in each business.
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International Airlines Group | Annual Report and Accounts 2024
72
Principal risks reassessment
In the year management have
undertaken a review of the Group’s
principal risks, to reassess the events
or scenarios, particularly combinations
of risks, that could: have a material
impact on the financial, operational
or reputational performance of the
Group; delay, impact or prevent
delivery of the Group’s strategic
business plan, key targets and
commitments; reduce stakeholder
engagement or cause regulator or
other scrutiny or censure; or result
in adverse consequences for our
customers, employees or third parties.
As a result, the Group now reports
11 principal risks. These are still
grouped into four categories: strategic
risk, business and operational risk,
financial risk including tax, and
compliance and regulatory risks.
Risks are presented alphabetically
with the category of risk shown
against each individual risk disclosure.
The Group’s ERM framework will
continue to adapt and evolve
according to the needs of the business
and our stakeholders. This allows the
Group and its businesses to both
respond to changes in the external risk
environment and support the pace
and scale of business transformation,
in line with the Board’s appetite for risk.
Emerging risks
Where emerging risks and longer-term
threats that the Group or the industry
could face are identified, they are
managed within the overall risk
framework as ‘on watch’ until they are
reassessed to be no longer a potential
threat to the business or where an
evaluation of the risk impact over
the plan period can be made and
appropriate mitigations can be put in
place, or the risk becomes a principal
risk. Other high-impact, low-likelihood
risks are also considered.
During the year, management across
the Group have reviewed the
macroeconomic and geopolitical
landscape to identify emerging risks and
implications for existing principal risks
as well as competition and market risk
changes, particularly those that could
impact operational resilience, our
sustainability ambitions or the Group’s
transformation, innovation and change
agenda. By continuing to develop
the Group’s assessment of the
interdependencies of risks, using
scenarios to quantify risk impact under
different combinations and assumptions,
and considering the risks within the
Group’s risk environment that have
increased or changed in their nature,
either as a result of external factors or
decisions within the Group’s businesses,
its Board and management are better
informed and can react more quickly.
New guidance from regulators and
investors is reviewed on an ongoing
basis and best practice sought from
other risk management sources.
Risk appetite
IAG has a risk appetite framework that
includes statements informing the
business either qualitatively or
quantitatively of the Board’s appetite
for certain risks. Each risk appetite
statement applies either on a Group-
wide basis or for specific programmes,
initiatives or activity within the Group.
In the second half of 2024, the Board
assessed its appetite across a number
of critical strategic priorities to set
tolerances for the Group for the
upcoming plan period, taking account
of changes in the risk landscape since
the prior year’s exercise. This approach
allows tolerances to be set dynamically
and ensures alignment to the Group
strategic priorities as approved by the
Board, which sets the level of ambition
and investment for the plan period.
The exercise allowed the Board to discuss
and consider the trade-offs within the
plan and ensure that it was satisfied that
management had set the appropriate
prioritisation of initiatives to seek
opportunities and manage risk within
its defined appetite tolerances. The
framework and tolerances were in place
throughout the year, with the Audit
and Compliance Committee assessing
appetite across all of the framework
statements at year end against the
Group’s performance and its anticipated
delivery of the Board-approved strategic
business plan priorities and initiatives.
The Board is satisfied that the Group
continued to perform and deliver
initiatives throughout 2024 as planned
to mitigate risk as set out in its
framework statements. Where further
action has been required, the Board has
considered potential mitigations and,
where appropriate or feasible, the Group
has implemented or confirmed plans
that would address those risks or retain
them within the Board’s determined
Group risk appetite. Regular
reassessment and confirmation of the
risk appetite of the Board allows the
Group to take appropriate risks to
deliver the plan.
Viability assessment
The Board’s assessment of the viability
of the Group is directly informed by
the outputs of the ERM framework.
Full details of our approach, scenarios
modelled and the viability assessment
are shown at the end of this report.
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International Airlines Group | Annual Report and Accounts 2024
73
The IAG Board has overall
responsibility for ensuring that
the Group has an appropriate,
robust and effective risk
management framework.
Risk management roles and responsibilities
Risk owners
and management
Operating companies’
management
committees
IAG Management
Committee
IAG Board and Audit
and Compliance
Committee
Across the Group, risk
owners are responsible for
identifying potential risks
and appropriately managing
decisions within their area
of responsibility that could
impact business operations
and delivery of the plan.
As the Group undertakes
transformation activities
within its operating
companies, the pace and
agility of the changes
required create risks and
opportunities. For
transformational risks,
business owners are
assigned, and the business
will agree appropriate
mitigations and timelines for
implementation, following
discussions with all relevant
stakeholders.
Emerging risks are assessed
and risk owners consider and
identify any potential impact
to plans. Longer-term on-
watch risks are subject to
review as part of the
framework.
Management is responsible
for the effective operation of
the internal controls and
execution of the agreed risk
mitigation plans.
Risk heat maps for each
operating company and
central functions are
reviewed biannually by their
operating company’s
management committee or
function leadership team.
Where the Group’s operating
companies rely on other
parts of the Group for
services delivery, risks are
reflected appropriately
across risk heat maps to
ensure accountability is clear.
They escalate risks that have
a Group impact or require
Group consideration in line
with the Group
ERM framework.
They confirm to their
operating company boards
and audit committees, where
they exist, that they have
undertaken the identification,
quantification and
management of risks within
their operating company
at least annually.
Local risk heat maps are
in place for subsidiary
businesses, together with
Group support platforms
including Group Procurement
and Services, and Tech and
Innovation.
The IAG Management
Committee reviews risks
during the year, including
the Group risk heat map
biannually in advance of
reviews by the Audit and
Compliance Committee,
in accordance with the 2018
UK Corporate Governance
Code and the Spanish
Good Governance Code
for Listed Companies.
At the year end, the IAG
Management Committee
reviews the performance of
the Group during the full
year against the risk appetite
framework and reports any
near tolerance or out of
tolerance assessments to
the Audit and Compliance
Committee.
The IAG Management
Committee recommends
severe but plausible
scenarios for stressing the
strategic business plan as
part of the annual Group
viability assessment.
The IAG Board has overall
responsibility for ensuring
that the Group has an
appropriate, robust and
effective risk management
framework, including the
determination of the nature
and extent of risk it is willing
to take to achieve its
strategic objectives.
The IAG Audit and
Compliance Committee
discusses risk and considers
the risk environment
regularly throughout the
year, as does the IAG Board
as part of wider Board
discussions, in addition to
the IAG Audit and Compliance
Committee’s biannual risk
heat map review, including
a review of the assessment
of the Group’s performance
against its risk appetite for
the financial year, scenarios
for assessment of viability
and the outputs from the
viability modelling. The Audit
and Compliance Committee
has early sight of
management consideration
of viability scenarios to
enable it to challenge
subjectivities and confirm
rationale. It then reviews the
outputs at year end and
makes recommendations on
the viability assessment and
statement to the Board.
The IAG Board reviews
the Group’s risk heat map
annually and it has
completed a robust
assessment of the Group’s
emerging and principal
risks in the year.
The IAG Board sets risk
appetite for the plan period.
Enterprise Risk Management
function
The Enterprise Risk Management
function provides support across the
Group to ensure risk management
processes are appropriately
embedded and applied consistently,
as well as working with management
to identify risk, challenge
assessments and strengthen the
risk culture across the Group.
The function provides risk
management guidance and shares
best practice across the Group and
its operating companies, keeping
them informed of any risk-related
regulatory developments. The
function is responsible for ensuring
that the ERM framework remains
agile and responsive to meet the
needs of the business and its
stakeholders.
The ERM function works with other
compliance and Group functions,
such as Group Finance, Government
Affairs, Investor Relations, Legal,
Ethics and Compliance, and
Sustainability, leveraging their
frameworks and assessments where
appropriate. Risk assessments form
an important input into the Internal
Audit planning and delivery process.
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Risk management and principal risk factors continued
International Airlines Group | Annual Report and Accounts 2024
74
Year in review
The highly regulated and commercially
competitive environment, together
with the operational complexity
in the aviation sector and reliance on
critical third parties for provision of
goods and services, expose the Group
to risks, where its influence and ability
to directly manage the risks may
be limited.
Examples include aircraft, engines
and component availability; delays
in airframe and engine manufacturer
production; issues with fleet and
engine performance and reliability;
the wider ongoing fundamental
weaknesses in the resilience of the
supply chain; air traffic control (ATC)
restrictions; underperformance at
airports, particularly constrained
airports; the impact of resource gaps,
industrial unrest or strikes; measures
taken by governments including
protectionism towards domestic
economies, tariff regimes or policy
proposals that could impact the
Group’s airlines’ ability to set capacity
and/or pricing.
External threats which remain
heightened include: the impact of
slowdown in growth, threat of
introduction of tariff regimes, increases
in inflation or interest rates on demand
and customer confidence; higher costs
in the supply chain; and the impact
of escalating and ongoing geopolitical
tensions and conflict in various regions.
All of these could impact our customers
and flight operations as well as
creating further airspace restrictions.
In assessing its principal risks, the
Group has considered operational and
technical resilience across its airlines,
maintenance capacity and specialist
resource requirements; the status of
the financial markets; customer mix
changes and route network adaptation;
political risk and government changes,
including potential policy change
with new governments, pace of
transformation; AI adoption and future
skillset; managing the cost base; the
Group’s industrial relations landscape
and challenges in securing collective
agreements; and people engagement
and securing talent and expertise to
deliver digitalisation, end-to-end domain
transformation and cultural change.
Management have completed a review
of the Group’s principal risks in the
year and recommended to the Board
that the principal risks be reframed
and simplified to improve insight into
the root causes of risk and identify
combining events that could challenge
the Group.
Principal risks influence
The relative level of influence each principal risk has on the
other principal risks
Principal risk radar
The assessed likelihood of risk materialisation for each
principal risk
Key for principal risk factors table
Principal
risk
number
Strategic
imperatives
Category
Stakeholder
impact
Risk
trend
A strong core
Strategic
Customers
Employees
Suppliers
Shareholders,
lenders
and other
financial
stakeholders
Governments
and regulators
Increase
Business and
operational
Stable
Capital-light
earnings growth
Financial
including tax
Decrease
Compliance
and
regulatory
A robust
financial and
sustainability
framework
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International Airlines Group | Annual Report and Accounts 2024
75
Principal risk register
Guidance is provided below on the key
risks that may threaten the Group’s
business model, future performance,
solvency and liquidity.
Risks are grouped into four categories:
strategic risk, business and operational
risk, financial risk including tax, and
compliance and regulatory risks.
Where there are particular
circumstances that mean that the risk
is more likely to materialise, those
circumstances are described.
Additional key business responses
implemented by management are
also set out.
The list is not intended to be
exhaustive but does reflect those
risks that the Board and IAG
Management Committee believe to
be the most likely to have a potential
material impact on the Group during
the plan period.
Principal risk factor table
Principal risk
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability scenario
2024
2023
Brand, customer and competition
Chief Commercial Strategy Officer/
Chief Corporate Development Officer
Critical third parties in the supply chain
Chief Information, Procurement, Services
and Innovation Officer
Data and cybersecurity
Chief Information, Procurement, Services
and Innovation Officer
Economic, political and regulatory
environment
Chief Commercial Strategy Officer/
Chief Corporate Development Officer
Financial risk including tax
Chief Financial and Sustainability Officer
Group governance structure
General Counsel
Operational and IT resilience
Operating company CEOs/Chief
Information, Procurement, Services and
Innovation Officer
People, culture and employee relations
Chief Executive Officer/Operating
company CEOs
Safety and security and other regulatory
compliance
Operating company CEOs/General Counsel
Sustainable aviation
Chief Financial and Sustainability Officer
Transformation, innovation and AI
Chief Information, Procurement, Services
and Innovation Officer
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Risk management and principal risk factors continued
International Airlines Group | Annual Report and Accounts 2024
76
Brand, customer and competition
Chief Commercial Strategy Officer
Chief Corporate Development Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The Group’s brands are positioned in their
respective markets to meet their customer
propositions and deliver commercial value.
Any change in engagement or travel
preferences could impact the financial
performance of the Group.
• IAG will continue to focus on its customer
propositions to ensure competitiveness in its
chosen priority customer demand spaces and
to ensure that it adapts to meet changing
customer expectations.
• The markets in which the Group operates are
highly competitive. The Group faces direct
competition on its routes, as well as from
indirect flights, charter services and other
modes of transport. Some competitors have
other competitive advantages such as
government support or benefits from
insolvency protection.
• The Group is clear on the key levers to improve
brand perception and satisfaction for each
of its operating company brands.
Customer sentiment to travel and their expectations when they travel are
intrinsic to brand health. The Group’s ability to attract and secure bookings
and generate revenue depends on customers’ perception of and affinity
with the Group airlines’ brands and their associated reputation for customer
service and value. Operational resilience and customer satisfaction underpin
customer trust. The Group airlines’ brands are, and will continue to be,
vulnerable to adverse events impacting service and operations, many
of which remain outside the airlines’ control. Reliability and consistency
of service and product delivery, including on-time performance (OTP),
and customer support through disruption, are key elements of brand value
and of each customer’s experience.
The Group continues to improve its disruption management capabilities
and customer communication through each journey in light of the extent
of the ongoing external disruption due to ATC restrictions, lack of resilience
at constrained airports and industry-wide third-party resilience issues,
particularly over aircraft availability and engine reliability. IAG remains
focused on strengthening its customer centricity and all of the Group’s
airlines continue to support their customers through any disruption
including schedule adaptions where required. The resilience and
engagement of our people as customer service ambassadors to deliver
excellent customer service combined with investment in new fleet, cabin
and service propositions, helps ensure that our customers choose to fly
with the Group’s airlines.
The Group continues to ensure that its operating companies adapt and
focus their business models, products and customer propositions to meet
changing customer expectations and needs (including those with additional
needs). The potential for distortionary effects of government policy and/or
aviation-specific taxation or other regional or country-specific measures
on the competitive landscape continue to be monitored. These include
increases in Air Passenger Duty (APD) or fragmented application
of mandates or policies on carbon offsets.
Risk description
Mitigations
• Erosion of the brand and customer trust
through poor customer service or lack
of reliability in operations may adversely
impact the Group’s leadership position with
customers and ultimately affect future
revenue and profitability.
• If the Group is unable to meet the expectations
of its customers and does not engage
effectively to maintain their emotional
attachment, then the Group may face brand
erosion and loss of market share.
• Some of the markets in which the Group
operates remain regulated by governments,
in some instances controlling capacity and/or
restricting market entry. Changes in such
restrictions may have a negative impact
on margins.
• Regulatory or policy changes may create
competitive distortion, impacting the
Group’s airlines and their competitiveness
or business model.
• All the Group’s airlines are considered within the brand portfolio review.
• Brand initiatives for each operating company have been identified and
are aligned to the Group’s business plan.
• Product investment to enhance the customer experience supports the
brand propositions and is provided for in the plan.
• All airlines track and report to IAG on their OTP and Net Promoter Score
(NPS) to measure customer satisfaction.
• Reviews of resilience, resourcing levels and schedule operability.
• Enhanced disruption management tools within airlines to allow customers
to manage their travel preferences.
• Increased focus on the end-to-end customer journey from flight search
through to arrival and baggage reclaim.
• The Group’s global loyalty strategy builds customer loyalty within IAG airlines.
• The Group Strategy function supports the IAG Management Committee
by identifying where resources can be devoted to exploit opportunities
and accelerate change.
• The airlines’ revenue management departments and systems optimise market
share and yield through pricing and inventory management activity.
• The Group maintains rigorous cost control and targeted investment
to remain competitive.
• The Group’s airlines are focused on customer-centricity and operational
resilience.
• The portfolio of brands provides flexibility as capacity can be deployed
at short notice as needed.
• The IAG Management Committee regularly reviews market share and
the commercial performance of joint business agreements.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
77
See the Financial review section
Critical third parties
in the supply chain
Chief Information, Procurement, Services
and Innovation Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• Any sub-optimal service delivery or asset
supplied by a critical supplier can impact the
Group airlines’ operational and financial
performance as well as disrupting our
customers and impacting our brand
and reputation.
• Infrastructure decisions or changes in policy
by governments, regulators or other entities
could impact operations but are outside
the Group’s control.
• The Group relies on the provision of airport
infrastructure and is dependent on the timely
delivery of appropriate facilities. Constraints at
London and other key airports can impact on
the ability to recover from periods of disruption.
• An uncontrolled increase in the planned cost
of expansion of a hub airport, particularly
London Heathrow, could result in increased
landing charges, making the airport
uncompetitive versus other European hubs.
• Airport charges represent a significant
operating cost to the airlines and have
an impact on operations.
• The Group’s airlines are reliant on ATC
infrastructure for flight operations and
increasing ATC restrictions impacts
performance and disrupts our customers.
• Aircraft and engine performance issues can
impact the supply and reliability of aircraft,
engines and components for maintenance.
• Inflationary cost pressures or imposition of
tariffs within the supply chain may increase
the cost of travel.
The aviation sector continues to be affected by global supply chain
disruption, which has impacted new aircraft deliveries; engine and
component availability and reliability; resource availability and/or threat
of industrial action in critical third parties and airport services; the resilience
of airports, particularly London airports and their ability to adapt to a high
demand environment with increasing airport congestion; and ATC capability
and restrictions, particularly given skillset shortages and weather events.
Weaknesses in aircraft and engine production have caused industry-wide
delays in deliveries of new fleet and lack of spare engines. Prolonged
recovery timelines continue to impact the Group’s airlines’ ability to deliver
flight schedules as planned. Lack of component parts also combines with
delays in new aircraft and spare engines, and technical performance issues
requiring additional maintenance that continue to impact operations,
delays aircraft maintenance and turnaround times for aircraft.
Additionally, any imposition of extensive new tariff regimes could result
in further stress on the global supply chain, particularly for aircraft and
engine production, or create inflationary cost environments.
The Group proactively assesses its schedules for operability and continues
to work with all critical suppliers to understand any potential disruption
within their supply chains caused by either a shortage of available resource,
strike action or production delays which could impact the availability of new
fleet, engines or critical goods or reliability of critical services, particularly
third-party application and network services. This has led to increased costs
to secure such services. Focus has been placed on key suppliers to
understand any business or operational continuity impacts, and where
possible identify other suitable suppliers. The Group continues to be
impacted by reliability and performance issues with Rolls-Royce Trent
1000 and Pratt and Whitney GTF engines, which are mitigated by using
replacement aircraft and invoking remedy support from the engine
manufacturers.
Many elements of the supply chain remain outside of the Group’s ability to
directly manage, including aircraft deliveries and availability of components,
airport performance and ATC resilience.
The Group continues to consult stakeholders and raise awareness of the
negative impacts of ATC airspace restrictions and performance issues on
the aviation sector and economies across Europe, particularly with the
continued closure of airspace driven by geopolitical events. The Group
continues to challenge unreasonable levels of increases in airport charges,
especially at London Heathrow.
Risk description
Mitigations
• IAG is dependent on the timely entry of new
aircraft and the engine performance of aircraft
to improve operational efficiency and resilience
and meet the commitments of the Group
sustainability programme.
• IAG is dependent on the timely, on-budget
delivery of infrastructure changes, particularly
at key airports.
• IAG is dependent on resilience within the
operations of ATC services to ensure that its
flight operations are delivered as scheduled.
• IAG is dependent on the performance and costs
of critical third-party suppliers that provide
services to our customers and the Group,
such as airport operators, border control
and caterers. Increases in costs or where
suppliers face financial stress may impact
the Group’s operations.
• IAG is dependent on the availability and
production of alternative fuels to meet its
carbon reduction commitments. This may
require investments in infrastructure in the
markets in which the Group operates.
• The Group mitigates engine and fleet performance risks, including delays
to delivery and unacceptable levels of carbon emissions, to the extent
possible by working closely with the engine and fleet manufacturers,
as well as retaining flexibility with existing aircraft return requirements
and aircraft lessors.
• The Group engages in regulatory reviews of supplier pricing, such as
the UK Civil Aviation Authority’s periodic review of charges at London
Heathrow and London Gatwick airports.
• The Group is active at an EU policy level and in consultations with
airports covered by the EU Airport Charges Directive.
• The Group proactively works with suppliers to ensure operations are
maintained and the impact to their businesses understood, with
mitigations implemented where necessary and inflation minimised.
• The Group Procurement function has oversight of all critical contracts
across the Group’s businesses.
• Alternative suppliers are identified where feasible.
• Transformation initiatives have been identified to offset inflation.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Risk management and principal risk factors continued
International Airlines Group | Annual Report and Accounts 2024
78
Data and cybersecurity
Chief Information, Procurement,
Services and Innovation Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The cyber threat environment remains
challenging for all organisations, including the
airline industry. Cyber threat actors, criminals,
foreign governments and hacktivists have the
capacity and motivation to attack the airline
industry for financial gain, or other political
or social reasons.
• The fast-moving nature of this risk means
that the Group will always retain a level
of vulnerability.
The risks from cyber threats continue as threat actors seek to exploit any
weaknesses in defences, particularly through social engineering and human
behaviours. The threat of malware attacks on critical infrastructure and
services remains high due to ongoing geopolitical tensions, with the Group
exposed to threat actors targeting IAG, its operating companies and its
suppliers. The Group continues to improve its cybersecurity posture either
through major IT transformational change or additional monitoring tools,
and is focused on better understanding the risk presented by its suppliers.
The regulatory regimes associated with data and infrastructure security are
also becoming more complex with different regulators applying different
framework approaches and guidance for reporting. The Group airlines are
subject to the requirements of privacy legislation such as GDPR and the
Network and Information Systems Directive (NISD).
The emergence and usage of AI to enhance existing tactics, techniques and
procedures (TTPs), produce phishing emails and deploy malware has also
accelerated attempts to access organisations’ systems and data and
increases the threat and scale of social engineering or cyberattacks.
Some use of AI by the Group will be subject to the EU AI Act, which defines
AI systems and sets out a risk-based classification for AI applications.
Investment in cybersecurity systems and controls continues as planned,
although addressing the risk is also dependent on business capacity and the
delivery of solutions to address technical obsolescence across the operating
companies. All planned investment is linked to a Group-wide maturity
assessment based on the National Institute of Standards and Technology
(NIST) cybersecurity framework, a leading industry standard benchmark.
Data centre migration activity to the cloud across the Group’s airlines will
further help to improve the security controls environment. As the Group
improves its security posture and maturity, it better understands the rapid
nature of potential attack vectors and how to detect and respond to them.
Risk description
Mitigations
• The Group could face financial loss, disruption
or damage to brand reputation arising from
an attack on the Group’s systems by criminals,
foreign governments or hacktivists.
• If the Group does not adequately protect
customer and employee data, it could breach
regulations and face penalties and loss
of customer trust.
• Transformation or changes in environments for
the Group’s operating companies and third-
party suppliers could result in new weaknesses
in the cyber and data security control
environment.
• The emergence and usage of AI to bypass
cybersecurity controls, produce sophisticated
phishing campaigns or allow accelerated
deployment of malware could increase the
scale, severity and impact of cyberattacks
and cyber-related fraud.
• The Group fails to meet AI regulations,
particularly as it emerges, from different
geographical regions.
• Lack of accuracy or insufficient human oversight
of AI could increase the risk of data misuse.
• Increased digitalisation and integration with
suppliers could increase the risk of contagion
from third-party breaches or a cyberattack.
• The Group has a Board-approved cyber strategy that drives investment
and operational planning.
• A cyber risk management framework ensures the risk is reviewed across
all operating companies.
• The IAG Cyber Governance board assesses the Group-wide portfolio of
projects quarterly and each operating company reviews its own portfolio
at least quarterly.
• The IAG Chief Information, Procurement, Services and Innovation Officer
provides assurance and expertise around strategy, policy, training and
security operations for the Group.
• External attack surface monitoring and threat intelligence is used to
analyse cyber risks to the Group.
• External benchmarking exercises conducted on cyber posture.
• Regular cyber awareness training is run by the operating companies,
including annual mandatory training on cyber risk and data protection
for all staff.
• Oversight of critical systems and suppliers to ensure that the Group
understands the data it holds, that it is secure, and regulations are
adhered to.
• Data Protection Officers are in place in all operating companies,
coordinated through a Group-wide Privacy Steering Group.
• All suppliers must adhere to IAG security requirements. A Group-wide
third-party risk management process integrates cybersecurity due diligence
into contracting processes to monitor supplier security performance.
• Desktop and simulated exercises conducted to test business response plans.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
79
Economic, political and
regulatory environment
Chief Commercial Strategy Officer
Chief Corporate Development Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
IAG remains sensitive to political and economic
conditions in the markets globally, particularly
in our hub markets. All of the following can be
influenced by political and economic change:
• Business and leisure demand for travel;
• Inflation and interest rate impacts on the
cost base;
• Access to markets for new or existing routes;
• Increasing levels and costs of regulation;
• Constriction in the supply of products;
• Availability of services and/or resource;
• Availability gaps for key technical skillsets;
• Imbalance in the competitive landscape;
• Ability to fly scheduled operations; and
• Pricing and pricing over ancillaries.
Geopolitical risk and uncertainty remains high and wider macroeconomic
events may continue to drive market volatility, impacting demand. The
Group continues to monitor the implications for trade and any imposition
of extensive tariff regimes may disrupt the markets or economic confidence
and drive cost inflation. Increased regulation and political intervention drive
increased levels of cost and impact the ability of airlines to set capacity
and pricing, which may impact the Group’s revenue streams and business
model. The rise of populist governments and government policy globally
sees increased protectionism which could result in market or competitive
distortion and a trend for increased scrutiny from regulators and tax
authorities which could see changes that increase costs to airlines. The tone
of dialogue between the US, Russia, China and the EU and UK which can
influence markets and result in imposition of misaligned policies or tariffs
and any potential impact to the Group is kept under review.
Ongoing conflicts, wars and heightened tensions across the Middle East
and elsewhere continue to cause airspace restrictions and congestion for
flows to Asia.
Recent supply chain disruptions have occurred in many markets and the
level of disruption and potential impacts are considered across the Group.
The Group also considers changes in government in key markets and the
implications for trade, respective economic health and how governments
view the aviation industry, with elections and changes of government in
the UK, Ireland and the US in 2024.
Developments in relevant international relationships, where they affect
air services agreements to which the EU or UK are party, are monitored
throughout the year and the Group’s positions advocated with the relevant
national governments. Recent government proposals to set floor or ceiling
caps on pricing, including the scope of ancillaries that airlines may be
allowed to charge their customers for, may impact the ability to freely
set pricing, sell ancillaries to meet customer needs and/or set capacity.
IAG has worked through trade associations and IATA, as well as national
governments to put its case on issues of the importance of aviation to
international trade and customer connectivity and the value that it brings.
Any further macroeconomic trends or potential requirements arising
from Brexit are monitored by the IAG Government Affairs function.
Risk description
Mitigations
• Economic deterioration or structural change
in either a domestic market, key customer
segment or the global economy may have
a material impact on the Group’s financial
position, while foreign exchange, fuel price
and interest rate movements create volatility.
• Failure to adequately plan for and be able to
respond to uncertainty driven by geopolitical
or market events or health-related concerns
impacts the operations, costs and customers
of the Group.
• Changes in government may result in a change
in sentiment to aviation and access to markets.
• Government policy asymmetry impacting
a domestic market could increase the burden
of regulation and cost to our passengers.
• The IAG Board and the IAG Management Committee review the financial
outlook and business performance of the Group through the monthly
trading results, financial planning process and quarterly reforecasting
process.
• Reviews to assess and drive the Group’s financial performance through
the management of capacity, together with appropriate cost control
measures including the balance between fixed and variable costs,
management of capital expenditure, and actions to improve liquidity.
• External economic outlook, fuel prices and exchange rates are carefully
considered when developing strategy and plans and are regularly
reviewed by the IAG Board and IAG Management Committee as part
of business performance monitoring.
• The Group engages with its regulators, governments and other political
representatives and trade associations to help represent the views
and contribution of the Group and aviation to society and economies.
• The Group’s airlines have increased their focus on enhanced disruption
management tools to increase operational resilience to restrictions,
e.g. capacity constraints at airports or health-related measures.
• The Group’s Government Affairs function monitors government initiatives,
represents the Group’s interest, forecasts likely changes to relevant
laws and regulations and responds to consultations on regulatory
change or policy that could impact the aviation industry or create
competitive distortion.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Risk management and principal risk factors continued
International Airlines Group | Annual Report and Accounts 2024
80
See the Regulatory environment section
Financial risk including tax
Chief Financial and Sustainability Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The Group’s ability to finance ongoing
operations, committed aircraft orders, future
fleet growth plans or acquisitions is vulnerable
to various factors including financial market
conditions, financial institutions’ appetite for
secured aircraft financing and the financial
markets’ perceptions of the future resilience
and cash flows of the Group.
• The volatility in the price of oil and petroleum
products can have a material impact on the
Group’s financial results.
• The volatility in currencies other than the
airlines’ local currencies can have a material
impact on the Group’s operating results,
particularly the US dollar.
• Higher interest rates can have a material impact
on the Group’s operating results.
• Payment of tax is a legal obligation. Changes
in the tax regulatory environment, including
changes in tax rates and interpretation of tax
regulations by tax authorities, may result in new
tax claims or additional tax costs for the Group
and in additional complexity in complying with
such changes.
Access to the secured and unsecured debt markets may be disrupted
by geopolitical and economic uncertainty, impacting funding options and
interest rates available to the Group for new aircraft financing or where
it chooses to refinance debt. Any interest rate increases implemented by
central banks increase the cost for the Group of existing floating rate debt,
as well as for new financing. As at 31 December 2024 approximately 14%
of the Group’s debt, including hedges, was floating rate debt. The Group
successfully raised financing for all aircraft deliveries it sought to finance
during 2024, using traditional long-term aircraft financing arrangements.
The Group’s credit rating with Standard & Poor’s is investment grade
(BBB-), whilst its rating with Moody’s is investment grade Baa3. Fitch rates
British Airways as BBB- investment grade.
Fuel cost volatility driven by geo-political events is partly mitigated by the
Group’s fuel hedging policy. Reduced access to fuel hedging instruments or
the inability to pass increased fuel costs on to consumers could impact the
Group’s profits. The Group continues to assess the strength of the US dollar
against the euro and pound sterling and the potential impacts on the
Group’s operating results. All airlines hedge currency risk in line with the
Group hedging policy.
Tax is managed in accordance with the tax strategy, which can be found in
the Corporate Policies section of the IAG website. The Group has a number
of scheduled tax audits, by local tax authorities, in progress across its
businesses. In the UK, there are ongoing discussions with HMRC on certain
treatments of VAT, which include litigation against HMRC’s consideration
of the appropriate VAT accounting to be applied by IAG Loyalty. Further
information on tax matters, including taxes paid and collected by IAG, is set
out in note 10 to the consolidated financial statements.
Risk description
Mitigations
• Failure to finance ongoing operations,
committed aircraft orders, future fleet growth
plans, business acquisitions and third-party
financial guarantees.
• Higher interest rates in the market, or more
restrictive terms, for new finance arrangements
or refinancing may impact the Group’s floating
finance debt, floating operating leases and cost
base.
• Failure to manage the volatility in the price of oil
and petroleum products.
• Failure to manage currency risk on revenue,
purchases, cash and borrowings in foreign
currencies other than the airlines’ local
currencies of euro and sterling.
• Failure to manage financial counterparties’
credit exposure arising from cash investments
and derivatives trading.
• The Group is exposed to systemic tax risks
arising from either changes to tax legislation
and accounting standards or challenges by tax
authorities on the interpretation or application
of tax legislation.
• Businesses and consumers may be subject
to higher levels of taxation as governments seek
to increase environmental taxes, redesign the
global tax framework and rebuild public finance.
• The IAG Board and Management Committee review the Group’s financial
position and financing strategy regularly.
• The Group has maintained its clear focus on managing liquidity and
ensuring that critical investment in the Group is maintained.
• Maintain strong relationships with banks, lenders and lessors.
• Scenario planning for different financial environments.
• Continuous review of capital structure to minimise interest rate exposure
and lower cost of capital.
• The IAG Audit and Compliance Committee and IAG Management
Committee regularly review the Group’s fuel and currency positions
and other financial contracts.
• All airlines hedge in line with the Group’s hedging policy under the
oversight of Group Treasury.
• All airlines review routes to countries with exchange controls to monitor
delays in the repatriation of cash and/or the risk of material local currency
devaluation.
• The Group has a financial counterparty credit limit allocation by airline
and by type of exposure and monitors the financial and counterparty
risk on an ongoing basis.
• The Group adheres to the tax strategy approved by the IAG Board and
is committed to complying with all tax laws, to acting with integrity in
all tax matters and to working openly with tax authorities.
• Tax risk is managed by the operating companies in conjunction with
the IAG Tax function and the Group takes expert advice on tax matters
as required.
• Tax risk is overseen by the IAG Board through the IAG Audit and
Compliance Committee.
• The Group seeks to understand its stakeholders’ expectations on tax
matters, e.g. cooperative working with tax authorities and its interaction
with non-governmental organisations.
• The IAG Board annually reviews and approves the tax strategy.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
81
Group governance structure
General Counsel
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• Airlines are subject to a significant degree of
regulatory control. In order for air carriers to
hold EU operating licences, an EU airline must
be majority-owned and effectively controlled
by EU nationals. British Airways is a UK carrier
and not subject to the same requirement.
The aviation industry continues to operate under a range of nationality
and other restrictions, some of which are relevant to market access under
applicable bilateral and multilateral air service agreements, while others
are relevant to eligibility for applicable operating licences. The Group will
continue to encourage stakeholders to normalise ownership of airlines in
line with other business sectors.
Risk description
Mitigations
• IAG could face a challenge to its ownership and
control structure.
• The Group has governance structures in place that include nationality
structures to protect Aer Lingus’, British Airways’ and Iberia’s operating
licences and/or route rights. These have been approved by the relevant
national regulators.
• IAG will continue to monitor regulatory developments affecting the
ownership and control of airlines in the UK and EU.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Risk management and principal risk factors continued
International Airlines Group | Annual Report and Accounts 2024
82
See the Corporate governance section
Operational and IT resilience
Operating company CEOs
Chief Information, Procurement,
Services and Innovation Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The Group’s airlines may be disrupted by
a number of different events which combine
to stress operational resilience.
• A single prolonged event, a series of events
in close succession, or a combination of events
over a period, can impact on operational
capability, financial status and brand strength.
• The Group needs to adhere to local
governments’ restrictions and regulations,
especially related to safety and public health,
and is sensitive to any consequential impacts.
• IAG is dependent on IT systems for most key
business processes. The integration within
IAG’s supply chain means that the Group is
also dependent on the performance of suppliers’
IT infrastructure, including networks.
• The Group needs to have resilience to withstand
severe and unexpected stresses. Potential high-
impact, low-likelihood events have been
considered that could disrupt the Group and/or
the aviation sector. Many of these events remain
outside of the group’s control.
Shortages in the supply chain; airspace and ATC restrictions; availability
of experienced licensed resource, including engineers and pilots; industrial
unrest or strike action, combined with goods availability shortages in the
supply chain, especially engines, and airspace and ATC restrictions can all
impact the operational environment and the customer experience of the
Group’s airlines. This increases the costs of running operations to provide
additional resilience, as well as impacting the costs and operations of the
businesses on which the Group relies. The Group is focused on minimising
any unplanned schedule changes or flight cancellations with additional
buffers and resilience built into the airlines’ networks.
The Group continues with its ambitious IT infrastructure transformation
agenda to modernise and digitalise its IT estates. The Chief Information,
Procurement, Services and Innovation Officer works with the Group’s
operating companies to ensure appropriate prioritisation and investment,
to maximise value from IT investment, and to provide oversight and
challenge over ambition and pace of delivery.
The Group is progressing with its digitalisation agenda, migration to the
cloud from on-premises data centres, remediation and transformation of its
networks and addressing obsolescence. It has moved more resources into
product teams more closely aligned to business needs. The Group is reliant
upon the resilience of its systems and networks for key customer and
business processes and is exposed to risks that relate to poor performance,
vulnerability or failure of these systems. This includes major programmes
and upgrades to modernise, including new commercial capabilities and
customer-centric enhancements using agile-based models, as well as
replacing core IT infrastructure and improving network connectivity and
reducing redundancy. Mitigating actions that prioritise operational stability
and resilience have been built into all cutover plans for the go-live of IT
systems-related changes with focus on minimising unplanned outages.
Risk description
Mitigations
• The Group’s airlines are reliant on critical parties
to deliver goods and services to maintain
operations and any failure of the level of service
or reliability and delivery of goods may impact
resilience and our customers.
• The ATC infrastructure and resource model
does not adapt and optimise aircraft
movements, impacting operations.
• Lack of resilience or provision of airport services
at key airports or constrained airport hubs
impacts operational resilience.
• Ongoing engine problems create operational
complexity and additional costs.
• An event causing significant network disruption
or the inability to promptly recover from short-
term disruptions may result in lost revenue,
customer disruption and additional costs.
• Public health concerns impacting populations
at scale could see an adverse effect on the
Group where governments choose to impose
restrictions, as would any other material event
impacting customers, employees, the supply
chain and flight operations .
• The dependency on IT systems and networks
for key business and customer processes is
increasing and the failure of a critical system
may cause significant disruption.
• Obsolescence within legacy infrastructure could
result in service outages and disruption.
• Management has business continuity plans to mitigate this risk to the
extent feasible, with focus on operational and financial resilience and
customer and colleague safety and recovery.
• The Group’s airlines have standby aircraft and crew in place.
• Resilience to minimise the impact of ATC airspace restrictions, poor
performance or constraints at airports and/or strike action on the Group’s
customers and operations is in place.
• The Group’s airlines are focused on developing customer disruption
management tools to help our customers in times of disruption.
• The operating companies’ tech teams work to deliver digital and IT
change initiatives to enhance security and stability.
• Operating companies’ IT governance boards are in place to review
delivery timelines.
• Reversion plans are developed for migrations of critical IT infrastructure.
• System controls, disaster recovery and business continuity arrangements
exist to mitigate the risk of a critical system failure.
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People, culture and employee
relations
Chief Executive Officer
Operating company CEOs
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The Group has a large unionised workforce with
around 85% of colleagues represented by one
of a number of different trade unions under
collective bargaining agreements (CBAs). IAG
relies on the successful agreement of collective
bargaining arrangements across its operating
companies to operate its airlines.
• The right skillsets and culture are needed to
transform our businesses at pace.
• Colleagues are critical to delivering the
customer experience.
• The Group’s airlines require specialist skillsets
to continue to operate.
Our people and their engagement, cultural appetite and mindset for change
are critical to the Group’s current performance and future success. Our
leadership recognises the efforts of our staff and their commitment through
the continued operational challenges facing our airlines. Shortages in
technical licensed staff across the aviation sector and in the Group airlines
may impact maintenance delivery timelines unless resource levels can be
secured. Additionally, pilot entry into the Group’s airlines is critical to keep
the operations resilient and meet future growth plans.
Across the Group, collective bargaining is in place with various unions.
Where agreements are open, and there is a threat of industrial unrest, our
operating companies engage in discussions with unions, as well as
governments and labour courts where relevant, to address concerns arising
within the negotiations, manage customer disruption and enable the airlines
to secure sustainable collective agreements and growth. In the year, the
Group’s airlines negotiated a number of collective agreement. Aer Lingus
and Vueling France-based pilots have taken strike action. Aer Lingus has
now concluded its pilot collective agreement and there is a pre-agreement
in place at Vueling for the Spanish pilot group. All of the Group’s businesses
continue to monitor potential changes to employment legislation to ensure
compliance.
In late 2023, AENA announced the result of its competitive tender for
ground handling licences at airports across Spain, which resulted in the
creation of a new handling company, South Europe Ground Services
(SOEGS). SOEGS will negotiate a new CBA with sector conditions and
maintain existing conditions for Iberia employees that have moved into the
new company.
The Group is focused on staff wellbeing and people morale and motivation,
and initiatives to build trust and engagement continue. The Group has
identified the skills and capabilities that are required to manage its
transformation. All operating companies recognise the critical role that their
employees will play in the transformation and future success of the Group
and they are focusing on improving organisational health and employee
engagement. The Group maintains its focus on behaviours and compliance
with key regulations.
Risk description
Mitigations
• Any breakdowns in the bargaining process
with the unionised workforces may result in
subsequent industrial or strike action which may
disrupt operations and adversely affect business
performance and customer perceptions
of the airlines.
• Our people are not engaged, or they do not
display the required leadership or cultural
behaviours.
• The Group businesses fail to attract, motivate,
retain or develop our people to deliver service
and brand experience.
• Critical skillsets are not in place to execute on
the required transformation plan or to exploit
innovation and AI opportunities and drive the
business forward.
• Technical licensed staff, including pilots
and engineers, need to be secured to maintain
operations.
• The Group is exposed to the risk of an individual
employee’s or groups of employees’
inappropriate and/or unethical behaviour
resulting in reputational damage, fines or losses
to the Group.
• Ongoing information sharing, consultation and collective bargaining with
unions across the Group take place on a regular basis, led by operating
companies’ human resources specialists, who have a strong skillset in
industrial relations.
• The Group’s businesses ensure that remuneration is aligned to local
markets in terms of productivity and pay.
• Operating companies’ people strategies are in place in our businesses.
• Succession planning within and across operating companies.
• Focus on recruiting and developing skills to run and transform our businesses.
• The Group’s businesses are investing in apprentice programmes and
retention initiatives to develop and secure critical skillsets.
• Operating companies’ engagement and organisational health surveys
have been conducted with action plans developed to create a positive
and inclusive culture.
• Access to support individuals’ wellbeing.
• The Group has clear frameworks in place including comprehensive Group-
wide policies designed to ensure compliance, monitored by the IAG Audit
and Compliance Committee.
• IAG’s Code of Conduct is supported by annual awareness programmes
and mandatory training, with additional focus for higher-risk areas.
• ‘Speak Up’ and whistleblowing channels are available across the
Group’s businesses.
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Safety and security and other
regulatory compliance
Operating company CEOs
General Counsel
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The safety and security of our customers
and employees are fundamental values for
the Group.
• High-profile external events impacting the
aviation sector and aircraft may change
customer sentiment towards air travel.
• Regulation of the airline industry covers many
of the Group’s activities including route flying
rights, airport landing rights, security and
environmental controls. The Group’s ability
to comply with and influence changes to
regulations is key to maintaining operational
and financial performance.
• Carrying out business in a compliant manner
and with integrity is fundamental to the values
of the Group, as well as the expectations of
the Group’s customers and stakeholders.
The IAG Safety, Environment and Corporate Responsibility (SECR) Committee
of the Board and the board of each operating company continue to monitor
the safety performance of IAG’s airlines. Safety and security responsibility
lies with each Group airline in accordance with its applicable standards.
Further detail is provided in the SECR Committee report.
The Group has refreshed its compliance framework in the year, including
a review of all Group framework and compliance policies as well as a review
and relaunch of its Code of Conduct. Training materials have also been
updated and rolled out across the Group’s businesses.
The Group maintains its focus on compliance with key regulations and
mandatory training programmes have continued through the year.
Risk description
Mitigations
• A failure to prevent or respond effectively
to a major safety or security incident or
intelligence may adversely impact the Group’s
brands, operations and financial performance.
• A failure to meet legal or regulatory standards
may result in breach with the potential to
hurt or impact our customers, employees,
or third parties, or impact our operations, and
lead to reputational damage, fines or losses
to the Group.
• The corresponding safety committees of each of the airlines of the
Group satisfy themselves that they have the appropriate resources and
procedures, which include compliance with Air Operator Certificate
requirements.
• The Group’s airlines have comprehensive training and maintenance
programmes in place, supported by a just culture environment, where
everyone is accountable for their actions and their performance is
reflective of the knowledge, behaviours and skills they have.
• There is ongoing security engagement with airports, regulators and public
authorities across the airlines’ networks.
• Incident centres respond in a structured way in the event of a safety
or security incident or intelligence.
• The Group has clear frameworks in place, including comprehensive
Group-wide policies designed to ensure compliance, monitored by the
IAG Audit and Compliance Committee.
• Compliance, human resources and legal professionals specialising in
competition law, anti-bribery and other legislation and regulations that
apply to the Group businesses support and advise the Group’s businesses.
• IAG’s Code of Conduct is supported by annual awareness programmes
and mandatory training, with additional focus for higher-risk areas.
• ‘Speak Up’ and whistleblowing channels are available across the
Group’s businesses.
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Financial Statements
Sustainability Statement
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See the Report of the Safety, Environment and
Corporate Responsibility Committee
Sustainable aviation
Chief Financial and Sustainability Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• IAG is playing its role and working with industry
to accelerate aviation decarbonisation. This
means that environmental considerations are
integrated into the business strategy at every
level and the Group uses its influence to drive
progress across the industry.
• Our stakeholders and potential investors seek
confirmation over our sustainability agenda and
may link their purchasing, investment or lending
decisions to our commitments and progress
against them.
• Our customers look to ensure that our airlines
allow them to minimise their carbon footprint.
IAG is committed to a target of net zero carbon emissions across its
operations and supply chain by 2050, along with 2030 targets. The
Procurement function has a key role to play in ensuring delivery of the
Scope 3 commitment for the Group with supplier sustainability ratings and
sustainability clauses in supplier contracts key considerations for future
contract negotiations and renewals. IAG has also committed to 10% SAF
usage on average across its fleet by 2030, which is subject to the
production and availability of SAF.
Plans implemented by the EU, UK and US governments to decarbonise
aviation have resulted in fragmentation of policy measures and support
offered by governments for green initiatives across the different regions
in which the Group airlines operate. SAF infrastructure and availability still
lags demand, impacting the ability to achieve the aviation industry’s carbon
reduction commitments. Mandates and other tax-based measures may
disproportionately impact the Group’s airlines versus their competitors.
All of the Group’s airlines have agreed deals for the production of SAF to
meet the Group’s target for its use on the path to decarbonisation. Overall
aviation industry requirements will require infrastructure investments across
markets to support the production of SAF to meet demand expectations.
Industry-wide new fleet entry delays may also impact fuel efficiency.
IAG continues to model potential impacts and costs, with mitigation plans
embedded into strategic and financial planning. The Group and its
businesses completed a double materiality assessment in the year as part
of the Corporate Sustainability Reporting Directive reporting requirements.
IAG continues with its assessment of climate-related risks under the Task
Force on Climate-related Financial Disclosures (TCFD) guidelines, by testing
and revising its assumptions against updated forecasts for future business
growth, the regulatory context and future carbon pricing. The Group has
embedded forecasting of its climate impacts into its strategic, business and
financial planning processes and has assessed that it is resilient to material
climate-related impacts.
Risk description
Mitigations
• Increasing global concern about climate change
and the impact of carbon affects Group airlines’
performance as customers seek alternative
methods of transport or reduce their levels
of travel.
• New taxes, the potential removal of aviation jet
fuel exemptions and increasing price of carbon
allowances impact on price and demand.
• The airline industry is subject to increased
regulatory requirements and policy asymmetry
driving costs, distortion and operational
complexity, as well as the potential for
sub-optimal outcomes for the planet.
• Demand exceeds supply to meet sustainable
fuel mandates or infrastructure and production
is not available in the markets the Group
airlines serve.
• SAF policy fragmentation results in different
in-scope allowances across markets, distorting
the competitive environment and levels of
carbon costs.
• The Group may face an increasing challenge
by external parties over decarbonisation when
utilising offsets to meet compliance obligations.
• Increasing severity of weather events results
in operational and customer disruption.
• IAG climate change strategy to meet target of net zero carbon emissions
by 2050.
• Annual incentive plans link manager bonuses to annual carbon
intensity targets.
• Embedded climate impacts into the financial statements, balance sheet,
financial forecasting and other relevant disclosures.
• IAG’s commitment to SAF usage, with operating companies continuing
to secure mid- and long-term supply agreements.
• IAG actively monitors the delivery of SAF procured.
• Fleet replacement plan is introducing aircraft into the fleet that are
more carbon-efficient.
• Reporting on sustainability performance in the IAG supply chain to better
mitigate supply chain-related sustainability risks.
• Participating in CORSIA, the ICAO global aviation carbon offsetting
scheme and the EU ETS and UK ETS emission trading schemes.
• Horizon scanning for potential partners and technology.
• Engagement across UK, EU and global trade associations to shape
effective climate policy and drive support for low-carbon solutions.
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Financial Statements
Sustainability Statement
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See the Consolidated Non-Financial Information
Statement and Sustainability Information
Transformation, innovation and AI
Chief Information, Procurement,
Services and Innovation Officer
Strategic
imperatives
Category
Stakeholder
impact
Risk trend
Viability
scenarios
2024
2023
Strategic relevance
Status
• The transformation, innovation and AI agenda
is critical to the Group’s ability to deliver strong
returns and to compete in the new competitive
marketplace, where distortionary effects of
aviation support schemes may have allowed
competitors to accelerate their change agendas
and invest to improve capabilities and
customer propositions.
• Competitors and new entrants to the travel
market may use digital tools, innovate or use
AI and technology more effectively and disrupt
the Group’s business model.
The Group continues to focus on its cost base to offset price increases in
the supply chain, particularly costs from fleet and engine manufacturers and
the additional costs of resilience, to ensure that the Group is well prepared
for any further external headwinds that may impact the aviation industry.
Opportunities for AI adoption to drive efficiencies and better insights have
been identified across the Group’s businesses with business cases and
implementation subject to guardrails to help protect against unexpected
outcomes. The people impact of change and the talent and skillsets needed
for the future size and shape of the Group’s businesses are considered as
part of the Group’s transformation and innovation programmes.
The Group has an established Transformation Programme Management
Office which has oversight of an agreed portfolio of initiatives across the
Group focused on improving customer service, revenue and cost-efficiency,
and the transformation mindset is becoming part of our culture. Many of the
programmes are multi-year and all are subject to the ongoing review and
investment approvals of the IAG Board. This has strengthened the Group’s
operating companies’ focus on addressing their legacy estates to deliver
digital customer experiences.
Risk description
Mitigations
• Failure to transform the business to effectively
deliver cost-efficiency initiatives, maintain or
grow share in the new competitive environment,
fully implement all programmes across the
Group and realise the benefits of the change
initiatives to deliver Group digital platforms
and customer propositions.
• The pace of change may expose the Group
to execution risk as multiple initiatives are
delivered across processes and systems that
serve our operations and customers.
• The impact on our people of the wide-ranging
change agenda, if poorly managed or
uncoordinated, could lead to logistical and
engagement challenges, with the potential
to negatively impact NPS, revenue and
efficiency benefits.
• Further standardisation, simplification
and efficiencies of the Group platforms are
not delivered.
• Competitors, or new entrants, may invest
and innovate in deploying digital technologies,
AI, sustainability initiatives and/or platforms
ahead of the Group.
• Technology disruptors may use tools to
position themselves between our brands and
our customers.
• The levels of data capture, data storage and
security and availability of data, are not
sufficient and ready to exploit AI use cases.
• Lack of accuracy or insufficient human oversight
of AI tools and outputs could result in errors
or suboptimal business decisions.
• The Group does not understand the scope
or depth of the use of AI across its businesses
and third parties as its prevalence accelerates.
• The Chief Information, Procurement, Services and Innovation Officer
has clear oversight of all programmes across the Group’s businesses.
• Mirrored structures in the operating companies.
• Consistent core metrics and dashboard reporting used to assess
performance against plan.
• The IAG Management Committee has regular operating-company-specific
meetings to assess their transformation agenda and the risks to delivery.
• The Group transformation agenda is subject to Board approval and
progress is regularly monitored by the Board.
• Group AI governance committee to assess AI initiatives to allow the Group
businesses to exploit AI capabilities.
• There is operating company-led communications to our employees
on change initiatives and changes that may affect them.
• Consideration is given to the Group’s sustainability commitments
and agenda for all programmes.
• Any potential changes that could impact the brands are reviewed
to mitigate against reputational and brand damage.
• The Group’s Hangar 51 programme continues to create early
engagement and leverages new opportunities with start-ups and
technology disruptors.
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Sustainability Statement
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Viability assessment
The directors have assessed industry,
Group-specific and non-sector-specific
longer-term trends over a timeframe
beyond the plan period, such as
climate change regulation, infrastructure
proposals at hubs, availability and timing
of technologies in fleet, exploitation
of the cloud, AI and related tools,
and disruption in the supply chain.
These trends may require the business
to consider strategic responses,
business model adaptions and new
skillsets ahead of any potential impact
to the Group plan.
Other considerations include:
• economic trends and shifts in the
relative strengths of global economies,
including the rise of emerging markets
and hubs, market shifts and
interconnectivity including
partnerships and alliances, the
competitive landscape, and changes in
customer mix or sentiment to travel;
• supply chains and proximity and
reliability of supply; inflationary,
resource and availability pressures;
• costs of compliance with
environmental and climate change
regulations and/or lack of availability
of infrastructure to meet
commitments or mandates;
• increasing regulatory burdens, policy
asymmetry or government
intervention impacting aviation and
the Group’s business model;
• areas of risk or opportunity for the
Group, such as workforce availability,
migration, war for talent, AI adoption,
outcomes of mis- and dis-information,
and workforce demographic changes;
• structural changes in how
customers travel;
• airframe and engine performance
and reliability;
• the potential macroeconomic
consequences of new tariffs,
interest rates and inflation, especially
where there are labour shortages
in key markets or a shortage of
technical specialists;
• shifts in regional economic power
and security implications of new
governments and policy;
• climate change shocks and their
impact on the aviation industry;
• the Group’s resilience to future
events impacting aviation, global
or financial markets, interest and
exchange rate changes, particularly
the US dollar; and
• stakeholder expectations over IAG’s
commitment to acting with integrity
to protect our planet, particularly on
climate change and carbon impacts.
The directors have assessed key threats
and trends faced by the industry,
emerging risks and opportunities,
and other industry and Group-specific
risks that could impact the Group’s
business plan:
• these are considered in light of their
impact on our business model and
relevance, operations, customers and
financial status and include changes
in regulations, customer trends and
behaviours, macroeconomic
predictions on growth, regional
market opportunities, technology
trends, environmental implications
and infrastructure developments that
could impact our operations, as well
as more existential threats to aviation;
• when developing the Group’s three-
year business plan, longer-term
considerations have been assessed
by the IAG Management Committee
and the Board in conjunction with
the priorities of and risks faced by
the business; and
• the Board also conducted its annual
strategy session, in addition to regular
performance and strategy delivery
progress reviews during the year.
Following this process, short-,
medium- and longer-term priorities,
challenges and opportunities have
been identified and actions agreed.
When considering the viability of the
Group for the purposes of this report,
the directors have evaluated the risk
landscape facing the Group and have
recommended plausible but severe
downside scenarios that could impact
the Group’s three-year plan, in order
to determine the Group’s resilience
to such impacts.
The results of these scenarios on the
plan have been presented both pre
and post an assessment of the likely
effectiveness of the mitigations that
management reasonably believes would
be available over this period (which
are not already reflected in the plan).
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International Airlines Group | Annual Report and Accounts 2024
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Longer-term trends
and risk considerations
Risk assessment across
the timeline of the plan
Viability scenario process
The directors have assessed key threats
and trends, and emerging risks and
opportunities, to determine plausible
but severe downside scenarios that
could impact the Group’s three-year
business plan.
Scenarios modelled
The scenarios have been defined
by management and designed
to consider principal risks (or
combinations of risks) that could
materialise over the viability period and
weaken the Group’s liquidity position,
and therefore its financial sustainability.
Each scenario is regarded as severe
but also plausible, and has considered
the impact on liquidity, solvency and
the ability to raise financing in an
uncertain and volatile environment.
Management has also assessed
mitigations that are available to the
business beyond operating cost
reductions, including further financing,
capital expenditure plans and potential
disposals. Options are presented, as
appropriate, for the Board to assess.
In reviewing and approving the
scenarios, the Board considered,
amongst other matters, the availability
and sufficiency of potential mitigations,
the expected speed of implementation
in response to the uncertainty and the
future flexibility required for the Group
to adapt further as needed.
Sensitivities in the scenarios’
assumptions have been highlighted
by management and challenged by
the Board. In addition, the Board
reviewed the results of revenue and
margin reverse stress tests, which
demonstrated the level of sustained
passenger revenue decline and,
separately, margin decline before
mitigations, that would result in the
Group using all available liquidity
(including cash and currently available
undrawn credit facilities) and
compared these to the outputs from
the scenarios.
No.
Title
Link to
principal risks
1
Downside case
This scenario configures a blend of commercial and operational adverse impacts which would result in capacity
reductions, in addition to an increase in fuel prices over and above the Group’s business plan assumptions.
Economic considerations include a combination of events reducing capacity up to a maximum of 25%,
increasing fuel prices up to 20%, reducing passenger unit revenue and increased operational costs.
The Downside case assumes that the airlines have access to further mitigations, including access to their
portions of the available revolving credit facility.
The period to June 2026 of this Downside case has also been applied as the Downside case in the going
concern analysis (see note 2 to the consolidated financial statements).
1, 2, 4,
5, 7, 10
2
Operational resilience challenges
Lost revenue within some IAG airlines from pre-emptive flight cancellations in response to resourcing
challenges with resultant reputational impact.
Ongoing challenges in the global supply chain, particularly aircraft and engine availability, reliability and
performance, lead to an increase in grounded aircraft awaiting maintenance with further capacity reductions
also impacting revenues. Revenues from the Group’s maintenance business also impacted by the lack of
available spare parts.
Further revenue impact considered from reduced capacity as a result of air traffic control airspace restrictions
and outage.
Revenue impact from schedule disruption due to extreme weather events also considered within the scenario.
1, 2, 4, 7,
8, 10
3
Cybersecurity and IT infrastructure
A stress to model the impact of a ransomware attack on an IAG airline. The scenario assumes a disruption
period of five days resulting from the attack before full connectivity is restored, impacting customers and
operations of the affected airline. It also assumes lost revenue due to disruption of operations at the affected
airline with knock-on impacts to other IAG airlines due to the need to isolate and switch off connectivity of
Group shared credentials platforms. There are also further lost revenues due to reputational impact and
increased EU 261 and other customer goodwill costs. Associated costs of recovery from the incident include
the disruption through the investigation period including increased IT costs as well as brand impacts, and the
potential for regulatory scrutiny and fines.
In addition, the scenario considers an unplanned outage caused by the data centre migration activity, resulting
in short-notice flight cancellations, resulting in further lost revenue and increased EU 261 and other customer
goodwill costs.
1, 3, 7
4
Sustainability and business transformation
An increasing revenue stress on flight operations across the Group to reflect changes in customer behaviours
or costs of carbon decrease demand.
Increased carbon costs and sustainable fuel costs to meet mandates and where supply cannot be secured.
Revenues in key markets below plan expectations also modelled to reflect a potential long-term change in mix
and travel behaviours.
Potential for lost revenue impact arising from delays in delivering and realising the benefits of business
transformation initiatives and increased costs of securing required resourcing levels.
Longer-term consideration of the impacts of climate change and carbon and regulatory initiatives to address
this within the aviation sector, such as the implementation of new regulatory policy, carbon costs and the cost
and availability of SAF are also subject to assessment and modelling by the Group in addition to the viability
scenario assessments.
1, 4, 10, 11
Viability scenario includes
sustainability-related stress
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
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Viability statement
The directors have assessed the
viability of the Group over three years
to December 2027. They have
considered the global macroeconomic
environment and geopolitical
uncertainty, the health of the aviation
industry and its supply chain, the
assumptions of the plan, the strategy
of the Group and the Board’s risk
appetite. Although the prospects
of the Group are considered over
a longer period, the directors have
determined that a three-year period
is an appropriate timeframe for
assessment as it is aligned with
the Group’s strategic planning period
(as reflected in the plan), and as the
external uncertainties facing the
aviation sector continue to be
significant and many are beyond the
Group’s ability to influence directly.
The Board recognises the pace of
change required within the Group
to further adapt, build appropriate
resilience and respond to this
environment, in addition to the
rapidly changing competitive
landscape and wider global
macroeconomic conditions.
The Group has reviewed the modelling
of the impact of mitigating actions to
offset further deterioration in demand
and capacity, including reductions in
operating expenditure and capital
expenditure. The Group expects to be
able to continue to secure financing for
future aircraft deliveries and in addition
has further potential mitigating actions
it would pursue in the event of adverse
liquidity experience.
Further details on debt financing can
be found in the going concern
disclosures in note 2 to the
consolidated financial statements.
Based on this assessment, the directors
have a reasonable expectation that
the Group will be able to continue
in operation, meet its liabilities as they
fall due and raise financing as required
over the period to December 2027.
However, this is subject to a number
of significant factors that are outside
the control of the Group. In reaching
this assessment the directors have
made assumptions when considering
both the plan and the Downside case
(the most severe and plausible of
the viability scenarios considered):
• the Group will continue to have
access to funding options and that
the capital markets retain a level
of stability and appetite for funding
within the aviation sector;
• the Group can implement any
further structural changes required
in agreement with any union
consultation processes and
regulatory approvals;
• any imposition of extensive new
tariff regimes does not result in
acute stress on the global supply
chain, particularly for aircraft or
engines, and/or result in a global
macroeconomic correction
driving recessions;
• any pandemic or other public
health-related restrictions do not
result in further prolonged and
substantial capacity reductions and
groundings as governments do not
have the appetite for the economic
impact and stress that such actions
would place on their respective
economies and populations;
• any negative disruptive effects of AI
do not significantly affect the sector
or global markets, including further
stresses on infrastructure
availability, financial markets or the
supply chain; and
• geopolitical events do not result
in war zones significantly impacting
financial markets, airspace
operations and connectivity flows
across our flight schedules.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Risk management and principal risk factors continued
International Airlines Group | Annual Report and Accounts 2024
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Corporate
Governance
Corporate Governance
92
Chairman’s introduction
to Corporate Governance
94
Our Board of Directors
97
Corporate Governance
112
Report of the Nominations
Committee
116
Report of the Safety, Environment
and Corporate Responsibility
Committee
120
Report of the Audit and
Compliance Committee
129
Report of the Remuneration
Committee
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Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
91
“We remain committed to our purpose of
connecting people, businesses and countries,
while maximising our shareholders’ returns and
balancing the interests of our stakeholders.”
I am pleased to present
IAG's 2024 Corporate
Governance Report.
The purpose of this report
is to explain IAG's
corporate governance
framework and how it was
applied during 2024, and
the role and work of the
Board during the year.
As explained in the introduction to this
annual report, 2024 was a year of strong
financial performance for the Group.
Our good results have enabled us to
deliver returns to our shareholders
while balancing the interests of all
our stakeholders.
The interests of shareholders continued
to be at the forefront of the Board's
considerations during the year. The
Board maintained an active dialogue
with shareholders and investors. Positive
feedback was received during the year
on the Group’s progress against the
strategy set out at the 2023 Capital
Markets Day (CMD).
Strategic Report
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Financial Statements
Sustainability Statement
Chairman’s introduction
International Airlines Group | Annual Report and Accounts 2024
92
Javier Ferrán
Chairman
Our sustainability endeavours have
also remained part of our core strategy,
supported by the Safety, Environment
and Corporate Responsibility Committee’s
work. The Board has sought to balance
the corporate interests with those of our
employees, suppliers, customers and
other stakeholders, while taking into
consideration the impact of its activities
on the community and the environment.
Sustainability issues have been at the
forefront of the Board's activities this
year, both from a strategic and investment
perspective and in terms of the
Company's readiness to report under
the new requirements of the CSRD.
Our focus in the year ahead will continue
to be on supporting management in the
execution of our strategy and Group-
wide transformation programme to
deliver sustainable growth and returns,
and on strengthening our culture and
shared values, always guided by our
conviction that we make a positive
contribution to the economies and
communities we serve.
Board composition
Giles Agutter stepped down from the
Board at the 2024 Annual Shareholders’
Meeting held in June. I thank him for
his commitment and contribution during
his years of service as a director of
the Company.
To fill this vacancy, Bruno Matheu
was appointed as a proprietary non-
executive director at the proposal of
Qatar Airways, our largest shareholder.
Bruno brings considerable expertise in
the global aviation industry, particularly
in the areas of planning, commercial and
bilateral and multilateral cooperation,
as well as extensive experience in global
board positions in the travel industry,
technology, education and sport.
Bruno Matheu was also appointed
to the Safety, Environment and
Corporate Responsibility Committee,
where we believe he can make a
valuable contribution.
Management changes
In 2024, the Board oversaw a number
of key appointments, which show the
strength of our succession planning and
leadership pipeline. In February, Marco
Sansavini was appointed as the Chair
and CEO of Iberia, replacing Fernando
Candela, who retired in September.
Fernando had a long career with the
Group and I would like to take this
opportunity to acknowledge his
contribution to IAG.
As a consequence of Marco's move, we
appointed Carolina Martinoli as the
Vueling Chair and CEO, an executive
with a long and broad career in the
Group, moving from her most recent
role as IAG Chief People, Corporate
Affairs and Sustainability Officer.
Culture and diversity
In 2024, we continued to focus on
people and culture in our oversight,
supporting management's attention
to investing in careers and development,
as well as in achieving our diversity and
inclusion ambitions, all with a view to
building a healthy organisational culture
that supports our ambition and
transformation and aligns to our core
values of ambition, teamwork,
innovation, pragmatism, efficiency
and responsibility.
Again this year we completed a very
extensive workforce engagement
programme, the results of which were
presented to the Board at its December
meeting. This feedback provides
valuable input to the decision-making
process on people and culture strategies
and organisational transformation.
Additionally, the Board was regularly
informed about the initiatives of each
operating company with respect to its
people. A session at the annual Board
strategy meeting was devoted to the
people and culture strategy.
The Board supports diversity in a
broader sense, taking into account
various factors to optimise the
composition of the Board. It ensures
compliance with all regulatory
requirements, including the need
for more than half of the Board to
be independent EU nationals.
Female directors continue to represent
45% of the Board and 63% of the
independent non-executive directors
(including the Chairman). In addition,
one member of the Board is from
an ethnic minority background.
Our focus remains on improving the
bench strength and the diversity of
both senior leaders and Board members
through active succession planning
and talent management. We are
satisfied that the Board continues to
meet the proportion of women on
boards and ethnic diversity as set out
in the European and Spanish standards
as well as in the UK listing rules.
Board evaluation
An internal evaluation of the Board was
conducted this year, since the last
external review was completed in 2022.
This evaluation was led by me, with the
support of the Board secretariat, and the
results and the action plan to address
the matters raised were discussed at the
November Board meeting.
The Board is satisfied with the progress
made during the year against the
actions agreed for 2024. Key highlights
have been the strong working
relationship between management and
the Board, the significant progress made
on business transformation and the
increased focus on people and culture.
Further details of this process are
provided later in this report.
Update to the Board regulations
On 27 February 2025, the Board
approved a review of its Regulations
and those of its advisory committees.
The purpose of this review was to
update these charters and bring them
into line with the latest developments
in corporate governance, namely the
approval in Spain of the CNMV Technical
Guide on Audit Committees and the
approval in the UK of the 2024 revision
of the Corporate Governance Code.
In addition, the Board agreed that the
oversight of the safety risk management
framework of each of the Group's
airlines, together with the overall
oversight of the Group's enterprise risk
management framework, will be the
responsibility of the Audit and
Compliance Committee, so that this
Committee has an overall view of the
Group's risk management. As a result,
the Board agreed that the Safety,
Environment and Corporate
Responsibility Committee will continue
as the Environmental and Corporate
Responsibility Committee. The new
Board and Committee Charters are
available on the Company's website.
Looking ahead
The Board is dedicated to maintaining
high standards of corporate governance,
ensuring we create long-term
sustainable value for our shareholders
while balancing the interests of all our
stakeholders. Our strong and effective
governance processes are fundamental
to our ability to uphold our values and
execute our strategy.
IAG’s employees are the core of our
business. I would like to once again
express our sincere gratitude for their
efforts and dedication during the year.
Additionally, I extend my thanks to my
fellow Board members for their ongoing
support and commitment throughout
this period.
Javier Ferrán
Chairman
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Sustainability Statement
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93
1. Javier Ferrán
Chairman
2. Luis Gallego
Chief Executive Officer
3. Heather Ann McSharry
Senior Independent Director
4. Peggy Bruzelius
Non-Executive Director
5. Eva Castillo
Non-Executive Director
6. Margaret Ewing
Non-Executive Director
7. Maurice Lam
Non-Executive Director
8. Bruno Matheu
Proprietary Director
9. Robin Phillips
Proprietary Director
10. Emilio Saracho
Non-Executive Director
11. Nicola Shaw
Non-Executive Director
Strategic Report
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Financial Statements
Sustainability Statement
Board of Directors
Our Board of Directors
International Airlines Group | Annual Report and Accounts 2024
94
1. Javier Ferrán
Key areas of experience:
Consumer, finance, sales/marketing,
governance.
Current external appointments:
Chairman, Casa Optima SPA. Managing
Partner, Terlos LLP.
Previous relevant experience:
Chairman, Diageo Plc. 2017-2025.
Non-executive director, Coca Cola
European Partners Plc 2016-2020.
Chairman of Supervisory Board, Picard
Surgelés 2010-2020. Member,
International Advisory Board ESADE
2005–2019. Non-executive director,
Associated British Foods plc 2005–2018.
Non-executive director, Desigual SA.
2014-2017. Non-executive director,
SABMiller plc 2015–2016. Vice Chairman,
William Grants & Sons Limited 2005–
2014. Non-executive director, Louis
Dreyfus Holdings BV 2013–2014. Non-
executive director, Abbott Group 2005–
2008. Non-executive director, Chupa
Chups SA 2000-2003. Partner, Lion
Capital LLC 2005–2018. President EMEA,
President and CEO, Bacardi Group
1992-2004.
2. Luis Gallego
Key areas of experience:
Airline industry, general management.
Current external appointments:
Member of the Board of Governors and
Member of the Chair Committee, IATA.
Previous relevant experience:
Chairman and CEO, Iberia 2013-2020.
CEO, Iberia Express 2012-2013. Chief
Operating Officer, Vueling 2009-2012.
Founder of Clickair 2006-2009.
3. Heather Ann McSharry
Key areas of experience:
General management, pharmaceuticals/
health care, financial services, consumer
products, food and construction
industry sectors, governance.
Current external appointments:
Non-executive director, Chair of
Nominations and Governance
Committee, Jazz Pharmaceuticals Plc.
Previous relevant experience:
Non-executive director, CRH plc
2012-2021. Non-executive director,
Greencore plc 2013-2021. Non-executive
director, Uniphar Plc 2019-2020. Non-
executive director, Bank of Ireland Plc
2007-2011. Chairman, Bank of Ireland
Pension Fund Trustee Board 2011-2017.
Managing Director, Reckitt Benckiser
Ireland 2004-2009. Managing Director,
Boots Healthcare Ireland 1998-2004.
4. Peggy Bruzelius
Key areas of experience:
Financial services, corporate finance.
Current external appointments:
Non-executive director, Orrön Energy
AB. Chair, Lancelot Holding AB. Member,
the Royal Academy of Engineering
Sciences.
Previous relevant experience:
Non-executive director, Skandia Mutual
Life Insurance 2012-2022. Non-executive
director, Lundin Energy AB 2012-2022.
Chair, Swedish National Agency for
Higher Education 2008-2011. Member
Board of Trustees, Stockholm School
of Economics 2000-2011. Various
Corporate Boards, Trygg Hansa Liv AB,
Celsius AB, AB Ratos, Scania AB, The
Body Shop Plc, Axel Johnson AB,
Axfood AB, Husqvarna AB 1992-2019.
Senior Independent Director, AB
Electrolux 1996-2012. Non-executive
director, Syngenta AG 2001-2014. Non-
executive director, Diageo plc
2009-2018. Non-executive director,
Akzo Nobel nv 2007-2019. Executive
Vice President, Head of Asset
Management Skandinaviska Enskilda
Banken 1997-1998. CEO, ABB Financial
Services AB 1991-1997.
5. Eva Castillo
Key areas of experience:
Financial sector, telecoms sector.
Current external appointments:
Non-executive director, Caixabank.
Trustee of the Council for Economy
of the Holy See (Vatican), Trustee of the
Board of the Comillas ICAI Foundation.
Member of Entreculturas Foundation.
Member of Advantere School of
Management.
Previous relevant experience:
Non-executive director, Zardoya Otis
2019-2022. Non-executive director,
Bankia 2012-2021. Chair Telefónica
Deutschland AG. 2012-2018.
Non-executive director, Telefónica, S.A.
2008-2018. Non-executive director VISA
Europe Plc 2014-2017. President and
CEO, Telefónica Europe 2012-2014. Non-
executive director, Old Mutual Plc
2011-2013. President and CEO Merrill
Lynch Capital Markets, Spain 1999-2006.
President and CEO, Merrill Lynch,
Wealth Management EMEA 2006-2009.
6. Margaret Ewing
Key areas of experience:
Professional services, financial
accounting, corporate finance,
strategic and capital planning,
corporate governance, risk
management.
Current external appointments:
Senior Independent Director and
Chair of the Audit and Risk Committee,
ConvaTec Group Plc. Non-executive
director and Chair of the Audit and Risk
Committee, ITV Plc.
Previous relevant experience:
Trustee and Chairman of the Finance
and Audit Committee, Great Ormond
Street Hospital Children’s Charity
2015-2020. Non-executive director,
Standard Chartered Plc 2012–2014.
Independent external member of the
Audit and Risk Committee, John Lewis
Partnership Plc 2012–2014. Non-
executive director, Whitbread Plc
2005-2007. Vice Chairman, Managing
Partner, Public Policy, Quality and Risk
and London Practice Senior Partner,
Deloitte LLP 2007–2012. Director of
Finance, BAA Ltd 2006 and Chief
Financial Officer, BAA PLC 2002–2006.
Group Finance Director, Trinity Mirror
PLC 2000–2002. Partner, Corporate
Finance, Deloitte & Touche LLP
1987-1999.
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Committee Chair
Audit and Compliance Committee
Nominations Committee
Remuneration Committee
Safety, Environment and Corporate
Responsibility Committee
7. Maurice Lam
Key areas of experience:
Professional services, financial
accounting, audit and compliance
in the banking industry.
Current external appointments:
Independent Director, Chairman of the
Audit Committee and Member of the
Board Risk Committee, Bank of China
(Europe) S.A. Independent director
and Chairman of the Audit & Compliance
Committee of Banque Internationale
à Luxembourg S.A.
Previous relevant experience:
Independent Director, Chairman of the
Audit Committee and Member of the
Board Risk Committee of Quintet Private
Bank (Europe) S.A. 2015-2020. Member
of the Board of Directors of LuxConnect
S.A., a Luxembourg State owned
Company, acting as a business enabler
in the ICT market 2013-2016.
Independent Director, Generali
Fund Management S.A. 2013. Deloitte
Luxembourg, Managing Partner and
CEO, 2000-2010, Head of Audit
1993-2000, Audit Partner, Financial
Services 1988-1993 ; Deloitte & Touche
UK 1979-1985.
8. Bruno Matheu
Key areas of experience:
Airline industry and transportation,
marketing.
Current external appointments:
Founder and President, BLM Consulting.
Senior Advisor Boston Consulting
Group. Director, Transat A.T. inc..
Previous relevant experience:
CEO, Airline Equity Partners – Etihad
Aviation Group, 2014-2017. Member of
the boards of Virgin Australia and Air
Seychelles, 2014-2017. Chief Officer
Long-Haul Business Unit, Air France,
2013-2014. EVP Marketing, Revenue
Management & Network, Air France –
KLM, 2004-2012. Member of the Group
Executive Committees Air France – KLM,
2004-2012. Chairman, Commercial
Committee Air France – KLM,
2004-2012. Co-Chairman, Joint Ventures
with Delta Airlines, China Eastern and
China Southern, 2004-2012. Non-
executive director, Air France, Alitalia,
CityJet, Amadeus, Ecole Centrale,
2004-2012.
9. Robin Phillips
Key areas of experience:
Finance, airline industry and
transportation.
Current external appointments:
Chairman, Development Funding Board,
Pancreatic Cancer UK. Senior Advisor,
Circadence Corporation (US). Board
member, IR – Scientific (Canada).
Previous relevant experience:
Global Head/Co-Head of Corporate and
Investment Banking, Head of Global
Banking and Markets (Hong Kong),
Group Head Climate Committee, Head
of Global Industries Group, Head of
Transport, Services and Infrastructure,
HSBC 2003-2019. Global Co-Head of
Transport & Infrastructure Group,
Citigroup 1999-2003. Executive Director,
Transportation and Aviation Investment
Banking, UBS Warburg 1992-1999.
Assistant Director, Capital Markets,
Kleinwort Benson 1985-1991.
10. Emilio Saracho
Key areas of experience:
Banking, corporate finance, investment
management.
Current external appointments:
Senior Advisor, Altamar Capital Partners.
Previous relevant experience:
Non-executive director, Inditex
2010-2023. Chairman, Banco Popular
Español 2017. Vice Chairman and
Member Investment Banking
Management Committee, JP Morgan
2015–2016. Deputy CEO EMEA 2012–
2015, Co-CEO Investment Banking for
EMEA 2009-2014, JP Morgan. CEO, JP
Morgan Private Banking for EMEA
2006–2008. Director, Cintra 2008.
Director, ONO 2008. Chairman, JP
Morgan Spain & Portugal 1998–2006.
Global Investment Banking Head,
Santander Investment (UK) 1995–1998.
Head Corporate Finance Iberia, Goldman
Sachs International 1990–1995.
11. Nicola Shaw
Key areas of experience:
Transport sector, public policy and
regulatory affairs, consumer, safety and
environment, operational management.
Current external appointments:
Chief Executive, Yorkshire Water.
Previous relevant experience:
Executive Director, National Grid plc
2016-2021. Non-Executive Director
Ellevio AB 2015–2017. CEO, HS1 Ltd 2011–
2016. Non-Executive Director,
Aer Lingus Plc 2010–2015. Director
and previously other senior positions
FirstGroup plc 2005–2010. Director
of Operations and other management
positions Strategic Rail Authority 2002–
2005. Deputy Director and Deputy Chief
Economist, Office of the Rail Regulator
(ORR) 1999–2002.
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Sustainability Statement
Board of Directors continued
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Committee Chair
Audit and Compliance Committee
Nominations Committee
Remuneration Committee
Safety, Environment and Corporate
Responsibility Committee
Statement of compliance
with applicable corporate
governance codes
IAG is incorporated and listed in Spain
and is subject to Spanish legislation and
corporate governance requirements,
including the requirement to report on
its compliance with the Spanish Good
Governance Code of Listed Companies,
last updated and published by the
Spanish Comisión Nacional del Mercado
de Valores (CNMV) in June 2020, and
available on its website (www.cnmv.es).
IAG is also listed on the London Stock
Exchange and is subject to the UK
Listing Rules, including the requirement
to explain whether it complies with the
UK Corporate Governance Code
published by the UK Financial Reporting
Council (FRC). A copy of the version
of the UK Corporate Governance Code
applicable to this reporting period
(updated and published in July 2018)
is available on the FRC's website
(www.frc.org.uk). In addition, the current
applicable version of the Code, which
was published in January 2024 and
applies to financial years beginning
on or after 1 January 2025, is available
on the FRC’s website.
IAG has prepared a consolidated
Corporate Governance report
responding to both Spanish and UK
reporting requirements, which is
available separately on the Company’s
website (www.iairgroup.com) and on
the CNMV website (www.cnmv.es).
Pursuant to the CNMV regulations, this
report has been filed with the CNMV
accompanied by a statistical annex
covering some legally required data.
At the same time, this Corporate
Governance report forms part of the IAG
Management report for the year 2024.
In addition, and as required by the UK
Listing Rules, this report includes an
explanation regarding the Company’s
application of the principles of the UK
Corporate Governance Code and how
it has complied with the Code’s
supporting provisions during the year.
Details of where key information can
be found are provided below.
During 2024, IAG fully complied with
all applicable recommendations of the
Spanish Corporate Governance Code;
even though the Company
acknowledges that, due to legal and
regulatory requirements applicable
to the aviation sector, the Company’s
Bylaws contain certain share ownership
restrictions that are contrary to the
provisions of the first recommendation
of the Spanish Code.
The Company confirms that it
applied the principles and complied
with all the provisions of the UK
Corporate Governance Code in the
reporting period.
Applying the principles of the UK Corporate Governance Code
Board leadership and company purpose
Page
Chair’s introductory statement
92-93
Board leadership and company purpose
102
Corporate culture
102
Investment in the workforce
102
Board activities
108
How the Board considers stakeholders’ interests
103-107
Board decisions, corporate interest
and stakeholders
104
Section 172 statement
103
Whistleblowing
71, 122, 125
Conflicts of interest
109
Division of responsibilities
Page
Governance framework and Group structure
98-99
Board of Directors: division of responsibilities
98-99
Board and Committee meetings
107
Directors’ independence
100, 114
Board and Committee attendance during 2024
107
Composition, succession and evaluation
Page
Board biographies
94-96
Board composition
100-101
Nominations Committee report
112-115
Appointment, re-election, resignation
and removal of directors
100, 114
Board evaluation
109
Audit, risk and internal controls
Page
Audit and Compliance Committee report
120-128
Fair, balanced and understandable confirmation
111, 122, 124
Confirmation reassessment of emerging
and principal risks
74
Risk management and internal control
72-74
Principal risks and uncertainties
75-87
Remuneration
Page
Remuneration Committee Chair’s statement
129-131
Directors’ Remuneration report
132-152
Alignment with Provision 40
135
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Financial Statements
Sustainability Statement
Corporate Governance
International Airlines Group | Annual Report and Accounts 2024
97
Key matters reserved to the
Board are:
• Submission of proposals to the
shareholders’ meetings
• Preparation of the annual
statutory disclosures
• Approval of the Group’s strategy,
business and financial plans
• Approval of the Group’s
general policies
• Appointment and removal
of senior executives
• Determination of the policy
on shareholders’ remuneration
• Approval of significant investment
or divestment decisions
• Approval of the risk management and
control policy, setting risk appetite
• Ensuring the effectiveness of the
corporate governance system
Further details are set out in the
Decision-making, reserved matters
and delegation section.
The Chairman:
• Chairs general shareholder meetings
• Leads the Board’s work
• Sets the Board’s agenda and facilitates
its discussions and deliberations
• Acts as main link with the Group
CEO and management
• Seeks regular engagement with
major shareholders
• Promotes and ensures the highest
standards of corporate governance
The Senior Independent Director:
• Acts as a sounding board for the
Chairman and leads the evaluation
of their performance
• Serves as an intermediary for other
directors when necessary
• Available to shareholders if concerns
are not resolved through normal
channels
The Group CEO:
• Is responsible and accountable
to the Board for the management
and operation of the Company
• Leads the Company’s
management team
• Develops an effective
management strategy
• Oversees the preparation of
operational and commercial plans
• Puts in place effective controls
• Coordinates Group activities
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Financial Statements
Sustainability Statement
Corporate Governance continued
IAG governance framework
and division of responsibilities
International Airlines Group | Annual Report and Accounts 2024
98
IAG Board of Directors
The Board has ultimate
responsibility for the long-term
success of the Group and for
delivering sustainable shareholder
value as well as contributing to
wider society
Key positions:
Chairman
Javier Ferrán
Senior Independent Director
Heather Ann McSharry
Board Advisory Committees
Audit and
Compliance
Nominations
Remuneration
Safety,
Environment
and Corporate
Responsibility1
IAG Management Committee
Led by the Group Chief Executive,
is responsible for the day-to-day
management of the Company.
The Management Committee is
responsible for the performance
of the Group and the
implementation of the strategy
approved by the Board
Key position:
Group CEO
Luis Gallego
The corporate governance framework was last approved by the Board on 27 February
2025.
Delegation
Accountability
1 From 27 February 2025, the Environment and Corporate Responsibility Committee.
Group structure
As the Group’s parent company, IAG is
responsible for managing and allocating
capital, driving overall Group
performance and setting the agenda
for sustainability and innovation.
Each operating company is fully
accountable for its own performance,
is commercially and operationally
independent, has its own customer value
proposition and its own relationship,
people and stakeholder management.
There is active engagement and
collaboration between the Group's
operating companies, facilitated by the
parent company, so that ideas and
expertise can be shared and progress
tracked where necessary. In this context,
the parent company sets the ambition,
drives the management and pipeline of
top talent, promotes the sustainability
agenda, facilitates the capture of
synergies, drives innovation and
provides centres of excellence to
facilitate the sharing of best practice.
Further details on the Group structure
can be found in the Business model
section within the Strategic report.
Board of Directors: division
of responsibilities
The IAG Board is responsible for
establishing the Company’s purpose,
values and strategy, promoting its
culture, overseeing the business and its
performance, as well as for the Group’s
long-term sustainable success. As stated
in the Board Regulations, which are
available on the Company’s corporate
website (www.iairgroup.com), the Board
endeavours to reconcile the corporate
interest with the legitimate interests of
employees, suppliers, customers and
other affected stakeholders, while also
taking into consideration the impact of
its activities on the community as a
whole and on the environment.
Examples of this long-term focus and
consideration of stakeholders’ interests
are discussed further in this report and
in the Stakeholder engagement section.
Consistent with its governance role,
the Board of Directors retains a schedule
of matters reserved for its decision,
as detailed in article 3.4 of the Board
Regulations. This schedule of reserved
matters was reviewed at the Board
meeting held on 27 February 2025
(available on the corporate website).
The Board has four advisory committees
that provide dedicated focus on a
number of areas. Each Board committee
comprises non-executive directors only
and has an experienced independent
non-executive chair. Copies of the
minutes of all committees’ meetings as
well as the documents distributed ahead
of each committee meeting are made
available to all Board members.
The different Board positions and their
respective responsibilities are detailed
in the Board Regulations as amended
on 27 February 2025 (available on the
corporate website). The Board also has
separate regulations for each of the
Board committees, which were reviewed
as part of the governance review
completed in February 2025.
These regulations are also available
on the corporate website. The roles,
membership and activities of these
committees during 2024 are described
in the individual reports within this
Corporate Governance report.
There is a clear separation of the roles
of the Chairman and the Group CEO,
their main responsibilities
are established in articles 5 and 6 of the
Board Regulations. The Chairman
is responsible for the operation of the
Board and for its overall effectiveness
in directing the Company. The Group
CEO and his management team are
responsible for the day-to-day
management and performance of the
Group and for the implementation of
the strategy approved by the Board.
All the powers of the Board have been
permanently delegated to the Group
Chief Executive save for those that
cannot be delegated pursuant to
applicable legislation, the Company
Bylaws or the Board Regulations.
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
99
Board composition
The IAG Board comprises eight independent non-executive directors, one of whom is the Chairman; two proprietary non-executive
directors (as described below); and one executive director, IAG’s Group Chief Executive. The biographies of all members of the
Board are set out in the Board of Directors section.
Giles Agutter did not stand for re-election at the 2024 Annual Shareholders’ Meeting, having first been appointed as a proprietary
director in 2020. To fill this vacancy, Bruno Matheu was appointed as a proprietary non-executive director, at the proposal of the
significant shareholder Qatar Airways, at the Annual Shareholders’ Meeting held on 26 June 2024.
As set out in the Company’s Bylaws, the Board shall comprise a minimum of nine and a maximum of 14 members. As at 31 December
2024, the Board composition was:
Name of Board member
Position/category
First appointed
Javier Ferrán
Chairman
20 June 2019
Luis Gallego
Group Chief Executive
8 September 2020
Heather Ann McSharry
Senior Independent Director
31 December 2020
Peggy Bruzelius
Director (independent)
31 December 2020
Eva Castillo
Director (independent)
31 December 2020
Margaret Ewing
Director (independent)
20 June 2019
Maurice Lam
Director (independent)
17 June 2021
Bruno Matheu
Director (proprietary)
26 June 2024
Robin Phillips
Director (proprietary)
8 September 2020
Emilio Saracho
Director (independent)
16 June 2016
Nicola Shaw
Director (independent)
1 January 2018
The Board Secretary is Álvaro López-Jorrín, partner in the Spanish law firm J&A Garrigues, S.L.P., and the Deputy Secretary
is Lucila Rodríguez. The Group Chief Financial and Sustainability Officer, Nicholas Cadbury, and the Group General Counsel, Sarah
Clements, also attend Board meetings.
Directors’ independence
The Board, as reported by the
Nominations Committee, reviewed
directors' independence at its meeting
held on 29 January 2025 and is satisfied
that those directors classified as
independent are free from any business
or other relationship that could
materially interfere with exercising an
independent view, both as a question of
character and judgement. Further details
on conflicts of interest and the
independence of directors can be found
later in this report and in the
Nominations Committee report.
The Chairman was considered
independent on appointment and
neither he nor any of the non-executive
directors has exceeded the maximum
nine-year recommended term of service
set out in the UK Corporate
Governance Code.
In line with the succession planning
for the Board, Emilio Saracho does
not intend to stand for re-election at the
next Annual General Meeting, after nine
years as a member of the Board. More
information on Board changes and
succession planning can be found in
the Nominations Committee report.
Appointment, re-election,
resignation and removal of directors
IAG directors are appointed for a period
of one year, as set out in the Company's
Bylaws. At the end of their mandate,
directors may be re-elected one or more
times for periods of equal duration to
that established in the Bylaws. In this
way, the Company complies with the
UK Code recommendation that directors
should be subject to annual re-election.
Re-election proposals are subject to a
formal process, based on a Nominations
Committee proposal in the case of
independent directors or its
recommendation for all other categories
of directors. This proposal or
recommendation is prepared having
due regard to the performance,
commitment, capacity, ability and
availability of the director to continue
to contribute to the Board with the
knowledge, skills and experience required.
Directors cease to hold office when
the term of office for which they were
appointed expires.
The selection and appointment process
is described in the Nominations
Committee report.
Notwithstanding this, a director must
resign under article 17.2 of the Board
Regulations, if among other matters,
the director ceases to have the good
standing, suitability, reliability,
competence, availability or commitment
to office necessary to be a director
of the Company or when his or her
remaining on the Board might affect
the Company’s credibility or reputation
or otherwise jeopardise its interests.
According to article 24.2 of the Board
Regulations, directors have several
disclosure obligations, including the duty
to inform the Company of any situation
in which they are involved which may
seriously affect the reputation of the
Company, in particular if they are
involved in any investigation related
to a criminal proceeding. In such
circumstances, the Board would
consider the case as soon as practicable
and adopt the decisions it deems fit,
following a report by the Nominations
Committee and taking into account the
corporate interest.
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The Board may only propose the
removal of a non-executive director
before the end of a term if, after
receiving a report from the Nominations
Committee, it considers there is just
cause. For these purposes, just cause is
deemed to exist when the director takes
up new positions or enters into new
obligations that prevent the director
from dedicating the necessary time
to the performance of their duties as
a director, otherwise breaches their
duties as a director or unexpectedly
becomes subject to any of the
circumstances set out in article 17.2
of the Board Regulations.
Removal may also be proposed as a
result of a takeover bid, merger or other
similar corporate transaction that results
in a material change of control.
The rules on the actions and
communication required from a director
who stands down before the end of
their term in office are set out in the
Board Regulations.
Diversity
The Board has a balance of members
with more than 40% being women;
including a woman as the Senior
Independent Director and three women
chairing Board advisory committees.
At least one member of the Board
is from an ethnic minority background.
The Board supports diversity in a
broader context, considering several
factors to optimise Board composition.
In addition to taking into account skills,
gender and experience, the Board
ensures compliance with regulatory
requirements including the need
to have more than half the Board being
independent EU nationals.
Further details on the Group’s Equity,
Diversity and Inclusion policy
can be found in the Nominations
Committee report.
Board composition by nationality
Board composition by gender
Board composition by tenure1
Board experience2
1
Tenure, which is as at the 2025 Annual Shareholders’ Meeting, comprises solely independent non-executive directors, including the Chairman
(eight directors). The three remaining directors’ tenure is over four years for two of them and less than one year for the other.
2 Non-executive directors only.
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101
5
6
Female
Male
6
2
0-3 years
4-6 years
7-9 years
Spain
UK
Ireland
Sweden
Luxembourg
France
40%
70%
30%
100%
20%
20%
80%
10%
Related industry
General management
Consumer Brands B2C
Corporate transactions
ESG/Sustainability
CEO/Chair experience in a listed company
Accounting, financial and related
Technology
Board leadership
and company purpose
Under the leadership of the Board, our
purpose, culture, and values, together
with our strategy, define how we work
and how we run our business to drive
the Group's long-term sustainable
success. This is supported by our robust
corporate governance framework
and illustrated by our business model
(set out in the Business model section),
which explains how we create
sustainable value for our shareholders
while contributing to all our key
stakeholders and society at large.
The Board, supported by its committees,
is responsible for setting and overseeing
the implementation of the Group's
strategy, ensuring the implementation of
an appropriate risk management
framework and monitoring sustainable
financial and business performance.
IAG's culture and governance framework
ensure that the Board has the
information it needs to assess the risks
and opportunities facing the Group.
This is evidenced by the information
provided in the following sections of this
report on the work of the Board and its
various committees during the year.
The Board and its committees have
been very active in this area during
2024, helping to promote and
strengthen the Company's policies and
practices, starting with the revision of
the Group's Code of Conduct, which was
approved at the Board meeting on 1
August following a detailed review and
discussion at the Audit and Compliance
Committee.
Further details of IAG's purpose and
values can be found throughout this
annual report, including in the People
section. Information on our corporate
governance framework, the work of the
Board and the policies and procedures
in place is set out in detail in this
Corporate Governance report and in the
reports of the various Board
committees.
Corporate culture
The Board recognises the importance
of culture and setting the tone of
the organisation from the top and
embedding it throughout the Group.
Our culture is a key component in
continuing to make progress with our
strategic and transformation plans and
therefore the Board has continued to
focus on and support the development
of a healthy Group culture that supports
our ambition and transformation and
is aligned with our core values and
purpose.
In addition to the Group's shared values,
each operating company has its own
unique culture, which enables them
to deliver its own brand commitment
and an exclusive customer experience.
People policies are implemented and
are progressing to provide attractive
and inclusive colleague experiences
that support a broader business strategy
and enhance operational performance.
In 2024, the Board continued to assess
and monitor culture, actively supporting
management’s efforts to evolve IAG’s
culture and maintaining the focus on
creating an inclusive, supportive and
healthy working environment. In addition
to other specific measures to evaluate
employee engagement and satisfaction,
the Board reviewed the results of the
twice-yearly OHI surveys completed by
employees in May and November 2024,
respectively.
In addition, certain designated directors
conducted engagement visits, meeting
colleagues across all operating
companies in London, Madrid, Dublin
and Barcelona. The Board considered
the results of such visits at its December
meeting, serving as valuable input for
its decision-making process.
At the Board strategy meeting in
October 2024, a specific session was
devoted to the People and Culture
strategy, including updates on culture,
diversity and inclusion. The Nominations,
Remuneration, and Safety Environment
and Corporate Responsibility
committees were briefed on a variety
of topics related to workforce and
personnel, such as talent management
and succession planning, inclusion
and diversity initiatives and
employee compensation.
Finally the Audit and Compliance
Committee regularly reviews the
Group's ‘Speak Up’ arrangements, their
effectiveness and the reports arising
from their operation (further information
is provided in the Audit and Compliance
Committee report).
Investment in the workforce
The IAG model empowers each
operating company to deliver for its
customers and people, with each being
responsible for managing recruitment,
pay and conditions for their colleagues,
as well as careers and development.
Group companies invest in their
employees through training and
development programmes, as well as
through healthcare and wellbeing
initiatives.
Across the Group we look to ensure that
all rewards and benefits are simple,
clear, competitive and fair. Around 85%
of the workforce is covered by collective
bargaining agreements. We work closely
with employee representatives to
consult on reward matters. For those
employees outside collective
agreements, we benchmark roles and
rewards against local markets to ensure
they remain attractive and competitive.
Further information on workforce
remuneration can be found in the
Directors Remuneration report and
Sustainability statement.
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Decision-making and
stakeholder interests
Section 172 Statement
(and compliance with article
3.6 of IAG’s Board of Directors’
Regulations)
Section 172 of the UK Companies Act
2006 requires directors of a company
to promote the long-term success of the
company for the benefit of its members
and to consider the interests of other
stakeholders in their decision-making.
This is in line with Recommendation 12
of the Spanish Corporate Governance
Code, which is reflected in article 3.6
of our Board of Directors' Regulations.
Given the nature of our business,
we recognise the importance of
stakeholder engagement to inform
our strategy and the way in which
we operate. This section describes
how the directors, in their deliberations
and decision-making, consider the
interests of stakeholders to create value
and promote the long-term success
of the Company. As these interests can
conflict, the directors need to balance
stakeholder interests with the corporate
interest, including consideration
of the impact of activities on the
environment and the communities
in which we operate.
Throughout the reporting period, the
directors acted in good faith, with unity
of purpose and independent judgement,
upholding high standards of business
conduct and treating shareholders fairly.
Feedback from stakeholders received
by different areas of the business helps
to inform decisions overseen by the
Board. Where relevant, the views of
stakeholders are incorporated in the
proposals presented to the Board for
consideration or decision. In addition,
the diverse set of skills, knowledge and
experience of Board members enables
them to apply the appropriate level
of rigorous challenge and evaluation
to decisions.
Further details on how the provisions
of Section 172 were considered can also
be found throughout the Strategic and
Corporate Governance reports. The
Board of Directors’ Regulations as well
as the Group policy on delegation and
decision-making ensure that relevant
matters are escalated to the Board for
consideration and that information is
provided to directors with sufficient time
for its analysis and consideration.
Directors also participate in the design
of the Board plan of activities for the
year, setting the priorities for the Board
and including any topics requested by
directors. Further information is
provided in the Information and training
section of this report.
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Board decisions, corporate interests and stakeholders
The table below outlines how the provisions of section 172 (1) of the UK Companies Act and article 3.6 of the IAG Board of Directors
Regulations are considered by the Board.
Section 172 (1)
provision
Description of Board activity supporting decisions
Further information in the Annual
Report and on the Company’s website
a Decisions for
the long
term
• Monitor the delivery of transformation plans that have helped to position
IAG competitively against other airlines.
• Review of capital allocation guidelines and shareholder returns.
• Market, sustainability and industry trends considered throughout the year
for the design of the strategic priorities.
• Enterprise risk map and risk appetite review.
• Operational and strategic measures have been implemented to encourage
IAG´s long-term sustainable success.
• Approval of capital expenditures, financial transactions, contractual
commitments, investments and divestments and other transactions.
• Review and analysis of long-term incentive plans for the management team.
• Strategic partnerships carried out, contributing to capital-light
earnings growth.
• Business model
• Strategic priorities
• Sustainability
• Board activities during
the year
b Employee
interests
• Updates on Group-wide OHI surveys which have played a key role in
shaping people plans and tracking progress on culture transformation.
• Designated directors for workforce engagement visited various operating
company units and reported to the Board on the feedback received.
• Review and update of management succession planning and talent
development, including update on management changes.
• Review of diversity policies and diversity and inclusion matters in general.
• Workforce remuneration update (Remuneration Committee).
• Monitoring the implementation of the ‘Speak Up’ Policy and procedures,
and related investigations.
• Stakeholder engagement
• Corporate Governance
report (workforce
engagement)
• Sustainability statement
• Nominations Committee
report
• Remuneration Committee
report
• Audit and Compliance
Committee report
c Business
relationships
with
suppliers,
customers
and others
• Updates from operating company CEOs on customer initiatives.
• Reports driving customer loyalty and growth for the operating companies.
• Update of the Modern Slavery & Human Trafficking Statement.
• Review from the SECR Committee regarding stakeholder engagement.
• Audit and Compliance Committee review of complaints and
whistleblowing reports.
• SECR Committee review of compliance with social practices and policies,
and progress against key metrics.
• SECR Committee review of Third Party Code of Conduct and Human
Rights Policy.
• Business model
• Stakeholder engagement
• Sustainability statement
• SECR Committee report
• Audit and Compliance
Committee report
d Community
and
environment
impact
• Ongoing work of the SECR Committee to review compliance with
environmental practices and policies.
• SECR Committee review of sustainability (ESG) ratings review.
• SECR Committee review of compliance with social practices and policies,
such as community giving and fundraising.
• Regular CEO updates regarding sustainability matters.
• Review of SAF projects.
• Sustainability session at the Annual Strategy Meeting.
• Business model
• Strategic report
• Sustainability statement
• SECR Committee report
e Reputation
for high
standards
of business
conduct
• Review and approval of an updated Code of Conduct and Third Party
Code of Conduct.
• Ethics and Compliance updates to the Audit and Compliance Committee,
including whistleblower review.
• Regular Internal Audit reports to the Audit and Compliance Committee.
• Stakeholder engagement
• Sustainability Report
• Audit and Compliance
Committee report
• SECR Committee report
f Fairness
between
shareholders
• Review by the Audit and Compliance Committee of related party transactions.
• Review of investor feedback from the 2024 Shareholders’ Meeting.
• Regular Investor Relations reports.
• Regular feedback from Investors Relations about alternatives and
expectations and possible courses of action on shareholders remuneration.
• Shareholders Meeting hybrid format to promote and facilitate greater
participation from institutional shareholders.
• Remuneration and Corporate Governance engagement with investors
and proxy advisory firms.
• Presentation by corporate brokers regarding shareholders views.
• Business model
• Stakeholder engagement
• Corporate Governance
report (directors’ duties,
conflicts of interest and
related party transactions)
• Audit and Compliance
Committee report
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Examples of relevant decisions taken during the year
In each instance, the Board was provided with a detailed analysis of the proposal, including potential alternatives, feasibility and risk
assessment, as well as synergies across the Group, as relevant.
Dividend distribution and share
buyback programme
SAF purchase
On 1 August 2024, the Board approved the distribution of an
interim gross cash dividend of €0.03 per share to be paid to
shareholders based on the 2024 results.
In addition, on 8 November 2024 the Board approved a share
buyback programme of €350 million.
As part of its sustainability roadmap, on 28 February 2024, IAG
announced the agreement with Twelve for the supply to its five
European airlines (British Airways, Iberia, Aer Lingus, Vueling
and LEVEL) of approximately 785,000 tonnes of SAF. This
agreement was approved on 18 January 2024 by the Board.
On 25 November 2024, IAG announced a new e-SAF deal with
Infinium for a period of ten years, which had been previously
approved by the Board on 1 August 2024, remaining on track
to deliver its 2030 target.
In addition, as part of its sustainability roadmap, IAG is also
investing in new aircraft and implementing fuel efficiency initiatives.
Section 172(1) provisions
Section 172(1) provisions
(a), (c), (d), (e), (f)
(a), (c), (d), (e)
Considerations
Considerations
• Returning capital to shareholders as soon as the operating
environment and financial performance allowed IAG to do
so in a sustainable manner.
• Reflecting confidence in the strategy and business model,
and the long-term prospects of the business.
• Reflecting strong financial health.
• Ensuring a fair return to shareholders, upholding IAG’s
reputation for maintaining high standards of business
conduct and financial prudence.
• Reflecting the Board’s commitment to enhancing
shareholder value and confidence, ensuring that the
Company remains an attractive investment.
• Ensuring all shareholders benefit proportionately from the
Group’s financial performance.
• Shareholder remuneration policy decisions, may not suit all
financial stakeholder profiles, requiring a balancing of views
with the corporate interest.
• Reflecting commitment to long-term sustainability goals,
which is one of the pillars on which the Group bases its
strategy and transformation.
• Ensuring a steady supply of SAF, which is crucial for meeting
IAG’s 2030 sustainability targets.
• Increasing production of e-SAF, which is a critical milestone
for the airline industry and for e-fuels as an alternative to both
fossil-based fuels and prior generations of SAF.
• Fostering strong business relationships with key suppliers.
• Reflecting a responsible approach to environmental
stewardship, benefitting the broader community by
contributing to global efforts to combat climate change.
• Enhancing IAG’s reputation for exemplary business practices.
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Decision-making, reserved matters
and delegation
The IAG Board has delegated the day-
to-day management of the Group to the
Group Chief Executive and the Group’s
Management Committee but it has
reserved authority for itself on several
matters, including three key areas as set
out below:
• Approval of the Group strategy and
the supervision of its implementation,
which entails the approval of the
business plan, management objectives
and annual financial plan, as well as
monitoring of the internal information
and control systems, and of the risk
management framework and processes;
• Approval and compliance oversight
of the Group general policies
including: investment and financing
policies; enterprise risk management
policy; and any corporate responsibility
or sustainability policies; and
• According to certain quantitative
thresholds, the approval of contractual
commitments, asset acquisitions or
disposals, capital expenditures,
borrowings, and equity investments.
The Group’s decision-making process is
regulated by an internal policy covering
the IAG Board, the IAG Management
Committee as well as the boards of the
main subsidiaries. In addition, another
policy regulates the Group’s investment
process. This authority framework
and the support provided by the Board
advisory committees underpin the
effective operation of the
governance system.
As indicated above, there are occasions
where the Board may have to make
decisions balancing the competing
priorities of stakeholders. The principles
set out in article 3.6 of our Board
Regulations, which align with those
reflected in section 172 of the UK
Companies Act, are embedded
throughout the Group’s decision-
making processes.
Stakeholders’ interests
Day-to-day stewardship of stakeholder
relationships is delegated to
management, with the Board having
a supervisory role based on the
information provided and discussions
held with management teams. In
addition to this, the Board has direct
engagement with the Company’s
shareholders and with the workforce
as recommended by the UK Corporate
Governance Code.
Information on the Board’s engagement
with the workforce is provided in the
Workforce engagement section of this
Corporate Governance report.
More information on our stakeholders
and our engagement with them can be
found in the Stakeholder engagement
section of this annual report.
Shareholders and investors
Shareholder interests are key in the
Board’s considerations. The Board
maintains a direct and active dialogue
with shareholders and investors, mainly
through the Group CEO and the Chief
Financial and Sustainability Officer who
meet with shareholders and investors on
a regular basis, as well as through the
Chairman, the SID or the committee
Chairs as appropriate. In 2024, the
Chairman met significant shareholders
to discuss governance matters, as well
as the performance of the Group and its
strategy. In addition, the Chair of the
Remuneration Committee held meetings
with investors to discuss remuneration
matters, and in particular the approach
to the review of the Remuneration
Policy. All directors had the opportunity
to meet individual shareholders at the
Shareholder’ Meeting held in June 2024.
The Board is regularly apprised of
shareholders’ feedback and the main
issues discussed with shareholders and
investors. One of our major shareholders
attended the June Board dinner to give
their views on the Group, its strategy
and its progress as well as on wider
market trends.
Positive feedback was received during the
year on the Group’s progress against the
strategy that was set out at the 2023 CMD.
In particular shareholders have welcomed
the return to payment of an interim
dividend as announced at the half-year
results in August, as well as the share
buyback announced at the third-quarter
results in November. In November analysts
and investors attended a British Airways
Insight Day at which the Group CEO
reiterated IAG’s commitment to
sustainable shareholder value creation
and cash returns. In particular he focused
on our strategy to deliver world-class
margins and returns, a significant part
of which would be delivered by an
improvement to British Airways’ profit
and operating margin. Two other key
elements include the increasing value
of the Spanish businesses, as well as the
attractiveness of IAG Loyalty.
At the same time, analysts and investors
noted that the higher level of investment
would have a detrimental short-term
impact on margins and free cash flow.
Additional information can be found
in the Stakeholder engagement section
of this annual report.
Workforce engagement
During 2024, the designated workforce
engagement directors visited operating
companies and platform businesses
across IAG to meet a variety of
employees and leaders in their work
context, with the goal of understanding
first-hand the challenges and
opportunities of the different businesses,
employee issues and levels of
engagement. These visits continue to be
valuable in understanding what matters
to colleagues across the business, from
ground and flight operations to our
customer support and corporate teams,
and in involving a mix of new recruits
and colleagues with long tenure
reflecting the changing composition
of the Group’s workforce.
Eva Castillo remains the director
responsible for coordinating the
workforce engagement. She was
supported during 2024 by Heather
Ann McSharry, Margaret Ewing, Maurice
Lam, Emilio Saracho and Nicola Shaw.
In 2024, the designated directors
conducted nine engagement visits,
meeting colleagues across all
operating companies and across our
four main hubs (London, Madrid, Dublin
and Barcelona).
Board members noted the progress
made on transformation across all areas
and the increased investment in the
people agenda, particularly in terms
of careers, development and training.
The Board noted high levels of pride
and commitment at all sites, with
positive engagement and morale in
the majority of teams.
While each visit highlighted some
specific local challenges, several
key themes emerged. These included
transformation, new recruits,
engagement and organisational health,
and competitive pay. Each visit included
a debrief with senior teams on emerging
issues to ensure appropriate actions
are taken forward.
For further detail on the outcomes of
broader employee engagement activities,
refer to the Stakeholder engagement
section of this annual report.
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The Board considered the results
of the 2024 workforce engagement
programme and reviewed the
effectiveness of this engagement at
its December meeting. This feedback
serves as valuable input for decision-
making processes related to people
and culture strategies and organisational
transformation.
In addition to its direct engagement
with employees, the Board has been
regularly informed about initiatives
at each operating company with respect
to its workforce. A session at the annual
Board strategy meeting was devoted
to the people and culture strategy,
including updates on talent, culture,
diversity and inclusion, reward,
leadership and data/reporting.
The Remuneration Committee was
updated on workforce remuneration
and how the operating companies were
supporting colleagues with cost-of-living
challenges, ensuring reward remained
fair and competitive, and how the
experience of IAG’s workforce
compared to that of senior leaders.
The Nominations Committee was
updated on succession planning for
senior leadership, including an overview
of recruitment, mobility and attrition
of senior leaders across the Group.
Board and committee meetings
The Board met nine times during the
year, including its annual two-day
strategy meeting held in October 2024.
Details of attendance at Board and
committee meetings are shown below.
The Board Secretariat together with
the Group General Counsel maintain
an annual agenda schedule for Board
meetings that sets out strategic,
standard and operational matters to
be considered. The Chairman sets
a carefully structured agenda for each
meeting in consultation with the Group
Chief Executive, with support from the
Group General Counsel and the Board
Secretariat. During 2024, the Board’s
main focus was to create sustainable
value over the long term, by supporting
management and exercising oversight
over the Group’s businesses and
stakeholders’ interests. The key activities
of the Board in 2024 are detailed in
the Board activities table further on
in this report.
At each Board meeting, the Board
receives a report from each of the Chairs
of the committee meetings held prior
to that Board meeting. The reports focus
on the key discussions and decisions
considered by the respective
committees, providing an opportunity
for directors to comment or ask
questions on the matters dealt with
by each committee and to ensure
that all Board members remain apprised
of committee activities. In addition,
the Group CEO and the Chief Financial
and Sustainability Officer report to the
Board on key matters in the Group.
All scheduled Board meetings include
a private session for non-executive
directors to meet with the Chairman
to discuss any matters arising. At least
once a year there is a private meeting
with the Chairman that includes
independent non-executive directors
only. The Senior Independent Director
also meets with the non-executive
directors, without the Chairman,
as part of the Chairman’s annual
evaluation process.
As stated in the Board Regulations,
directors must make their best efforts
to attend Board meetings. If this is
not possible, they may grant a proxy
to another non-executive director
specifically for that meeting. No director
may hold more than three proxies,
except for the Chairman, although
he cannot represent more than half of
the Board members. As far as possible,
proxies should be granted including
voting instructions.
Board and committee attendance during 2024
Board member
Board
Audit and Compliance
Committee
Nominations
Committee
Remuneration
Committee
Safety, Environment and Corporate
Responsibility Committee
Javier Ferrán
9/9
6/6
Luis Gallego
9/9
Giles Agutter1
2/4
2/4
1/2
Peggy Bruzelius
8/9
7/7
6/6
Eva Castillo
9/9
7/7
7/7
Margaret Ewing
9/9
7/7
6/6
Maurice Lam
9/9
7/7
4/4
Bruno Matheu2
4/5
2/2
Heather Ann McSharry
9/9
6/6
7/7
Robin Phillips
9/9
4/4
Emilio Saracho
9/9
7/7
4/4
Nicola Shaw
9/9
7/7
4/4
1
Stepped down from the Board and Committees on 26 June 2024.
2 Joined the Board and the Safety, Environment and Corporate Responsibility Committee on 26 June 2024.
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Corporate Governance
Financial Statements
Sustainability Statement
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Board activities
The key Board activities during 2024 are
outlined below.
Strategy and planning
Joint Board/Management Committee
two-day strategy session in October,
including:
• Regional strategies and strategic
partnerships
• Innovation strategy
• Sustainability
• People and culture
• IT capability transformation
• Business plan and financial update
Performance and monitoring
• Regular reporting from operating
companies, including
transformation updates
• Quarterly and full-year financial
reporting
• Monthly financial report
(reviewed at the relevant meeting
or distributed to all Board members)
• Review of various joint business
arrangements
Significant transactions, investments
and expenditures
• Updates on the proposed
Air Europa transaction
• Financing arrangements
• Capital expenditures items
• Treasury shares buyback programmes
• SAF provision agreements
• IT projects
Risk management and internal controls
• Review of risk map and risk appetite
performance and statements
• Assessment of viability and
going concern
• Effectiveness review of the internal
control and risk management systems
• External auditor’s yearly report
• IT updates, including cyber and AI
Shareholders, stakeholders and
governance
• Shareholders returns
• Transactions with related parties
• Sustainability update
• Shareholders’ and investors’ updates
• Board and management succession
• Remuneration matters
• Shareholders meetings call notices
and proposed resolutions
• Board and committees’ evaluation
and improvement priorities
• Update on the Directors’ and Officers’
insurance programme
• Updates on corporate governance
• People and culture update, including
new code of conduct and approval
of several new policies
• Regular reporting from matters
discussed by the Audit and
Compliance Committee, the
Nominations Committee, the
Remuneration Committee and the
Safety, Environment and Corporate
Responsibility Committee
Board information and training
In general, all Board and committee
meeting documents are available to all
directors ahead of meetings, including
the minutes of each meeting, through
an online platform that facilitates
efficient and secure access to all
materials. All directors have access to
the advice of the Board Secretary and
the Group General Counsel. Directors
may take independent legal, accounting,
technical, financial, commercial or other
expert advice at the Company’s expense
when it is judged necessary in order to
discharge their responsibilities
effectively. No such independent advice
was sought in the 2024 financial year.
Directors are offered the possibility
to update and refresh their knowledge
of the business and any technical related
matter on an ongoing basis to enable
them to continue fulfilling their
responsibilities effectively. Directors
are consulted about their training
and development needs and given
the opportunity to discuss these as
part of the Board annual
performance evaluation.
In 2024, the training needs of the Board
were met through a combination of
internal presentations and updates as
part of Board and Committee meetings,
and specific sessions or ‘deep dives’ into
topics as required. Sessions held
included: a session on fleet financing
provided internally, a session on AI, on
the new Corporate Sustainability
Reporting Directive, and on corporate
governance developments, including the
2024 UK Governance Code. An investor
was also invited to one of the Board
dinners to provide an external
perspective. Training planned for 2025
includes sustainability, technology topics
and industry specifics.
Induction of directors
According to the induction guidelines,
approved by the Nominations Committee,
on joining the Board every newly
appointed director has a thorough and
appropriate induction. Each programme
is based on the individual director’s
needs and includes meetings with other
directors, senior management and key
external advisers as appropriate. The
induction is designed to provide a wide
overview of the industry and the sector,
including particulars of each of the
markets in which the Group operates,
as well as an understanding of the
Group’s business model and its different
businesses. The programme is also a
useful tool to introduce the new director
to the IAG Management Committee as
well as to the different operating
companies’ teams.
An induction programme was launched
for Bruno Matheu following his
appointment in June 2024. The basic
content of the programme included:
• Origin of the Group’s business basics
and strategy
• Spanish corporate legal framework.
and UK and Spanish corporate
governance requirements
• Group governance structure
• IAG compliance programme and
litigation status
• Aviation regulation
• M&A briefing and strategy
• IAG capital structure, principal
shareholders and analyst coverage
• Sustainability programme
• IAG finance particulars and financial
targets (including fleet acquisition,
hedging policy and risk map)
• IAG brands portfolio
• IAG platform
• Business model, competitive landscape,
strategy and current position of each
of the operating companies.
In relation to each committee, newly
appointed members are also provided
with introductory sessions specific
to each committee and designed
in accordance with each director’s
interests and needs.
Further details are provided in the
Nominations Committee report.
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Corporate Governance
Financial Statements
Sustainability Statement
Corporate Governance continued
International Airlines Group | Annual Report and Accounts 2024
108
Board and committee
evaluation
The effectiveness of the Board and its
committees is reviewed annually, with
an independent, externally facilitated
review being conducted every three
years. An internal evaluation was
completed in 2024, as the last external
review was conducted in 2022.
This exercise was complemented by
individual meetings held by the
Chairman with each member of the
Board to discuss their commitment,
dedication and performance. Finally,
a meeting of all non-executive directors
and the Senior Independent Director
was held to discuss the Chairman's
performance, the conclusions of which
were then shared with him.
The Board evaluation was led by
the Chairman, supported by the Board
Secretariat, using a self-assessment
questionnaire, complemented by an
individual interview conducted by the
Chairman with each non-executive
director. The results were presented
in a report to all Board members, and
an action plan to address matters
raised was agreed.
In relation to the agreed actions for
2024, the Board considers that good
progress has been made during the year.
In particular, the Board evaluation
highlighted the strong working
relationship between the Board and
management, the progress made in
transforming the business and the
increased focus on culture and people.
In 2024, the Nominations Committee
continued its work to ensure that the
Board continues to have the relevant
skills and expertise identified as part
of the work to plan for orderly
succession on the Board. As agreed,
regular updates on shareholder and
investor engagement, including a
session with the corporate brokers and
a focus on customer experience and
the performance and operations of the
business, formed part of the Board's
agenda in 2024. The Board particularly
appreciated the quality and value of the
information provided by the IAG CEO in
his regular update at each meeting, as
well as the private session with him that
was added to the meeting agenda to
provide the opportunity for a direct
private conversation with the IAG CEO
after each meeting. In addition, several
training initiatives were completed
during 2024 as requested.
Actions agreed for 2025 include:
• Continued focus on Board succession
planning and identifying the
appropriate profiles to be added
to the Board;
• The Board's agenda will continue
to include the areas identified by the
directors in line with the work carried
out during 2024; and
• Continued focus on ensuring balanced
papers that clearly identify the
substantive points and key issues
for the Board's attention.
Other statutory information
Directors’ disclosure duties,
conflicts of interest and related
party transactions
Directors must inform the Company
of any participation or interest they
may hold or acquire in any company
that is a competitor of the Group, or
any activities that could place them
in conflict with the corporate interest.
According to article 21 of the Board
Regulations, directors have an obligation
to adopt all measures necessary to avoid
conflict-of-interest situations. These
include any situation where the interest
of the director, either directly or through
third parties, may conflict with the
corporate interest or with their duties
to the Company. In the event of a
conflict, the affected director must
inform the Company and abstain from
participating in the discussion of any
transaction referred to by the conflict.
For purposes of calculating the quorum
and voting majorities, the director in
question would be excluded from the
number of members present.
The 2024 Annual Shareholders’ Meeting
held on 26 June 2024 approved the re-
election of Robin Phillips and the
appointment of Bruno Matheu, Giles
Agutter having stepped down at the
meeting, as non-executive proprietary
directors as proposed by IAG’s
significant shareholder Qatar Airways
Group (Q.C.S.C.) (‘Qatar Airways’). Qatar
Airways, a Middle East air carrier
headquartered in Doha, has been the
single largest shareholder of IAG since
2016, owning, as of the date of this
report, 24.995% of the share capital of
the Company. Throughout this period
there has been a long-standing business
and commercial relationship between
Qatar Airways and the Group airlines.
This close relationship of commercial
cooperation, which has always been
undertaken on an arm’s-length basis and
on market terms, significantly reduces
the potential existence of permanent
conflicts of interest between Qatar
Airways and the Group’s airlines.
As far as the relationship of the
proprietary directors with the significant
shareholder who proposed their
appointments is concerned, it should
be noted that Robin Phillips and Bruno
Matheu have no relevant connection
with Qatar Airways.
Any potential conflict of interest that
might affect such proprietary directors
is managed by applying the duty of
abstention in accordance with the
procedure for managing conflicts of
interest described below. In addition, the
Spanish and the UK regimes on related
party’ transactions are also applicable as
detailed below.
In accordance with article 3.4 of the
Board Regulations, the Board of
Directors has the exclusive authority
to approve transactions with directors
or shareholders that have a significant
holding or that are represented on the
Board, or with any persons related to
them, on the terms established in the
law and the Board Regulations and this
will require a prior report from the Audit
and Compliance Committee.
The execution of these types of transaction
needs to be reported to the Audit and
Compliance Committee to ensure that
they are carried out at arm’s length and
with due observance of the principle of
equal treatment of shareholders. IAG’s
internal regulations on related party
transactions establish that the Audit and
Compliance Committee needs to issue a
report to the Board assessing whether
the transaction is fair and reasonable
from the standpoint of the Company
and, where applicable, of shareholders
other than the related party, and report
on this assessment, including the
assumptions and methods used. Where
appropriate, the directors involved in
the transaction shall not participate
in the preparation of such a report.
Depending on the amount or value of
the proposed related party transaction,
varying corporate governance and
disclosure requirements may apply
under both the Spanish and UK
legal frameworks.
In accordance with IAG procedures
on related party transactions, prior to
the Audit and Compliance Committee’s
consideration, shareholder related party
transactions are also reviewed by the
IAG Management Committee and are
reported to the IAG Head of Group Audit.
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Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
109
Share issues, buybacks,
treasury shares and dealings
in IAG listed securities
The Annual Shareholders’ Meeting held
on 26 June 2024 provided authority for
the Board, with the express power of
substitution, for a term ending at the 2025
Annual Shareholders’ Meeting (or if earlier,
15 months from 26 June 2024), to:
• Increase the share capital pursuant
to Article 297.1.b) of the Spanish
Companies Law, by up to 50% of the
aggregate nominal amount of the
Company’s issued share capital as
at 26 June 2024 (such amount to be
reduced by the maximum amount that
the share capital may be increased by
on the conversion or exchange of any
securities issued as authorised below),
through the issue and placement of
new shares (with or without a
premium) for cash consideration;
• Issue securities (including warrants)
convertible into and/or exchangeable
for shares of the Company, up to a
maximum limit of 1,500,000,000
euros or the equivalent thereof in
another currency, provided that the
aggregate share capital that may be
increased on the conversion or
exchange of all such securities may
not be higher than 50% of the
aggregate nominal amount of the
Company’s issued share capital as at
26 June 2024 (such amount to be
reduced by the amount that the share
capital has been increased under the
relevant authorisation);
• Exclude pre-emptive rights in
connection with the capital increases
and the issuance of convertible or
exchangeable securities that the
Board may approve, under the
previous authorities, for the purposes
of allotting shares or convertible or
exchangeable securities, in connection
with a rights issue or in any other
circumstances, subject to an
aggregate maximum nominal amount
of the shares so allotted or that may
be allotted on conversion or exchange
of such securities of:
• 10% of the aggregate nominal
amount of the Company’s issued
share capital (excluding any shares
held in treasury) to be issued on an
unrestricted basis; and
• an additional 10% of the aggregate
nominal amount of the Company’s
share capital (excluding any shares
held in treasury) to be used for
either an acquisition or a specified
capital investment;
• carry out the acquisition of its own
shares directly or indirectly through
its subsidiaries, subject to the
following conditions:
• the maximum aggregate number
of ordinary shares authorised to be
purchased shall be the lower of the
maximum amount permitted by the
law and represents 10% of the
aggregate nominal amount of the
Company’s issued share capital on
26 June 2024;
• the minimum price per share which
may be paid is zero;
• the maximum price per share which
may be paid is the highest of:
• an amount equal to 5% above
the average of the middle market
quotations for the shares taken
from the relevant stock exchange
for the five business days
immediately preceding the day
of purchase; and
• the higher of the price of the last
independent trade and the
highest current independent
bid on the trading venues where
the transaction is carried out
at the relevant time;
in each case, exclusive of expenses.
The shares acquired pursuant to
this authorisation may be delivered
directly to the employees or
directors of the Company or
its subsidiaries or as a result of
the exercise of option rights held
thereby. For further details see
note 31 to the consolidated financial
statements.
The IAG Securities Code of Conduct
regulates the Company’s dealings
in its treasury shares. This can be
accessed via the Company’s website.
Capital structure and
shareholder rights
As at 31 December 2024, the share
capital of the Company amounted to
497,147,601 euros (2023: 497,147,601
euros), divided into 4,971,476,010 shares
(2023: 4,971,476,010 shares) of the same
class and series and with a nominal value
of €0.10 each (2023: €0.10 each), fully
subscribed and paid for.
As at 31 December 2024, the
Company owned 117,836,928 shares
as treasury shares.
Each share in the Company confers
on its legitimate holder the status of
shareholder and the rights recognised
by applicable law and the Company’s
Bylaws, which can be accessed
on the Company’s website.
The Company has a Sponsored Level 1
American Depositary Receipt (ADR)
facility that trades on the over-the-
counter market in the US. Each ADR
is equivalent to two ordinary shares
and each ADR holder is entitled to the
financial rights attaching to such shares,
although the ADR depositary, Deutsche
Bank, is the registered holder. As at
31 December 2024 the equivalent
of 31,884,274 shares were held in ADR
form (2023: 40,547,684 shares).
Company’s share capital
During the year there were no changes to the share capital.
The significant shareholders of the Company as at 31 December 2024, calculated according to the Company’s share capital as at the
date of this report and excluding positions in financial instruments, were:
Name of shareholder
Number of
direct shares
Number of
indirect shares
Name of direct holder
Total shares
Percentage
of capital
Qatar Airways (Q.C.S.C.)
1,242,630,613
–
1,242,630,613
24.995 %
Capital Research and
Management Company
248,648,015
Collective investment institutions
managed by Capital Research
and Management Company
248,648,015
5.001 %
On 14 February 2025 Europacific Growth Fund notified the Spanish CNMV the acquisition of a 3.036% interest in the Company.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Corporate Governance continued
International Airlines Group | Annual Report and Accounts 2024
110
Shareholders’ meeting
The quorum required for the constitution
of the shareholders’ meeting, the system
of adopting corporate resolutions,
the procedure for amending the Bylaws
and the applicable rules for protecting
shareholders’ rights when changing the
Bylaws are governed by the provisions
established in the Spanish Companies Law.
The Annual Shareholders’ Meeting
was held on 26 June 2024 in Madrid and
was held in person with the option for
shareholders to attend and participate
in the meeting remotely.
The Shareholders’ Meeting Regulations,
which establish the operating rules
of the shareholders’ meeting, are
available in the Corporate Governance
section of the Company’s website.
Disclosure obligations
The Company’s Bylaws establish a series
of special obligations concerning
disclosure of share ownership, as well
as certain limits on shareholdings, taking
into account the ownership and control
restrictions provided for in applicable
legislation and bilateral air transport
treaties signed by Spain and the UK.
In accordance with article 7.2 b) of the
Bylaws, shareholders must notify the
Company of any acquisition or disposal
of shares or of any interest in the shares
of the Company that directly or
indirectly entails the acquisition or
disposal of a stake of over 0.25% of the
Company’s share capital, or of the
voting rights corresponding thereto,
expressly indicating the nationality
of the transferor and/or the transferee,
obliged to notify, as well as the creation
of any charges on shares (or interests
in shares) or other encumbrances
whatsoever, for the purposes of the
exercise of the rights conferred by them.
In addition, pursuant to article 10 of the
Bylaws, the Company may require any
shareholder or any other person with a
confirmed or apparent interest in shares
of the Company to disclose to the
Company in writing such information as
the Company shall require relating to the
beneficial ownership of or any interest in
the shares in question, as lies within the
knowledge of such shareholder or other
person, including any information that
the Company deems necessary or
desirable in order to determine the
nationality of the holders of the said
shares or any other person with an
interest in the Company’s shares or
whether it is necessary to take steps
in order to protect the operating rights
of the Company or its subsidiaries.
In the event of a breach of these
obligations by a shareholder or any
other person with a confirmed or
apparent interest in the Company’s
shares, the Board may suspend the
voting or other political rights of the
relevant person. If the shares associated
with the breach represent at least 0.25%
of the Company’s share capital in
nominal value, the Board may also direct
that the transfer of any such shares is
not registered.
Limitations on ownership of shares
In the event that the Board deems it
necessary or appropriate to adopt
measures to protect an operating right
of the Company or of its subsidiaries, in
light of the nationality of its shareholders
or any persons with an interest in the
Company’s shares, it may adopt any of
the measures in article 11 of the Bylaws,
including the determination of a
maximum number of shares that may
be held by non-qualifying shareholders,
provided that such maximum may not
be lower than 40% of the Company’s
share capital. If such a determination is
made and notified to the stock market,
no further acquisitions of shares by non-
qualifying persons can be made.
In such circumstances, if non-qualifying
persons acquire shares in breach of such
restriction, the Board may also (i) agree
on the suspension of voting and other
political rights of the holder of the
relevant shares, and (ii) request that the
holders dispose of the corresponding
shares so that no non-qualifying person
may directly or indirectly own such
shares or have an interest in the same.
If no such transfer is performed on
the terms provided for in the Bylaws,
the Company may acquire the
corresponding shares (for their
subsequent redemption) pursuant to
applicable legislation. This acquisition
must be performed at the lower of the
following prices: (a) the book value of
the corresponding shares according
to the latest published audited balance
sheet of the Company; and (b) the
middle market quotation for an ordinary
share of the Company as derived from
the London Stock Exchange’s Daily
Official List for the business day
on which they were acquired by the
relevant non-qualifying person.
Impact of change of control
The following significant agreements
contain provisions entitling the
counterparties to exercise termination
in the event of a change of control
of the Company:
• Certain significant IAG financing
arrangements allow for prepayment,
redemption or early termination in
certain circumstances if there is a
change of control of the Company.
In addition, the Company’s share plans
contain provisions as a result of which
options and awards may vest and
become exercisable on a change of
control of the Company, in accordance
with the rules of the plans.
Directors’ and Officers’
liability insurance
The Company has purchased insurance
against Directors’ and Officers’ liability
for the benefit of the directors and
officers of the Company and its
subsidiaries. The Board receives an
annual update on the Group’s Directors’
and Officers’ liability insurance.
Fair, balanced and understandable
statement
The Board considers that the Annual
Report and Accounts, taken as a whole,
is fair, balanced and understandable and
provides the information necessary for
shareholders to assess the Company's
position and performance, business
model and strategy.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
111
Report of the
Nominations Committee
Dear shareholder
On behalf of the Nominations
Committee, I am delighted to present
the Nominations Committee Report for
the year ended 31 December 2024.
The report provides an overview of the
key areas of responsibility of the
Nominations Committee and its key
activities during the year.
As indicated in my introductory letter to
this report as Chair of the Board, Giles
Agutter stepped down from the Board
and therefore from this Committee at
the 2024 Annual Shareholders’ Meeting
in June. As with the Board, I would like
to thank him for his contribution as a
member of this Committee.
The role of this Committee is crucial in
guaranteeing that we have a Board
equipped with the appropriate mix of
skills and capabilities, as well as an
executive team that can effectively
implement and deliver our strategy.
In June 2024, we welcomed a new
proprietary director, Bruno Matheu. He
was appointed at the proposal of Qatar
Airways, our largest shareholder. This
appointment was managed by the
Committee during the first half of the
year. As reported to the Annual
Shareholders’ Meeting at the time of the
proposal, his addition to the Board
strengthens the expertise in the aviation
industry, bringing with him extensive
experience in several airline groups in
both executive and non-executive roles.
At the Committee’s proposal, Bruno
Matheu was also appointed to the
Safety, Environment and Corporate
Responsibility Committee.
We believe that orderly succession
planning is a fundamental responsibility
of this Committee. To this end, the
Committee is currently engaged in
a number of search processes in order
to effectively plan for succession in the
coming years. At the meeting held in
October 2024, we reviewed the Board
timetable and its skill matrix and
identified the relevant skills and
attributes for future appointments in
line with our strategic objectives and
the needs of the Board and the business.
We also continue to review succession
planning for the leadership teams at the
Group’s operating companies. This year,
the Committee considered and
recommended to the Board the
appointment of Marco Sansavini as Chair
and CEO of Iberia, and the appointment
of Carolina Martinoli as Chair and CEO
of Vueling. Both of them had already
played a crucial role in IAG’s
transformations, and the Committee
and the Board are confident that they
will achieve outstanding results in their
new positions.
We also continued to build our diversity
strategy and framework, which are
guided by the Board of Directors
Selection and Diversity Policy and by
the Equity, Diversity and Inclusion Policy,
dated 2022. In this regard, we are
satisfied that the Board continues to
meet the ethnic diversity and female
representation targets set out in the UK,
European and Spanish Listing Rules.
However, we still have progress to make
to achieve the goal of having 40% of
senior leadership roles occupied by
women by 2025. At the end of 2024,
we had 36% of women in those roles.
We are dedicated to this objective and
to fostering an environment that promotes
inclusion and equal opportunities.
This year, the annual performance
evaluation of the Board and its
Committees was for a second year
internally facilitated, following the
external evaluation conducted in 2022.
The outcome of the evaluation was very
positive, reaffirming our satisfaction with
the effectiveness of the Board and its
Committees in delivering the highest
standards of leadership and oversight
for the Group’s strategy.
Javier Ferrán
Nominations Committee Chair
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
112
Javier Ferrán
Nominations Committee Chair
Committee members
Date appointed
Javier Ferrán (Chair)
8 September 2020
Peggy Bruzelius
16 June 2022
Margaret Ewing
28 January 2021
Heather Ann McSharry
31 December 2020
The Nominations Committee
The composition, competencies and
operating rules of the Nominations
Committee are regulated by article
31 of the Board Regulations and by the
Nominations Committee Regulations as
last amended on 27 February 2025.
A copy of the Board and the Nominations
Committee Regulations can be found
on the Company’s website.
The Nominations Committee has overall
responsibility for leading the process
for appointments to the Board and
for ensuring these appointments bring
the necessary skills, experience, and
competencies to the Board, aligning
its composition to the business’s
strategy and needs. The Committee also
reports to the Board on the proposed
appointment of senior executives of the
Company and IAG appointments to
Group company boards. It oversees
Board and senior management
succession planning and, more generally,
the development of a diverse pipeline
for succession.
The Nominations Committee must
comprise no less than three non-executive
directors appointed by the Board,
who have the dedication, capacity and
experience necessary to carry out its
functions. A majority of the members
must be independent directors who
are EU nationals.
The only change to the composition
of the Nominations Committee in 2024
was the departure of Giles Agutter,
proprietary director, who did not
stand for re-election at the 2024
Shareholders’ Meeting.
The Committee’s responsibilities
The responsibilities of the Nominations
Committee under the Regulations in
force in 2024 can be summarised as
follows:
• Evaluating the mix of competencies,
knowledge, and experience necessary
in the Board‘s membership and
reviewing the criteria for the Board’s
composition and the selection
of candidates.
• Submitting recommendations for the
appointment of directors to the Board
for approval, and reporting on the
proposed designations of the
members of the Board committees
and their Chairs.
• Succession planning for Board
members including making proposals
to the Board that ensure that such
succession occurs in a planned and
orderly manner.
• Reporting to the Board on the
appointment and removal of senior
executives (which includes all of
the IAG Management Committee).
• Ensuring that non-executive directors
receive appropriate induction
programmes.
• Setting diversity targets (gender,
ethnicity and other criteria) both
within the senior management.
population and the succession pipeline
• Ensuring that plans are in place
for orderly succession of senior
management positions while
safeguarding the achievement
of agreed diversity targets.
• Establishing a target for female and
minority ethnicity representation
on the Board that is in line with the
Company’s Directors Selection
and Diversity Policy.
• Coordinating the annual evaluation
of the performance of the Board
and its Committees.
The Committee’s activities in 2024
The Committee met six times during
2024, with three scheduled and three
special meetings called to discuss
management changes or appointments
to the Group company boards.
Directors’ attendance at these meetings
can be found in the Corporate
Governance section. The Group CEO
was invited to attend the Committee’s
meetings as and when necessary.
The Committee focused on the following
activities during the year:
• Review of the composition of the Board.
• Review of committees’ membership.
• Board succession planning.
• Review of directors’ independence
• Review of compliance with the
Directors Selection and Diversity Policy.
• Review of diversity and inclusion.
• Management succession plans.
• Format of the annual Board evaluation
process, as well as that of the
Nominations Committee evaluation.
• Changes to Group company boards.
• Review of investor feedback from
the Annual Shareholders’ Meeting.
Board succession
The Committee regularly reviews the
formal succession plan for the Board,
including analysis of non-executive
directors’ length of tenure, skills and
experience, and planning for succession
relating to any areas that could require
strengthening from a skills and
succession perspective.
In October 2024, the Committee
specifically considered Board succession
planning, including the Board
refreshment timetable, the Board skills
matrix and the consideration and
identification of skills and attributes
relevant to future appointments. In
2024, the Committee considered the
appointment of Eva Castillo as Chair of
the Audit and Compliance Committee,
succeeding Margaret Ewing in this role,
as well as the appointment of Bruno
Matheu to the Safety, Environment and
Corporate Responsibility Committee.
The Committee has also initiated a
number of search processes in order
to adequately plan for succession in the
coming years in line with the Board's
succession schedule.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
113
Directors’ independence,
performance and re-election
The Nominations Committee, having
considered the matter carefully, is of the
opinion that all the current non-executive
directors, with the exception of the two
proprietary directors, are independent,
both in line with the definition set out
by the Spanish Companies Act and
with that of the UK Corporate
Governance Code, and are free from
any relationship or circumstances that
could affect, or appear to affect,
their independent judgement.
In May 2024 the Nominations
Committee considered the proposal
for the re-election of directors ahead
of the Annual Shareholders’ Meeting,
except with regard to Giles Agutter, who
did not stand for re-election. Bruno
Matheu was considered by the
Committee to fill this vacancy, at the
proposal of Qatar Airways Group.
In accordance with the Board
Regulations, all proposals for the
appointment or re-election of directors
presented were accompanied by an
explanatory report issued by the Board
of Directors with the support of the
Nominations Committee assessing the
competence, experience, and merits
of each candidate. As part of its
assessment, the Committee also reviews
the time commitment and availability
of each non-executive director.
Following this review, the Committee
was of the opinion that each non-
executive director submitting
themselves for re-election continued
to demonstrate commitment to the role
as a member of the Board and its
committees and that each was making
a valuable contribution to the leadership
of the Company.
Each director is required to advise the
Committee and seek its authorisation
before accepting any external
directorship or other significant
appointment that might affect the time
they are able to devote to the role
as a director of the Company.
Management appointments and
succession planning
During 2024, the Committee considered
and recommended to the Board the
following appointments to the IAG
Management Committee, effective
from the beginning of April 2024:
• Marco Sansavini as Chair and CEO
of Iberia, moving from his role as
CEO of Vueling.
• Carolina Martinoli as Chair and CEO
of Vueling, moving from her role as
IAG Chief People, Corporate Affairs
and Sustainability Officer.
Diversity
The procedure for the appointment
of directors follows the principles
established in the Directors Selection
and Diversity Policy which has as its
objective, the recognition of the
importance of Board diversity in a
broader sense. As recommended by
the Spanish Good Governance Code,
the Nominations Committee reviews
compliance with this policy on an annual
basis. The review for the 2024
reporting period was completed
in January 2025.
When considering director
appointments, the Committee follows
a formal, rigorous and transparent
procedure, designed to capture the
value of diversity in its broadest sense,
including a mix of skills, experience,
professional and industry backgrounds,
age and ethnicity, while ensuring that
any appointment is made on merit.
Diversity considerations also include
ensuring that more than half of the
Board are independent EU nationals
to meet regulatory obligations.
Gender diversity principles are followed
throughout the director appointment
process, while preserving the general
diversity and merit-based appointment
principles established in the policy. The
Board’s policy is to consider candidates
from a wide variety of backgrounds,
without discrimination based on gender,
race, colour, age, social class, beliefs,
religion, sexual orientation, disability
or other factors. When conducting
a search, the Company will only engage
search firms that have signed up to the
latest UK Voluntary Code of Conduct
for Executive Search Firms (or its
international equivalent). Additionally,
the Nominations Committee ensures
that the Board appointment ‘long’
and ‘short’ lists provided in the search
process are inclusive according to
the widest definition of diversity.
Female directors currently represent
45% of the Board, ahead of the target
of at least 40%, and 63% of the
independent non-executive directors
(including the Chairman). In addition
to this, three of the four Board advisory
committees are chaired by women:
the Audit and Compliance, the
Remuneration and the Safety,
Environment and Corporate
Responsibility committees. Lastly, the
Senior Independent Director is a woman.
From an ethnic minority perspective,
the IAG Board has met its target
to have one director from an ethnic
minority group.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Report of the Nominations Committee continued
International Airlines Group | Annual Report and Accounts 2024
114
As at 31 December 2024 the Board met the UK Listing Rules and FTSE Women Leaders Review targets. Our gender identity and
ethnicity data reported in accordance with Listing Rule 9.8.6R(10) is set out below. Disclosure is based on self-identification through
information-gathering process where individuals were provided with the requirements and categories for confirmation of
classification. The information is reported at 31 December 2024 and remains unchanged at the date of this report.
Gender identity
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board1
(CEO, CFO, SID and Chair)
Number in
executive
management 2
Percentage
of executive
management
Men
6
55 %
2
7
70 %
Women
5
45 %
1
3
30 %
Not specified/prefer not to say
–
–
–
–
–
Ethnic background
Number of
Board members
Percentage
of the Board
Number of senior
positions on the Board1
(CEO, CFO, SID and Chair)
Number in
executive
management2
Percentage
of executive
management
White British or other White
(including minority-white groups)
10
91 %
3
10
100 %
Mixed/Multiple ethnic groups
–
–
–
–
–
Asian/Asian British
1
9 %
–
–
–
Black/African/Caribbean/Black British
–
–
–
–
–
Other ethnic group, including Arab
–
–
–
–
–
Not specified/prefer not to say
–
–
–
–
–
1 The IAG Chief Financial and Sustainability Officer, Nicholas Cadbury, does not hold a position on the Board although he attends all Board meetings.
2 Excluding IAG’s CEO who is reported as a Board member.
Diversity and inclusion remained a priority during 2024. IAG’s aim is for both senior leaders and our businesses to reflect the diverse
communities we work in and to create an environment where individuals feel their unique differences are valued. Beyond gender
and ethnicity, the Management Committee is composed of individuals with multiple nationalities (including Spanish, British,
American, dual Brazilian/Argentinian, Irish and Italian). In addition, most of the executives have multi-jurisdictional backgrounds and/
or careers which serve to enhance the value that they bring to the Group, its customers and employees. Further information on
Board diversity is included in the Corporate Governance section.
The Board and the Nominations Committee are committed to improving diversity, including gender diversity, across the Group,
encouraging and supporting management actions in this regard. IAG has a target of 40% of senior leadership roles to be held
by women by 2025. At the end of 2024, IAG had 36% of women in those roles, broadly in line with year end 2023. We remain
committed to achieving our 40% ambition. Further, in 2023, we set a Group-wide ambition for 10% of the Group's UK senior
leadership to be minority ethnic by end 2027, which we shared as part of our response to the UK Parker Review. In 2024, 11%
of our UK senior leaders group self-disclosed as ethnically diverse (compared to 6% in 2023). In line with the Group’s diversity and
inclusion framework and strategy, the Group’s operating companies and platform businesses have implemented a range of initiatives
to support equity, diversity and inclusion.
Further details and explanations of the steps that IAG is taking to promote diversity and inclusion across the Group are set out in the
Sustainability section.
Committee annual evaluation
The annual performance evaluation of the Board and its Committees was for a second year internally facilitated, following the
external evaluation conducted in 2022, and as set out in the Corporate Governance report.
The evaluation concluded that the Committee operated effectively during the year. In 2025, the Committee will continue to prioritise
its focus on Board succession to ensure that there is a planned refreshment of the Board covering the identified areas of expertise
and to oversee the work on management succession planning, in particular considering talent retention and development plans.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
115
Dear shareholder
I am delighted to introduce the Safety,
Environment and Corporate
Responsibility Committee report for the
year ended 31 December 2024. This
report highlights some of the work and
activities carried out by this Committee
during the year.
In 2024, we welcomed Bruno Matheu to
the Committee, replacing Giles Agutter
who retired from the Board at the 2024
Annual Shareholders’ Meeting. I would
like to thank Giles for his contribution
as a member of this Committee.
During 2024, the Committee continued
to assist the Board in a dual role. Firstly,
it provided high-level oversight of the
Group's safety activities and resources,
while promoting the sharing of
knowledge and best practice across
the Group. Secondly, it provided
guidance and direction on IAG's
sustainability programmes and
corporate responsibility ambitions,
ensuring alignment with the Group's
sustainability strategic priorities and
supporting the Board in its oversight
of this important area.
The Board approved the review of its
regulations and those of its advisory
committees on 27 February 2025 and
agreed that this Committee will
henceforth focus on environmental
and corporate responsibility matters
(renamed the Environmental and
Corporate Responsibility Committee).
The Board also agreed that the
oversight of the safety risk management
framework of the Group's various
airlines, together with the overall
oversight of the Group's enterprise
risk management framework, will be
the responsibility of the Audit and
Compliance Committee. The new
responsibilities of both Committees are
detailed in the respective Committee
Regulations which are available on the
Company’s website.
In the area of safety, the Group's airline
safety managers revised their reporting
framework to the Committee in 2024
in order to homogenise and simplify
the issues reported and to improve
comparability and sharing of best
practice across the Group.
In addition to the standard review
of the Group's airline safety reports,
the Committee considered other special
matters in 2024, including relevant
international safety incidents, airline
safety policies on drug and alcohol
testing, and the operational risk
of 5G telecommunications networks
at US airports.
In terms of sustainability, good progress
was made in 2024. On carbon emissions
reduction, IAG performed strongly
in 2024, improving its annual carbon
intensity by 3% to 78.1gCO2/pkm,
ahead of its 2025 target of 80gCO2/
pkm. The Group's airlines used more
than 162,000 tonnes of SAF,
representing a 203% increase on the
2023 volume. This usage represented a
reduction in IAG's net emissions of more
than 469,000 tonnes of CO2, alongside
ongoing operational and in-flight
efficiency efforts which contributed a
further reduction of 114,000 tonnes of
CO2. Please refer to the Sustainability
statement for more information.
The Committee was kept informed of
the various regulatory initiatives relevant
to this field. In particular, the Committee
focused on alignment with the new EU
Corporate Sustainability Reporting
Directive (CSRD), which becomes
effective for reporting from 2025 after
transposition into national law, which is
relevance of this new directive, a specific
training session was provided to the full
Board in July by a strategic consultancy
specialising in sustainability and impact.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Report of the Safety,
Environment and
Corporate Responsibility
Committee
International Airlines Group | Annual Report and Accounts 2024
116
Nicola Shaw
Safety, Environment and Corporate
Responsibility Committee Chair
Committee members
Date appointed
Nicola Shaw (Chair)
25 February 2021
Maurice Lam
17 June 2021
Bruno Matheu
26 June 2024
Robin Phillips
25 February 2021
Emilio Saracho
25 February 2021
In order to prepare for compliance with
the CSRD, management's proposal
regarding the double materiality impact
assessment and the timetable for the
preparation of the first CSRD compliant
sustainability report was reviewed by
this Committee at a special joint
meeting with the Audit and Compliance
Committee in October.
Also at the May meeting, the Committee
was briefed on policy developments
relating to SAF. In particular, the Committee
considered the SAF mandate published
by the UK Government on 25 April 2024,
which came into force on 1 January 2025,
and the UK Government's consultation on
a proposed revenue certainty mechanism
to support investment in SAF production
in the UK. Both are regulatory measures
that we welcome and support in order to
scale the supply and use of SAF at a fair
cost for airlines.
I would like to highlight in this letter the
meeting we had on gender pay and pilot
diversity, which included representatives
from the people and operations functions
of the Group's main airlines. We had
the opportunity to discuss the challenges
facing the industry in terms of female
representation and the actions our
airlines are taking to increase the
diversity of their pilot populations.
On social matters, the Committee dealt
with two other important issues in 2024.
Firstly, at our December meeting, we
reviewed the Group's compliance with
social practices and policies and our
progress against key metrics, including
an insightful discussion on the Group's
social impact. Secondly, the Committee
reviewed and submitted to the Board
for approval a new Group Third Party
Code of Conduct (replacing the former
Supplier Code of Conduct), which
extends IAG's shared values to our value
chain, and a new Human Rights Policy,
which underlines our commitment to
respect and promote human rights
throughout our operations and value
chain. The Human Rights Policy is aligned
with international standards and covers
key principles such as diversity, equal
opportunities, labour standards, freedom
of association, forced and child labour,
modern slavery and human trafficking.
I would like to thank my colleagues on
the Committee for their work and
commitment this year and look forward
to continuing to chair this Committee in
its new focus as the Environmental and
Corporate Responsibility Committee.
Nicola Shaw
Safety, Environment and Corporate
Responsibility Committee Chair
The Safety, Environment
and Corporate Responsibility
(SECR) Committee
The Committee’s composition,
responsibilities and operating rules
are set out in article 33 of the Board
Regulations as well as by the
Regulations of this Committee, which
were last reviewed on 27 February
2025 and are available on the
Company's website. At the Board
meeting held on 27 February 2025,
the responsibilities and operating
rules of the Board committees were
reviewed, and it was agreed that
the SECR Committee would continue
as the Environmental and Corporate
Responsibility (ECR) Committee,
concentrating its work in these
two areas.
During 2024, the Committee operated
under the Regulations approved by
the Board in 2021, which are the ones
referred to in this report.
The Committee shall be made up of
no less than three directors appointed
by the Board, with the necessary
dedication, capacity and experience.
All the members of the Committee
are non-executive directors with the
majority being independent directors.
In addition to the Board Secretary and
Deputy Secretary, regular attendees
at Committee meetings included the
Chairman, the Group Chief Executive
and the Chief People, Corporate
Affairs and Sustainability Officer.
Senior managers with responsibility
for safety matters and others in
charge of different sustainability areas
were invited to attend specific agenda
items as required and when relevant.
The Committee’s role
and responsibilities
The Committee’s role is to assist
and advise the Board on matters
relating to safety, environment and
corporate responsibility. Through the
Committee, IAG has an overall view
of the safety performance of each
airline and of any major issues that
may affect the industry, but
responsibility for safety matters rests
with the Group's airlines as holders of
the Airline Operating Licence (AOC).
In the areas of environment and
corporate responsibility, the SECR
Committee provides a governance
forum for the non-executive directors
to exercise specific oversight,
challenge and support senior
management in the development of
the Group's sustainability strategy,
policies and targets, supporting IAG's
vision to be a world-leading airline
group in sustainability.
Under the Regulations in force in 2024,
the Committee’s remit included:
• To exercise a high-level overview
of safety activities and resources.
• To receive significant safety
information about IAG’s
subsidiaries, franchise, codeshare
or wet-lease providers used by
any member of the Group.
• To review the Group’s strategy
and policies on social and
environmental sustainability.
• To evaluate that the Company’s
environment and social practices
are in accordance with the
established strategy and policies.
• To review the Group’s global
environment and climate risk
mitigation strategy, the
implementation of sustainability
programmes and any climate-
related financial disclosure.
• To review the content of the non-
financial information statement
or any such sustainability report
the Company may produce from
time to time.
• To monitor and evaluate the
Company’s interaction with its
stakeholder groups, including
the workforce.
• Periodically review the principal
environmental, social and
reputational risks to monitor that
they are adequately identified,
managed and disclosed.
• To review the general diversity
and inclusion policies.
• Receive information regarding
the inclusion of the Group in
sustainability indexes.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
117
The Committee’s activities during
the year
During 2024, the Committee held four
meetings. Directors’ attendance at these
meetings is detailed in the Corporate
Governance report.
The Committee’s activities during
the year included:
• 2023 non-financial information
statement and other
sustainability reporting;
• Significant safety and security
issues report;
• Group airlines safety and
security reviews;
• Review of policies regarding drugs
and alcohol testing;
• Update on the Alaska Airlines/
Boeing incident;
• Sustainability trends update and
benchmark, including overview
of SAF projects:
• Regulatory update focusing
on SAF policy;
• Stakeholder engagement review;
• 2023 update to the Modern slavery
and human trafficking statement;
• Review of gender pay and pilot
diversity;
• Update on turbulence incidents;
• Update on 5G operation risk
in USA airports;
• Comparison of deferred items
across the Group’s airlines; and
• Safety governance review,
including the role of the board
of directors’ committees.
Safety
Key topics discussed for each airline
under their regular safety review include
information on safety risk management,
safety culture, operational risks,
occupational injury risks, as well as
reported data on aircraft damage.
This year, the safety managers of each
of the Group's airlines revised their
reporting framework to this Committee,
in order to homogenise and simplify the
issues reported by the different airlines
and to enhance comparability and
sharing of best practices within the
Group. In addition to this, the Committee
considered some specific topics,
including an update on the Alaska
Airlines/Boeing incident, a review on
drugs and alcohol testing and an update
on 5G operation risk in USA airports.
Market trends and EU and national
ESG consultations
In 2024, the Committee was regularly
informed of any forthcoming ESG policy
initiatives, updates and consultations
at international, EU or national level,
including the Group's position and
intended actions in relation to each.
Benchmarking
At its meeting in May, the Committee
considered an update on a
benchmarking study of all ESG
factors carried out by an international
sustainability and technology
consultancy. The report provided an
overview of IAG's position relative to
the industry across a range of
sustainability factors and provided a
good roadmap for future management
and Committee focus.
Gender pay and pilot
diversity session
The Committee reviewed the context,
the Group's ambitions and planned
actions regarding the recruitment
of female pilots in the Group's various
airlines, hearing directly from
representatives of the Group's main
airlines. The meeting addressed the
Group's position on gender pay and the
diversity of the Group's pilot population.
Particular emphasis was placed on
initiatives to increase the number of
female pilots, including sponsored cadet
programmes and the review of
recruitment processes. Aer Lingus is one
of the world's top three airlines for pilot
gender diversity, with IAG above the
global industry average. However, it was
highlighted that while the proportion of
female pilots has increased by 45% over
the last six years, significant challenges
remain for the industry to improve
diversity, with IAG airlines playing a
leading role.
Stakeholder engagement review
The Committee reviewed the annual
report on stakeholder engagement
on sustainability issues, which included
industry associations, government
and regulators, customers, investors,
employees and suppliers, and
considered the main objectives of this
dialogue and its impact. Further details
can be found in the Stakeholder
engagement section.
Modern slavery review
The Committee reviewed the update
to the Group’s Modern slavery and
human trafficking statement for its
submission to the Board of Directors.
CSRD
IAG is expected to comply with the
EU Corporate Sustainability Reporting
Directive (CSRD) (Directive 2022/2464/
EU). The CSRD is currently being
transposed into national law by EU
Member States. IAG's 2024
'Sustainability statement' complies
with Spanish Law 11/2018 and has
been prepared under the transitional
requirements set out in the joint
communication of the CNMV and the
Spanish Instituto de Contabilidad y
Auditoría de Cuentas (ICAC), published
on 27 November 2024. The CSRD was
adopted with the aim of improving
sustainability reporting and its
comparability across the European
Union. In July, the Board of Directors
received special training on the
importance and implications of this
new directive, provided by a consultancy
firm specialising in sustainability.
The CSRD requires the adoption of
a double materiality approach, which
assesses both the impact of companies
on the environment and people, and the
financial impact of that impact on the
company's business. To this end, the
Committee held a special joint meeting
with the Audit and Compliance
Committee in October 2024 to review
the results of the double materiality
impact assessment carried out by
management in preparing the first
sustainability report under the CSRD,
which was subsequently presented
to the Board. These conclusions were
revisited during the review of the draft
Sustainability statement in order to
assess the various topics included
and the disclosure provided
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Report of the Safety, Environment and Corporate Responsibility Committee continued
International Airlines Group | Annual Report and Accounts 2024
118
Sustainability risks
As in previous years, the Committee
reviewed the Group sustainability risk
assessments for the business plan period
2025 to 2027 and to 2030, which helped
the Committee understand the physical,
policy, market and technology risks that
the Group has considered could impact
its sustainability ambitions. Further
information regarding risks is set out
in the Risk section.
Review of compliance and progress
against key metrics
The Committee completed its
annual review of compliance with
environmental and social practices
and policies and progress against key
indicators. In 2024, the Committee held
a special meeting to review the Group's
social impact strategy, with a particular
focus on Iberia's approach and activities.
Sustainability (ESG) ratings review
As in previous years, the Committee was
also informed of the Group's positioning
in relation to the main sustainability
rating indexes.
Third Party Code of Conduct and
Human Rights policy
The Committee reviewed and endorsed
the Board's approval of a new Group
Third Party Code of Conduct, which
updates and replaces the former Group
Supplier Code of Conduct, and a new
Human Rights Policy, which are two
important elements of the Group's social
responsibility framework.
Committee annual evaluation and
priorities for 2025
The annual performance evaluation
of the Committee was again internally
facilitated, following the external
review completed in 2022. The feedback
received was very positive and
supportive of the Committee's work.
However, following an analysis of the
Group's overall governance of safety
matters, and in particular the oversight
already exercised by the management
and board structures of each of the
Group's airlines, the Board considered
that it would be more appropriate for
the Audit and Compliance Committee
to provide overall oversight of the
enterprise risk management and safety
risk management frameworks, and to
further enhance the sharing of
experience and best practice across
the Group's airlines through a committee
that includes the Group's airline
safety directors.
In relation to its environmental and
corporate responsibility remit, the
Committee agreed to review its plan
of activities for 2025 and agreed on
proposed areas of interest for further
training and support.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
119
Report of the Audit and
Compliance Committee
Dear shareholder
I am pleased to present my first report
as Chair of the Audit and Compliance
Committee. I would like to thank
Margaret Ewing for her service as Chair
during these last four years and for
her continued support as part of
this Committee.
The Audit and Compliance Committee
continues to play a key role in IAG’s
governance, overseeing risk
management, internal controls, financial
and non-financial reporting, compliance
and internal and external audit.
This report highlights the key matters
considered in 2024 and how the
Committee fulfilled its responsibilities
to ensure the integrity and reporting
compliance of the 2024 Annual Report
and Accounts.
The Committee held six scheduled
meetings and one special meeting to
consider the new Group Ethics and
Compliance Charter and plans, and to
review the update to the IAG ‘Speak Up’
policy. Key discussion points and focus
areas are detailed in this report.
Throughout the year, Margaret and,
since 1 August, I have engaged with all
Committee members, management
and the internal and external auditors.
The Committee's Regulations were
updated on 27 February 2025 to bring
them into line with the updated
Technical Guidance on Audit
Committees approved by the Spanish
CNMV. In addition, the Board agreed
that the Audit and Compliance
Committee will retain overall oversight
of the Group’s risk management
frameworks, including the safety risk
management of each of the Group’s
airlines, and the Group’s enterprise
risk management.
The Committee works to ensure
reliable financial reporting, non-financial
reporting and compliance with laws
and regulations, through oversight of
the Group’s internal control framework,
including its mature Internal Control
over Financial Reporting (ICFR) and risk
management frameworks.
During the year, the Committee closely
monitored management’s proposed
implementation of the revised UK
Corporate Governance Code, the UK
Economic Crime and Corporate
Transparency Act 2023 and the
Corporate Sustainability Reporting
Directive (CSRD) (directive 2022/2464/
EU). The Committee also maintained its
focus on IT and cybercrime, with regular
updates on the implementation of the
Group’s new IT operating model and
progress in key IT projects and IT
transformation programmes.
An internally facilitated evaluation
of the Committee’s effectiveness was
completed in 2024, following an external
evaluation in 2022. The findings, shared
with the Board, confirmed that the
Committee operated effectively during
the year. As a priority for 2025, the
Committee will continue to focus on the
monitoring and execution of
management’s compliance programme,
supported by Internal Audit.
I hope that you find this report
informative and that it provides
assurance in relation to the activities
of the Committee during 2024 and
planned for 2025.
Eva Castillo
Audit and Compliance Committee Chair
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
120
Eva Castillo
Audit and Compliance Committee Chair
Committee members
Date appointed
Eva Castillo (Chair since 1 August 2024)
31 December 2020
Margaret Ewing
20 June 2019
Peggy Bruzelius
31 December 2020
Maurice Lam
17 June 2021
The Audit and Compliance
Committee
The composition, competencies and
operating remit of the Audit and
Compliance Committee are regulated
by article 29 of the Board Regulations
as well as the Regulations of the Audit
and Compliance Committee. Following
the publication of the updated UK
Corporate Governance Code and
related guidance in 2024, as well
as the publication of the updated
Technical Guidance on Audit
Committees by the CNMV, the
Board reviewed and updated the
Committee’s regulations in
February 2025. A copy of these
Regulations can be found on IAG’s
website.
The Committee’s composition,
competencies and attendance
Detailed biographies of all Committee
members are included in this Annual
Report. The Board is satisfied that the
Committee has retained competence
relevant to its overall responsibilities,
including possessing a wide range of
financial, audit, risk management and
relevant sector and business
experience among its members,
providing the right mix of skills and
experience to provide constructive
challenge and support to
management. The Board has
determined that Margaret Ewing
and Maurice Lam have recent and
relevant financial experience.
The Board, through the Nominations
Committee, will continue to review
the Committee’s membership to
ensure the skills and experience of
its members align with the business
as it develops.
In addition to the Secretary, the
Deputy Secretary and the Head
of Group Internal Audit (who
functionally reports to the
Committee Chair), the Chairman,
the Group CEO, the Chief Financial
and Sustainability Officer, the Group
General Counsel, the Group Financial
Controller and representatives of the
external auditors regularly attended
the Committee meetings. In relation
to the recommendation of the CNMV
Technical Guide to limit the presence
of non-members at committee
meetings, the following measures are
followed:
• Draft agendas are reviewed to
ensure the participation of
appropriate stakeholders for
each agenda item.
• A private session of the Committee
is held at the end of each meeting.
• Regular private sessions are held
with the internal and external
auditors, the Chief Financial and
Sustainability Officer and the
Group General Counsel.
• Where appropriate, management
or the auditors are asked to leave
the meeting if a topic is to be
discussed that may conflict with or
involve them.
The Committee’s responsibilities
and activities
The Committee’s principal
responsibilities are to oversee and
provide assurance to the Board on
the integrity and quality of all
external reporting, effectiveness of
audit arrangements and robustness
and effective operation of internal
controls, compliance and risk
management processes and fraud
prevention and detection. The
Committee meeting agendas are
tailored to ensure emerging topics
are included and to allow for ad hoc
discussion and reviews. A summary
of the Committee’s activities during
2024 and until the date of this report
is overleaf.
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Audit and Compliance Committee activities
Financial reporting
• Reviewing, challenging and considering the external auditor’s views on significant accounting
estimates, judgements and accounting policies applied in the financial statements of the Group
and related reporting and disclosures;
• Reviewing the financial statements and announcements of the Group to ensure integrity; and
• Consideration of the process for confirming and recommending to the Board that the 2024 Annual
Report and Accounts is fair, balanced and understandable.
External auditor
• Oversight of the external auditor, focusing on audit quality, effectiveness, independence and
objectivity to ensure the rigour and challenge of the audit process is maintained. Specific activities
undertaken by the Committee to oversee the relationship with KPMG and the audit process
are included in this report.
Internal auditor
• Oversight of the internal auditor, focusing on the appropriateness of internal audit skills and
resourcing, approving the audit plan, reviewing audit results, monitoring implementation of audit
recommendations and ensuring the independence of the Internal Audit Team. Specific activities
undertaken by the Committee with regard to internal audit are included in this report.
Internal Control over
Financial Reporting (ICFR)
• Consideration of and challenge to management’s analysis of risks in financial reporting,
identification of key financial controls and documentation of accounting processes;
• Monitoring the internal controls procedures adopted by the Company, to oversee compliance
with them; and
• Reviewing the results of the internal audits of ICFR consideration of the external auditor’s findings
and conclusions on this matter and tracking the progress of implementation of internal and
external ICFR audit recommendations.
Enterprise risk management
(ERM)
• Reviewing the principal and emerging risks facing the Group, including gaining assurance as
to the effectiveness of the internal control system, mitigations and risk management process;
• Reviewing the principal risks and the combination of risks that possess the potential to significantly
impact the Group’s strategic objectives, in order to simplify and further refine the Group’s
risk disclosures;
• Reviewing the process whereby the Board reviewed and determined risk appetite;
• Reviewing the performance of the Group against its existing risk appetite and confirming management’s
assessment that the Group has applied appropriate mitigations or other effective controls to
ensure that the Group has operated within (or agreed) risk appetite throughout the period;
• Reviewing annual compliance with the ERM risk policy;
• Reviewing the Group’s fraud risk assessment and design of the internal control framework
to prevent and detect fraud, including consideration of the key controls and assurance activities
provided across the Group in relation to financial and non-financial fraud risk;
• Overseeing treasury risk management, including reviewing the Group’s fuel and foreign exchange
hedging policies, positions and financial counterparty exposure, compliance with the Group’s
treasury and financial risk management policies and consideration of the implications of the
approved fuel hedging profile, given the recovery in demand and significant volatility in fuel prices,
and ensuring its continued appropriateness in managing these risks; and
• Overseeing tax risk management, in an environment of increased challenge, investigation and
audit by tax authorities across the globe, and considering the tax strategy before recommending
it to the Board for approval and publishing it on the IAG website.
Legal and compliance
• Reviewing the Group’s anti-bribery, sanctions, competition, privacy and Spanish Criminal Code
compliance programmes including the latest related risk heat maps, regulatory developments,
issues identified during the year or still live from previous years and key programme activities
during 2024 and priorities for 2025;
• Reviewing, on behalf of the Board, the Group’s independent third-party-facilitated whistleblowing
procedures and the annual report from the Group’s Head of Ethics and Compliance on:
communication and awareness (plus trust in) the Group’s whistleblowing facilities; incidents
reported via the external whistleblowing and relevant internal channels, by category and nature;
any emerging themes or trends; timeliness and responsibility for follow-up; and investigations
and actions taken to address substantiated reports; and
• Consideration of Disclosure Committee and litigation reports from the General Counsel
including the status of remaining and potential civil litigation actions (see note 28 to the
financial statements).
Area of Committee focus
Activities
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IT, cybercrime and GDPR
• Reviewing and monitoring key cybersecurity and data privacy management improvement projects
including changes to the Group’s cyber governance model and IT operating model, lessons learned
from recent third-party supplier data breaches, third-party risk management review (TPRM) and
subsequent enhancement of approach to TPRM, visibility of trend analysis and benchmarking
external data to better understand the Group’s progress in implementing its improvement plans;
• In May, the Committee received a briefing on AI risk management and governance from an external
expert to prepare for its oversight of the Group’s AI approach.
Non-financial information
• Reviewing management’s preparations to comply with the Corporate Sustainability Reporting
Directive (CSRD) (directive 2022/2464/EU) as well as the integrity of information provided in
the Group’s Consolidated Sustainability statement in compliance with Law 11/2018, including
information on environmental, social, employee and human rights-related matters. In addition,
the Committee received the external auditor’s limited assurance report and conclusions on the
Sustainability statement;
• Reviewing the integrity of the reporting and data in respect of the Group’s longer-term
sustainability and climate-related risks and opportunities, including the Group’s alignment with
the provisions of the TCFD process, and the appropriate reflection of the implications of climate
change in the Group’s strategy, financial statements and financial and cash flow forecasts; and
• Understanding the phased programme towards readiness for reasonable assurance for non-
financial information in respect of key and required sustainability and people/workforce measures
and monitoring the significant progress achieved, leveraging the Group’s established methodology
for implementing internal controls frameworks and defining the controls, accountability and
governance essential to achieve effective reasonable assurance.
Insurance
• Reviewing the Group’s insurance position, including general insurance arrangements and directors’
and officers’ liability insurance;
• Reviewing the adequacy and appropriateness of the cover with regards to the Group’s relevant
principal and emerging risks (recognising that not all risks are of an insurable nature);
• Consideration of the insurance policies across the Group to ensure they are adequate and
appropriate for the risks faced by the Group and new areas of risk and insurance.
Governance and other
matters
• Reviewing and recommending to the Board the adoption of amendments to relevant policies; and
• Considering and planning for the implications of any changes in European, Spanish or UK corporate
governance requirements within the remit of the Committee, including the passing of the UK
Economic Crime and Corporate Transparency Act 2023 and the release of associated guidance.
Area of Committee focus
Activities
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Significant financial reporting
matters considered by the Audit
and Compliance Committee
The Committee takes account of
significant issues and risks, including
strategic, business, operating, financial,
compliance and regulatory, that may
materially impact the integrity and
accuracy of the quarterly financial
results announcements or the 2024
Annual Report and Accounts.
In support of the directors' statement
and responsibilities, the Committee has
also sought to ensure that the Group’s
reporting is aligned with the latest
guidance and requirements from
regulators, that it is fair, balanced and
understandable and that all matters
disclosed and reported upon meet the
rapidly evolving needs of the Group’s
stakeholders.
The significant accounting judgements,
estimates, accounting policies and issues
considered by the Committee in relation
to the Annual Report and Accounts
for the year to 31 December 2024
(including those considered as significant
audit issues by the external auditor and
described in the Independent Auditor’s
Report) are set out in the table below.
After robust further consideration,
challenge and debate, there are no topics
where the conclusion resulted in significant
disagreement between management,
the external auditor and the Committee,
and there were no unresolved issues that
needed to be referred to the Board.
VAT assessment on
the issuance of
Avios
The Committee received multiple updates throughout 2023 and 2024 on the progress of HMRC’s substantive
review into whether VAT should have been and should be payable on the issuance of Avios, including the
consideration of the impacts of the decision letter issued by HMRC on 29 October 2024.
Based on the facts presented, the Committee agrees with management’s assertion, confirmed by external
counsel and tax advisers, that it is more likely than not that an adverse ruling will not eventuate. As a result,
the Committee also agrees with management’s approach in the 2024 consolidated financial statements in
that the matter is disclosed as a contingent liability and no provision is recorded for this exposure.
The Committee is satisfied that the disclosure made in the 2024 Annual Report and Accounts enables users
to sufficiently understand the status of this matter. The Committee also considered the conclusions of the
external auditor, who had identified the VAT matter in IAG Loyalty as a key audit matter.
Loyalty revenue
recognition
The Committee focused on IAG Loyalty’s breakage and other assumptions driving loyalty revenue recognition.
The Committee is satisfied that the estimates relating to loyalty revenue recognition are appropriately supported by
reasonable management assumptions and those of an independent expert third party. The Committee also considered
the conclusions of the external auditor, who had identified loyalty revenue recognition as a key audit matter.
Voucher revenue
recognition
The Committee continued to focus on management’s assumptions in relation to revenue recognition relating
to vouchers issued in relation to conditions during and immediately after the COVID-19 pandemic, including
issuances, redemptions, refunds and the amounts recognised as breakage.
The Committee is satisfied that the breakage assumptions applied in relation to the revenue recognition of
vouchers are appropriately supported by reasonable management assumptions, which themselves are
supported by historical redemption and expiry data.
Matter
Action taken by the Committee and outcome/future actions
Other significant matters considered
Highlights of other key matters that the Committee considered are explained below.
Viability and going
concern
assessments
Throughout the year and while finalising the 2024 Annual Report and Accounts, the Committee reviewed and
evaluated management’s going concern review and viability assessment, including the supporting analysis.
The Committee found assurance in management’s 2024 assessment and update of its three-year forecasts as part
of the financial plan through to 31 December 2027. This assurance was gained by reviewing and challenging critical
estimation assumptions and judgements applied to cash flow forecasts over the short, medium and long term,
including the implications of climate change within the reference period. Many assumptions and judgements are
based on external factors such as political and economic influences, ongoing conflicts and geopolitical tensions,
which drive market uncertainty and the prolonged impacts of supply chain disruption.
The Viability Statement section of this Annual Report provides details of the base case and downside case used
in assessing the appropriateness of the Board’s Viability Statement and the going concern basis of accounting.
The Committee critically reviewed the assumptions applied in management’s base case and downside case
projections, ensuring the downside case included appropriately severe but plausible assumptions. The Committee
also examined the external auditor’s findings and conclusions on this matter. Alternative negative scenarios were
considered by the Committee, but the downside case presented the most severe yet plausible scenario.
The Committee recommended the going concern statement and related disclosures to the Board for inclusion in
the 2024 half-year interim results announcement and the 2024 Annual Report and Accounts, as well as the Viability
Statement for inclusion in the 2024 Annual Report and Accounts.
Matter
Action taken by the Committee and outcome/future actions
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Fraud procedures
The Committee examined management’s report on the Group’s fraud prevention framework, which
included the annual fraud risk assessment, the key controls and the lines of defence established to prevent
and detect fraud. The Committee observed strong alignment between the risk assessment and the assurance
map, including lines of defence, and was satisfied that the approved internal audit plan addressed the key
financial reporting anti-fraud controls as well as audits targeted at specific fraud risks across the Group during
this period.
Management updated the Committee following the November 2024 release of the implementation
guidance for the UK Economic Crime and Corporate Transparency Act 2023. The Committee will oversee
management’s response to the guidance, particularly regarding reasonable procedures to prevent fraud
and any necessary enhancements to the Group’s fraud prevention framework.
On behalf of the Board, the Committee will continue to monitor fraud and internal controls, including
consideration of feedback from the external auditor, the outcomes of the annual ICFR audits and the results
of a series of focused anti-fraud control internal audits.
CNMV letters and
enquiries
During the course of 2023, the Company received a number of enquiries from the CNMV, requesting
information and clarifications relating to the Company’s accounting policies for major maintenance events
for both owned and leased aircraft. In forming its responses, management incorporated: (i) detailed analysis
of its current accounting policies; (ii) benchmarking of peer accounting policies; (iii) consideration of industry
guidance; and (iv) consideration of alternative accounting policies. The Committee reviewed and concurred
with management’s responses to the aforementioned enquiries.
During the course of 2024 and through to the date of this report, the Company has received no further
correspondence from the CNMV in relation to this, or any other matter.
Corporate
governance and
audit reform
Throughout 2024, the Committee closely monitored developments in and emerging guidance in respect
of the UK’s Revised Corporate Governance Code and the UK Economic Crime and Corporate Transparency
Act 2023. In May, the Committee challenged management’s initial approach to the implementation of
provision 29 of the revised code. Management agreed to monitor emerging industry practice throughout
2024 and 2025 to further improve and refine the approach.
The Committee believes management is well placed to adopt the new provisions as a result of the existing
control frameworks implemented across the Group. Throughout 2025, the Committee will be reviewing
management’s implementation of the provisions to ensure full compliance and appropriate assurance
provision for the Board in accordance with the relevant regulatory and legal timetable.
Sustainability
statement and
CSRD
The Committee is pleased with management’s progress in preparing for the disclosure of material data points
required under the Corporate Sustainability Reporting Directive (CSRD) (directive 2022/2464/EU) as well as
the continued progress on designing and documenting internal controls over non-financial reporting (ICNFR)
across the Group to ensure there are robust processes and controls in place to obtain reliable data.
In June, the IAG Board received training on the CSRD and double materiality assessment from an external
expert to prepare for its responsibilities in approving the Group’s double materiality assessment.
The Committee held a joint session with the Safety, Environment and Corporate Responsibility (SECR)
Committee in October, to jointly review and challenge management’s approach and conclusions regarding
the CSRD double materiality assessment. In addition, both Committees reviewed the draft Sustainability
statement in advance of the year end.
At the request of the Committee, additional non-financial information process and control internal audits
were undertaken in 2024 to inform management’s drive to improve the ICNFR framework and to provide
the Committee with assurance that the newly-implemented controls are operating effectively. In 2025
the Committee will, jointly with management, determine the appropriate level of ongoing assurance required
over the ICNFR framework.
Compliance
The Committee recognises the critical role of compliance in upholding the highest ethical standards across
the Group. Throughout 2024, the Committee has closely monitored management’s plans to address the
recommendations of the independent assessment of the Group’s ‘Speak Up’ programme and ethics and
compliance maturity assessment completed in December 2023. This has included the review and challenge
of the Group’s three-year compliance plan, receiving regular updates on the implementation of the first year
of the plan as well as the review and approval of the IAG Ethics and Compliance Charter and the revised
IAG ‘Speak Up’ policy.
The Committee is pleased with the progress made and compliance will remain a key area of focus for the
Committee during 2025 and 2026.
Matter
Action taken by the Committee and outcome/future actions
The Committee will continue to receive regular updates on all the above matters in 2025.
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Internal Control over
Financial Reporting
The Board of Directors is ultimately
responsible for the supervision of the
existence and effectiveness of Internal
Control over Financial Reporting (ICFR).
The Board has delegated responsibility
for the development of effective
controls to the Group Chief Executive
Officer and supervision of the
effectiveness of these controls to
the Audit and Compliance Committee.
The Group’s ICFR monitoring and
auditing is mature and well embedded
across the Group, covering processes
applied by the Company, Aer Lingus,
British Airways, IAG GBS, IAG Loyalty,
Iberia and Vueling, and processes
performed by IAG GBS and IAG Cargo
on behalf of the operating companies.
This enables the Committee to evaluate
and oversee IAG’s management of
financial reporting risk and to validate
the Group’s approach to complying with
the CNMV’s ICFR recommendations.
In 2024, the Committee reviewed the
results of the internal audits and external
audit of ICFR (which included IT general
controls). No unremediated material
weaknesses that would impact the
integrity of the financial statements
were identified, and management
continued to improve the control
environment across the Group. The
Committee also tracked the progress of
internal audit recommendations to
address any weaknesses identified.
Internal audit
The Committee’s activities during
2024 in relation to the Internal Audit
function included:
• Reviewing and agreeing the internal
audit 2024 plan and 2025 first six
months’ plan (including resourcing
and budget to appoint appropriate
external specialist resource to provide
the required level of assurance over
the principal risks, processes and
controls throughout the Group). This
included ensuring the 2024 plan
continued to focus on fraud risk while
also ensuring coverage of ‘other’
specific risks, including cybersecurity,
IT transformation programmes, non-
financial information and satisfying
ICFR and Spanish Criminal Code
requirements;
• Reviewing key audit conclusions,
discussing the quality and timeliness
of management’s responses,
monitoring the resolution of issues
raised and requesting additional audit
review of certain weaknesses or
concerns identified by internal audit,
post-management action to
remediate. Where an internal audit
finding was rated seriously deficient,
relevant responsible management
were requested to, in person, present
their plans and progress in addressing
the audit recommendations and
required actions, reflecting the
importance the Committee attributes
to the internal audits and their
conclusions;
• Holding regular meetings during the
year between the Committee, the
Head of Group Audit and the external
audit partners, as well as ensuring the
Head of Group Audit feels able to
raise any concerns informally and
directly with the Chair of the
Committee;
• Monitoring and protecting Internal
Audit’s independence and standing
within the Group, ensuring it is able
to influence and engage at the most
senior levels across IAG, operating
companies and functions, and is
closely involved in the Group’s
discussions on risk; and
• Performing an effectiveness
review with key stakeholders in
December 2024.
The Committee is satisfied that delivery
of the approved internal audit strategy
and plan is providing timely and
appropriate assurance on the
effectiveness of controls in place to
successfully and effectively manage
aspects of the Group’s relevant principal
risks (i.e. those that are capable of being
subject to an audit review).
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External audit
External auditor key information
Last tender
2019 – January 2020
Transition year
2020
AGM approval of current auditor (for one year to 31 December)
June 2024
First audited Annual Report
Year to 31 December 2021
Next audit tender required by regulations
For appointment effective for year to 31 December 2031
The Committee engaged throughout
the year with KPMG, with the
engagement partners attending
all Committee meetings.
The Committee Chair met frequently
with the Group and lead audit partners
throughout the year to review Group
developments, audit progress, planned
reporting and audit findings. The
Committee’s key activities in relation
to its interaction with KPMG included:
• Review and approval of the 2024
external audit plan and strategy
including consideration of scope,
approach and methodology, emerging
industry and Group-specific audit risks
and materiality;
• Monitoring the audit plan’s
implementation, including receiving
regular reports from KPMG, progress
against plan in light of key
judgements, audit matters and any
significant weaknesses detected in
the internal control environment;
• Discussion, prior to recommendation
of the financial statements to the
Board for approval, of the audit
findings, including audit variances,
and observations on internal controls,
operations and resources. This included
challenging the auditors on their
conclusions regarding management’s
disclosure of the ongoing VAT
assessment on the issuance of Avios
discussed in the significant financial
reporting matters section above;
• Performing an assessment of the
effectiveness and independence of
KPMG, including the quality of the
2024 audit (throughout the year)
and reviewing and approving KPMG’s
fees and terms of reference; and
• Reviewing and approving 2024 non-
audit services expenditure against
policy and previously determined limit
guidance. Reviewing and approving
non-audit services limit guidance
and expectations for 2025.
External audit scope, materiality
and execution
In May, the Committee discussed and
agreed the scope of the audit with
KPMG, including the interim review plan
(comprising audit testing, risk assurance
procedures, process walkthroughs,
controls testing and data and analysis
routines) and ensured that the audit
strategy was robust and informed by
the auditor’s assessment of the Group’s
key risks, particularly those that are
significant to the audit. KPMG outlined
to the Committee the key tests that
it intended performing on the identified
higher-risk audit areas that could lead
to material misstatement of the financial
statements and significantly influenced
the audit plan. The auditor and the
Committee confirmed a shared
understanding of these risks and key
audit matters, including passenger,
cargo and customer loyalty programme
revenue recognition, accounting for
VAT, accounting for aircraft
maintenance, restoration and hand-back
costs, and how these were to be
considered in the audit approach.
The auditor confirmed that 100% (2023:
100%) of the Group’s forecast revenue
and 97% (2023: 95%) of the Group’s
forecast total assets would be subject
to a full scope audit. The Committee
agreed that the approach was appropriate
and should provide the Board with a
high level of assurance regarding the
integrity of the financial statements and
subsequently approved the audit plan,
recognising that the plan would evolve
as the year progressed to reflect any
changes in circumstances or outlook.
External auditor quality
and effectiveness
The Committee is dedicated to ensuring
audit quality and effectiveness, which
is continuously reviewed to uphold the
rigour and challenge of the external
audit process. Updates were received
from KPMG at five Committee meetings,
enabling the Committee to assess the
quality of the audit by regularly
monitoring the auditor’s communications
with management and the Committee,
including: discussion and challenge
during Committee meetings; compliance
with relevant regulatory, ethical and
professional guidance; and an
assessment of the audit team’s
qualifications, expertise, resources and
partner performance.
In addition to its own independent
assessment, management conducted
a survey on the Committee’s behalf as
well as engaging in detailed discussion
with key executives and finance staff,
which demonstrated that the 2024
external audit was deemed to be
effective, robust and of good quality.
The Committee’s independent
evaluation considered the overall quality
of the audit, including whether the
auditor exhibited an appropriate level
of challenge and scepticism in its work
and dealings with management, and the
independence of KPMG.
The Committee also assessed the depth
of review and level of challenge provided
by the external auditor over the significant
accounting policies, judgements and
estimates made by management.
The Committee felt that KPMG
challenged management robustly on
key judgements and estimates,
accounting treatments and disclosures;
for example, in relation to loyalty
programme revenue recognition, where
KPMG’s challenge included an evaluation
of the effectiveness of management’s
expertise and modelling. The observations
and conclusion of the Committee in
respect of this matter are noted in this
report above.
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In addition to the annual evaluation,
the Committee undertook an ongoing
assessment of external audit quality
and effectiveness including, but not
limited to, the following indicators:
• the Committee oversaw formal terms
of engagement with the auditor and
agreed the audit fee;
• reports from the external auditor were
reviewed during Committee meetings
in 2024 and again in the February 2025
Committee meeting, covering: the
conclusions of the review of the Group’s
results for the half year; audit planning
updates; interim audit findings
(including those of the review of the
relevant key IT general controls);
progress update for year end matters;
and final report for year end matters;
• KPMG attended all six of the
scheduled Committee meetings and
one special meeting during the year
to answer any questions the Committee
had beyond these formal updates; and
• consideration of the FRC’s most recent
Audit Quality Review conclusions
relating to KPMG as a firm and any
specific findings relating to audits led
by the lead audit partners with IAG.
Taking all aspects of the assessment
throughout the year into consideration,
the Committee concluded that it is
satisfied that the KPMG audit was
probing, challenging and robust and
the approach provided a reliable audit
opinion with a reasonable expectation
of detecting material errors, irregularities
and material fraud. The Committee
considered the external audit to have
been effective and of a high quality.
External audit tender and transition
2021
KPMG first year of audit
following the appointment
approved by shareholders
in 2020 for the 2021, 2022
and 2023 financial years
2024
KPMG reappointment
considered and approved
by shareholders for the year
to 31 December 2024 and
annually thereafter
2025
Mandatory appointment of
new external (KPMG) audit
Spanish lead partner to sign
off on the 2026 financial year
2030
To comply with the Spanish
Act 22/2015, a competitive
tender will be required for
auditor appointment effective
for the year to 31 December
2031 unless carried out earlier
To comply with the Spanish Act 22/2015, the Committee conducted an audit tender process that concluded in January 2020.
Following KPMG’s appointment (by shareholders) as the external auditor of the Company in 2020 for the years 2021, 2022 and 2023,
the Committee reviewed and monitored the implementation of KPMG’s audit plans as well as the execution of these plans
throughout 2024. The Committee considered and recommended to the Board the reappointment of KPMG for 2025.
External auditor non-audit services and independence
Non-audit service spend in 2024 is within the total target maximum and was €2,000,000. The Committee concluded that KPMG
is independent, taking into account the level and nature of non-audit services provided.
IAG non-audit services policy: key features
Pre-approval
All non-audit services require pre-approval in accordance with the table below to ensure services approved
are consistent with the IAG non-audit services policy for permitted services. This process ensures all services
fall within the scope of services permitted and pre-approved by the Committee and does not represent
a delegation of authority for pre-approval.
Value
Pre-approver
More than €100,000
Audit and Compliance Committee Chair and Chief
Financial and Sustainability Officer
Between €30,000 and €100,000
Chief Financial Officer and Sustainability Officer
and Head of Group Audit
Less than €30,000
Head of Group Audit
Fee cap
The guideline amount is set to ensure the total fee payable for non-audit services should not exceed 70%
of the annual audit fee.
The overall value of fees for work is addressed by a target annual maximum for 2024 of €2.6 million with
an additional allowance of up to €1.6 million for large projects where the external auditor is uniquely placed
to carry out the work.
The Committee reviews the nature and volume of the non-audit services undertaken by the external auditor
on a quarterly basis.
Prohibitions
IAG’s policy includes a list of permitted non-audit services in line with the list of permitted services in the FRC’s
Revised Ethical Standard 2024 (originally introduced in 2019). Any service not on this list is prohibited.
All non-audit services over €100,000 are put to competitive tender with other providers, in line with the Group’s
procurement policy, unless the skills and experience of the external auditor make it the only suitable supplier.
Details of the fees paid to the external auditor during the year can be found in note 7 to the consolidated financial statements.
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Sustainability Statement
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Report of the
Remuneration Committee
Dear shareholder
On behalf of the Board, I am pleased
to present our 2024 Directors’
Remuneration Report, where, we set
out our key considerations and the
remuneration decisions we have reached
in 2024 both for the executive director
of IAG and for its management team.
I have also outlined details of the review
we are currently conducting in respect
of our Remuneration Policy.
Business performance
This has been a year of very strong
performance for IAG, consolidating the
Group’s post-pandemic recovery. We
have announced a strong set of financial
results as we have continued to deliver
our strategy, which is underpinned by
our transformation ambition, ensuring
we are even better placed to deliver
on our purpose of connecting people,
businesses and countries. We have
delivered significant shareholder value
through our continued strong share
price performance, and achieved
the important milestone of a return
to dividends and the launch of
a €350 million share buyback
programme in late 2024.
Highlights include:
• Operating profit before exceptional
items of €4,443 million;
• Increase in operating margin by
1.9% percentage points to 13.8%;
• Surpassed pre-pandemic capacity
and over 122 million passengers flown;
• Increased profitability has supported
significant free cash flow generation,
investment and an increasingly strong
balance sheet;
• €350 million share buyback
programme announced;
• Grew closer to our 10% sustainable
aviation fuel goal as IAG continues
to lead the industry on sustainability.
Remuneration Policy review
In light of the economic and business
context and the Group’s return to strong
sustainable performance, under the
leadership of our CEO, the Committee
continued to review the long-term
incentive framework, including that for
the CEO (the only Executive Director)
during 2024. Shareholders may recall
we had signposted this as an area
of focus for us in our 2023 Directors’
Remuneration Report.
Following review and discussions over
the recent months, the Committee has
concluded that it is appropriate
to propose a change to the CEO’s long-
term remuneration, to ensure that
it continues to adequately incentivise
the delivery of our ambitious strategic
growth plans, reinforces our high-
performance culture and unifies the
remuneration framework for all of our
management team.
Since 2021, the Restricted Share Plan
(RSP) has played an effective and
important role in incentivising, engaging
and retaining our valuable leadership
team, demonstrating its relevance and
value even beyond a period of maximum
uncertainty such as the pandemic
period. Also in 2021, an additional plan,
the Full Potential Incentive Plan (FPIP)
was introduced on a one-off basis, for
our top 250 executives below the Board.
This plan, with an exceptional stretch
target of 2024 operating profit, has
been instrumental in motivating
our management team to drive the
transformation of the business and to
deliver world-class financial performance
and a substantial increase in IAG’s
shareholder value over the past three
years.
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Heather Ann McSharry
Remuneration Committee Chair
Committee members
Date appointed
Heather Ann McSharry (Chair)
31 December 2020
Eva Castillo
31 December 2020
Emilio Saracho
20 June 2019
Nicola Shaw
1 January 2018
We are now seeking to build on the
effectiveness of the combination of
the RSP/ FPIP long-term incentive
framework below the Board, and will
introduce a new Stretch Performance
Incentive Plan (SPIP) in 2025 to operate
alongside the RSP. As before, this will
be awarded to IAG’s 300 senior leaders
as a follow-on to the 2021 FPIP. A single
grant will be made in 2025, with a three-
year performance period.
The new SPIP scheme is once again
designed to incentivise our senior
leaders to achieve stretch performance
targets ahead of our strategic plan
targets through to the end of 2027,
to maintain the focus on transforming
the business and to further reinforce
our high-performance culture.
Our CEO did not participate in the
original FPIP scheme, as the Board did
not consider it appropriate to put this
proposal to shareholders in 2021 given
the economic and business context we
were in at the time. In consultation with
our CEO, it was decided to introduce
this plan without his involvement.
We now consider it important for him to
participate in this new stretch incentive
plan, to ensure alignment and
consistency of the remuneration
framework and long-term performance
targets across the leadership team, and
ultimately fairness in remuneration
outcomes.
The Committee is therefore consulting
with shareholders on a potential change
to the Policy, to allow the CEO to
participate in this plan. At the time of
finalising this report the consultation is
ongoing. If, at the conclusion of that
process, we determine that the Policy
should be amended, this will be
proposed in our upcoming Notice of
Annual Shareholders’ Meeting.
2024 annual incentive outcome
Our annual incentive framework is based
on a combination of financial and non-
financial measures. There were no
changes to the measures for 2024,
which continue to reflect the Group’s
key focus on delivering robust financial
performance, an excellent customer
experience and strong progress towards
our sustainability and other strategic
goals. 60% of the annual incentive
was based on operating profit before
exceptional items, 20% on customer
NPS, 10% on carbon efficiency and 10%
on strategic and role-specific objectives.
The Annual Incentive Plan operated in
line with our Remuneration Policy and
reflects our strong performance in the
year. Under the formulaic outcome,
actual performance achieved was 85.7%
of the maximum opportunity, largely
driven by financial performance against
our stretching operating profit targets.
Due to fleet modernisation and
sustainable aviation fuel (SAF) we
continue to deliver against our carbon
targets, with stretch performance
achieved again in 2024. Performance
against the customer measure was
between threshold and target (with
a 4.4pts improvement versus 2023).
The Board and management team are
committed to improving our customer
propositions and actively mitigate
disruptions with continued investment
in the customer experience.
Full details of achievement against
targets are provided in the Variable
pay outcomes section of this report.
Vesting of the 2022 Restricted Share
Plan (RSP)
The restricted share award granted to
IAG’s executive director in 2022 is due
to vest in March 2025. The award is
subject to a performance underpin,
which takes into consideration IAG’s
overall financial and non-financial
performance over the relevant three-
year period.
The Committee has an established
framework for assessing whether the
performance underpin has been satisfied
over the three financial years of the
award, to ensure that the RSP vesting
outcome is appropriate in the context
of overall business performance and
that there is no payment for failure.
In assessing the 2022 award at its
February 2025 meeting, the Committee
reviewed details of IAG's financial
performance (including revenue,
profitability, operating margin, cash
generation, return on capital, as well
as performance relative to sector peers)
and key non-financial and operational
performance measures (including
progress towards IAG's sustainability
ambitions and its broader social
agenda). Further details are set out
in the Restricted Share Plan section later
in this report.
The Committee agreed that, based on its
assessment, the conditions set out in the
underpin had been satisfied. As a result,
the 2022 RSP award for the IAG CEO
will vest in full in March 2025. The
estimated value of the award is included
in the single total figure of remuneration
in this year’s report and reflects the
increase in IAG’s share price over the
plan period, with IAG leading the FTSE
in 2024 for shareholder value creation.
The award is subject to a two-year
holding period.
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Salary increases for 2025
The CEO’s salary is reviewed annually,
taking into account salary increases
in the wider Group, the external market
environment and the experience of
shareholders and other stakeholders.
We seek to balance these factors with
the need to ensure that the CEO’s salary
remains competitive in IAG’s core talent
markets. After careful consideration,
the Committee approved a salary
increase of 3% for the IAG CEO for 2025,
which is no more than the average
increase for the wider workforce.
Workforce experience
The Committee continues to evaluate
management’s remuneration within
the context of remuneration of our
wider workforce. In accordance with
IAG’s business model, the operating
companies are responsible for their
own reward frameworks and terms
and conditions and seek to ensure
that the work performed by employees
is appropriately reflected in their
remuneration, is aligned to local markets,
and competitive in attracting the
best talent.
The Committee has received regular
updates on our workforce initiatives,
including the investments made by our
operating companies, for example in
improving the portfolio of flexible
benefits offered to ensure IAG remains
attractive and competitive, and to
support the health and well-being
of employees. 85% of our employees
are covered by collective bargaining
agreements, which seek to ensure fair,
competitive and sustainable pay,
providing stability for our business
and employees.
All members of the Committee
participate in the Board workforce
engagement programme, which
provides an opportunity to engage
with employees on a broad range
of matters including remuneration.
The Committee has used these insights
to ensure decisions regarding executive
remuneration give appropriate
consideration to our approach for the
wider workforce and reflect the
expectations of all our stakeholders.
On behalf of the Committee, I would
like to take this opportunity to thank
our employees across the Group for
their continued effort, commitment,
dedication and hard work which have
been key to the success achieved
by IAG this year.
Conclusion
This year the Remuneration Committee
has again sought to take a considered
and balanced approach to executive
remuneration, taking into account our
overall performance, the experience
of our employees, shareholders,
customers and other key stakeholders
in the period. The Committee considers
that the Directors’ Remuneration Policy
operated as intended during 2024,
and the remuneration outcomes
described in this report are appropriate
in the context of the very strong
performance achieved in the period.
If proceeding with a Policy change
proposal post completion of our
shareholder consultation, we will follow up
to provide full details as soon as possible.
I would like to take this opportunity to
thank our shareholders for their support
at our 2024 Shareholders’ Meeting, both
for the renewal of our Remuneration
Policy, which received 92% of
shareholder votes in favour, and for the
implementation of our previous Policy
in 2023, which was supported by 94%
of shareholder votes.
We hope that our Directors’
Remuneration Report receives your
support at our 2025 Shareholders’
Meeting (and welcome any questions
you may have in advance).
Approved by the Board and signed
on its behalf by
Heather Ann McSharry
Remuneration Committee Chair
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IAG Chief Executive Officer
Purpose and link to strategy features
Outcomes for 2024
Implementation in 2025
Fixed remuneration
Base salary
To attract and retain talent to help
achieve our strategic objectives.
Takes account of factors such as role,
skills and contribution.
From 1 January 2024: £886,912 (€1,044,782)
(an increase of 4% from 2023).
Below the average increase for the majority
of the wider workforce.
Following a review, an increase of 3%
has been awarded. From 1 January 2025:
£913,519 (€1,076,126).
No more than the average increase for
the wider workforce.
Taxable benefits and pension-related benefits
Provides basic retirement and benefits
which reflect local market practice.
Pension at 12.5% of salary, comparable
to the rate applicable to the majority
of the UK workforce. Benefits provided
as per policy.
Benefits to be provided as per policy
and pension will remain unchanged.
Variable remuneration
Annual Incentive Plan
Incentivises annual corporate financial
and non-financial performance and the
delivery of role-specific objectives.
The deferred shares element aligns the
interest of executives and shareholders
and provides a retention tool.
For our 2024 bonus, the scorecard was
weighted as follows: 60% operating profit
(before exceptional items), 20% customer
NPS, 10% carbon efficiency and 10%
strategic and role-specific objectives.
Under those scorecard measures, the
bonus outcome was 85.7% of maximum,
and thus the 2024 bonus amount
of £1,520,000.
As the IAG CEO has met the 350%
shareholding guideline, 80% of the award
will be paid out in cash with 20% deferred
into shares for three years (otherwise 50%
deferred into shares for three years).
Maximum opportunity unchanged at 200%
of base salary.
No change to the scorecard measures
and weightings for 2025.
The targets for 2025 are commercially
sensitive and will be disclosed in the
2025 remuneration report.
Long-term incentive (RSP)
Incentivises long-term shareholder value
creation, and retention.
The second Restricted Share Plan award
comprised two awards, one in March 2022
and another in October 2022, both of
which are due to vest in March 2025.
Based on the Committee's assessment of
the performance underpin the RSP award
will vest in full. The award will be subject
to a two-year holding period post vesting.
More detail on the Committee's assessment
can be found later in this report.
In line with IAG’s Remuneration Policy, a
Restricted Share Award of 150% of salary
will be granted to the IAG CEO in 2025.
Under the policy awards vest after three
years subject to satisfaction of the
discretionary performance underpin and
are subject to a holding period of two
years post vesting.
As mentioned earlier the Committee
is consulting with shareholders on a
potential change to the Policy. At the time
of finalising this report the consultation
is ongoing. If, at the conclusion of that
process, we determine that the Policy
should be amended, this will be proposed
in our upcoming Notice of Annual
Shareholders’ Meeting.
Shareholding requirement
Provides long-term alignment with
shareholders.
The CEO of IAG is required to build up
and maintain a shareholding of 350%
of base salary.
As at 31 December 2024 the IAG CEO
had a shareholding of 643% of base salary.
Malus and clawback provisions apply to annual incentive and long-term incentive awards and the Committee has discretion
to adjust formulaic outcomes to reflect corporate performance and broader stakeholder experience.
The Committee considers that the Directors’ Remuneration Policy operated as intended during 2024.
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International Airlines Group | Annual Report and Accounts 2024
132
2024 performance and pay outcomes summary
Business performance
Key strategic highlights
• Strong operating profit and financial performance
• Strengthen our balance sheet and reinvested in the business
• Through our strong margin and balance sheet, we have been
able to accelerate the return of capital to our shareholders
• Our transformation programme is delivering better
customer experiences
• Surpassed pre-pandemic capacity
• Continued to build a sustainable business (as we continue
to renew our fleet and to invest in SAF)
Key statistics
How we performed in 2024:
• Operating profit before exceptional items €4,443 million
• (+€936 million vly)
• Net debt €7,517 million and total liquidity €13,362 million
• (-€1,728 million and +€1,738 million vly)
• Net Promoter Score (NPS1) 21.0 (+4.4 vly)
• Carbon intensity 78.1 gCO2/pkm (-3% vly)
• SAF use (tonnes CO2 saved) exceeded 469,000 tonnes
Performance outcomes
Annual Incentive Plan
Long-Term Incentive Plan
The Committee undertook an assessment of the performance
underpin attached to the restricted share awards made in 2022
and agreed that, based on this assessment, the conditions set out
in the underpin had been satisfied. As a result it is expected that
the award will vest in full in March 2025.
Threshold
Target
Stretch
85.7%
Formulaic outcome
(% of maximum)
–
Committee
judgement – no
adjustments
85.7%
Final outcome
(% of maximum)
The Committee was presented with a framework to assess
whether the underpin had been satisfied, taking into account the
overall performance for the financial years 2022, 2023, and 2024.
IAG Chief Executive Officer remuneration history (£’000)
2020: current IAG CEO appointed in September 2020.
2023: the value shown for long-term incentive has been restated this year using the share price at vesting in June 2024, which was 164 pence.
The vesting of the 2021 RSP award was provided in last year’s report based on an estimated share price of 152 pence based on a three-month average
share price from 1 October 2023 to 31 December 2023.
2024: the value shown for long-term incentive represents the estimated value of the total 2022 RSP awards granted, expected to vest in full in
March 2025. The estimate is based on a three-month average share price from 1 October 2024 to 31 December 2024 of 243 pence.
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Financial (60%)
Customer (20%)
Carbon (10%)
Strategic and role-
specific (10%)
£963 (€1,085)
£1,110 (€1,286)
£1,208 (€1,419)
£1,024 (€1,176)
£1,039 (€1,224)
£1,369 (€1,608)
£1,414 (€1,624)
£1,520 (€1,791)
£680 (€781)
£2,119 (€2,497)
£963 (€1,085)
£1,110 (€1,286)
£2,577 (€3,026)
£3,118 (€3,581)
£4,678 (€5,512)
Fixed remuneration
Annual incentive
Long-term incentive
2020
2021
2022
2023
2024
1
For the purpose of the annual incentive award, the weighting of each airline towards the overall NPS score reflects the Group's areas of focus for 2024.
Introduction
The Remuneration Committee is
responsible for the preparation of the
report of the Remuneration Committee,
which is approved by the Board.
The Company’s current policy on
directors’ remuneration was approved
by shareholders at the Shareholders’
Meeting held on 26 June 2024, following
consultation with major shareholders.
As a Spanish incorporated company,
IAG is subject to Spanish corporate law.
The Spanish legal regime regarding
directors’ remuneration is substantially
parallel to that of the UK as far as
directors' remuneration disclosure and
approval requirements are concerned.
The Company welcomes the opportunity
provided by the Spanish CNMV for
allowing companies to prepare free-
format reports. Therefore IAG is
presenting a consolidated report
responding to both Spanish and UK
disclosure requirements. This report will
be accompanied by a duly completed
form which is required by the CNMV
covering certain relevant data. This is
prepared in accordance with Spanish
legislation and is available on the
Company’s and the CNMV’s
respective websites.
It is the Company’s intention once again
to comply voluntarily with all reporting
aspects of the UK legislation of 2018,
The Companies (Miscellaneous Reporting)
Regulations (SI 2018/860) and The
Companies (Directors’ Remuneration
Policy and Directors’ Remuneration
Report) Regulations 2019, and to follow
UK standards of best practice.
In addition to the Remuneration
Committee Chair’s statement, this
Directors’ Remuneration Report contains
the Annual Report on Remuneration,
which covers the information on
directors’ remuneration paid in the
year under review.
Directors’ Remuneration Policy
Key elements of pay
executive directors
The Company’s remuneration approach
is to provide total remuneration
outcomes that reflect the delivery
of the business strategy, are
competitive, and take into account
each individual’s performance.
The Committee receives regular
updates on the pay and conditions
of the Group’s employees and takes
these into account when considering
executive directors’ remuneration.
The current Directors’
Remuneration Policy
The Policy, which was approved by
shareholders on 26 June 2024, is
available on the company website IAG
– Directors’ Remuneration Policy
(iairgroup.com).
Service contracts and exit
payments policy
Executive directors
The following is a description of the
key terms within the service contracts
of executive directors.
The service contracts are available for
inspection, on request, at the Company’s
registered office.
The contracts of executive directors
are for an indefinite period.
There are no express provisions in
executives' service contracts for
compensation payable upon termination
of those contracts, other than for
payments in lieu of notice.
Executive
director
Date of
contract
Notice period
Luis
Gallego
8
September
2020
6 months –
from / 12
months – given
The period of notice required from
the executive is six months; the period
of notice required from the Company
is 12 months. Where the Company
makes a payment in lieu of notice,
a payment becomes payable only if,
in the Company’s opinion, the executive
has taken reasonable steps to find
alternative paid work; and then only in
monthly instalments. The payments will
comprise base salary only. The Company
may reduce the sum payable in respect
of any month by any amount earned
by the executive (including salary and
benefits) relating to work done in
that month (for example, as a result of
alternative paid work referred to above).
In the event of an executive's redundancy,
compensation, whether in respect of
a statutory redundancy payment or a
payment in lieu of notice or damages
for loss of office, is capped at an amount
equal to 12 months’ base salary. The
Company will honour the contractual
entitlements of a terminated executive
director; however, the Company may
terminate an executive's service contract
with immediate effect and without
compensation on a number of grounds
including where the executive is
incapacitated for 130 days in any 12-month
period, becomes bankrupt, fails to perform
his or her duties to a reasonable standard,
acts dishonestly, is guilty of misconduct
or persistent breach of his or her duties,
brings the Company into disrepute, is
convicted of a criminal offence, is
disqualified as a director, refuses to
agree to the transfer of his or her service
contract where there is a transfer of the
business in which he or she is working;
or ceases to be eligible to work in Spain
or the UK (as applicable).
The Committee reserves the right to
make any other payments (including,
for example, appropriate legal or
outplacement fees) in connection with
an executive director’s cessation of office
or employment where the payments are
made in good faith in discharge of an
existing legal obligation (or by way of
damages for breach of such an obligation)
or by way of settlement of any claim
arising in connection with the cessation
of an executive director’s office or
employment.
Under any of the Company’s share plans,
save in respect of bonus deferral awards
(which will normally vest in full following
cessation for any reason), if an executive
director leaves, the Board, after
considering the recommendation of the
Remuneration Committee, may exercise
its discretion (within the rules of the
schemes) to grant good leaver status.
This can be granted in circumstances
including for example (list not
exhaustive) the director leaving for
reasons of ill-health, injury or disability,
redundancy, retirement or death.
Executive directors leaving with good
leaver status will normally receive a pro-
rata amount of their RSP shares, subject
to the underpin being met, in
accordance with the plan rules. The pro-
rating is normally calculated according
to what proportion of the vesting period
the executive director spent in Company
service. Normal vesting dates, holding
periods and post-cessation shareholding
guidelines will normally continue to
apply, other than in a limited number
of exceptional circumstances in
accordance with plan rules and/or at
the discretion of the Board. If good
leaver status is not granted to an executive
director, all outstanding awards made
to them will normally lapse.
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Sustainability Statement
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Executive directors leaving with good
leaver status are eligible to receive a
pro-rata annual incentive payment for
the period of the year actually worked,
subject to the usual performance
assessment and typically paid in the
normal manner following the year end.
In the event of an executive director’s
termination by the Company, they must
not be employed by, or provide services
to, a restricted business (i.e. an airline or
travel business that competes with the
Company) for a period of 12 months.
Non-executive directors
Non-executive directors (including the
Chair) do not have service contracts.
Their appointment is subject to the
Board Regulations and the Company’s
Bylaws. They do not have the right
to any compensation in the event of
termination as directors. Board members
shall hold office for a period of one year.
In accordance with UK practice, the non-
executive directors’ letters of appointment
are available for inspection, on request,
at the Company’s registered office.
Malus and clawback provisions
Malus and
clawback
provisions
Circumstances
The Board, following the advice of the Committee, has authority to reduce or cancel awards
before they are satisfied (and/or impose additional conditions on awards), and to recover
payments, if special circumstances exist. These special circumstances include (but are not
limited to):
• Fraud;
• Material breach of any law, regulation or code of practice;
• An error or a material misstatement of results leading to overpayment or over-allocation;
• Misconduct;
• Failure of risk management;
• The occurrence of an exceptional event affecting the Company’s value or reputation;
• Payments based on results that are subsequently found to be materially financially
inaccurate or misleading;
• Serious reputational damage as a result of a participant’s behaviour;
• Corporate failure; and
• Any other circumstances in which the Board considers it to be in the interests of shareholders
for the award to lapse or be adjusted.
Period
• For the cash element of the Annual Incentive Plan, clawback provisions apply for three years
from the date of payment.
• For the bonus deferral awards, there will be three years from the date of award in which
shares can be withheld, i.e. the entire period from the date of the award until vesting.
• For RSP awards, clawback provisions apply for two years post vesting.
• The clawback period for the cash element of the annual incentive plan was chosen as it
aligns with the vesting period for the deferred bonus awards. The clawback period for
the RSP was chosen as it aligns with the post-vesting holding period. These periods are
considered to allow an appropriate amount of time for any of the above circumstances
to become known.
• The proportion of an award to be withheld or recovered will be at the discretion of
the Board, upon consideration of the Committee, taking into account all relevant matters.
Malus and clawback provisions were not invoked during 2024.
When setting executive directors' remuneration, the Committee considers the factors set out in Provision 40 of the UK 2018
Corporate Governance Code. IAG operates a simple and clear remuneration framework, and the policy illustrates the potential
outcomes under various performance scenarios. Safeguards are in place to mitigate risk, such as malus and clawback and the
Committee's ability to apply discretion when determining incentive outcomes. The variable pay elements ensure that outcomes
are proportionate to performance, with measures chosen that support the strategy and reinforce IAG's values and culture.
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Financial Statements
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Annual Remuneration report
The Annual Remuneration report sets out how the Directors’ Remuneration Policy (as approved by shareholders at the Shareholders’
Meeting on 26 June 2024) was put into practice in 2024 and how it will be implemented in 2025.
The Remuneration Committee
The Remuneration Committee is regulated by article 32 of the IAG Board Regulations and by its own Regulations last approved
on 27 February 2025. A copy of these Regulations is available on the Company’s website.
Beyond executive directors, the Committee reviews the remuneration arrangements for members of the IAG Management
Committee (and considers remuneration matters related to other senior executives and the wider workforce across the Group).
Article 32 of the Board Regulations ensures that the Remuneration Committee is composed of not less than three independent
non-executive directors, who have the dedication, capacity and experience necessary to carry out their function. Heather Ann
McSharry chairs the Committee and is also IAG’s Senior Independent Director. None of the Committee members has any personal
financial interest, other than as a shareholder, in the matters to be decided.
In accordance with the 2018 UK Corporate Governance Code, the Remuneration Committee also has responsibility for reviewing
workforce remuneration and related policies, and the alignment of incentives and rewards with culture.
Statement of voting
The table below shows the consultative vote on the 2023 Annual Directors’ Remuneration report and the Directors' Remuneration
Policy approval at the 2024 Shareholders' Meeting:
Number of votes cast
For
Against
Abstentions
2023 Annual Directors’
Remuneration report
2,429,999,757
2,276,435,642
23,412,358
130,151,757
(100)%
(93.68)%
(0.96)%
(5.36)%
2024 Directors’ Remuneration Policy
2,429,999,757
2,232,389,109
65,902,288
131,708,360
(100)%
(91.87)%
(2.71)%
(5.42) %
The Committee’s activities during the year
In 2024, the Committee met eight times (four scheduled meetings and four extraordinary meetings held in June, July, October and
December) and discussed, among other things the following matters:
Meeting
Agenda items discussed
January
• Review of IAG executive directors’ Remuneration Policy
• 2023 Directors’ Remuneration Report and Non-Financial Information Statement
• Management Committee pay benchmarking review
• IAG CEO 2024 base salary review
• Approval of grants under the Restricted Share Plan (RSP)
February
• Validated the report in relation to the proposal to amend the Directors’ Remuneration Policy
• Review of the 2023 annual incentive outturn
• Initial assessment of the vesting outcome of the 2021 Restricted Share Plan (RSP) award
• Approval of the 2023 Directors’ Remuneration Report
• Approval of the 2024 Annual Incentive Plan
• 2024 Management Committee role-specific objectives
• Approval of share awards for senior executives and delegation of authority for future awards
• Share ownership update: review of executive holdings, share awards authority and dilution limits
May
• Market update on executive remuneration trends
• Executive director remuneration
• Review of long-term incentives vehicles: incentivising stretch performance
• 2024 Annual Incentive Plan update
• Authorisation for the allotment of shares for IAG share plans
June
• Vesting outcome of the 2021 Restricted Share Plan (RSP) award
July
• Review of market trends and feedback from investors after the 2024 AGM
• Long-term performance incentive approach
• Executive director remuneration (including benchmarking review)
October
• Approval of termination payment for IAG Management Committee member
November
• Market perspective on long-term incentive structures
• Update on 2024 Annual Incentive Plan and FPIP potential outturns
• Workforce remuneration update
• Remuneration strategy for 2025 (including long-term performance incentive scheme)
December
• Consideration of the long-term incentive model
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
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Advisers to the Committee
The Committee appointed Deloitte as its external adviser in September 2016. Deloitte reports directly to the Committee. The fees
paid to Deloitte for advice provided to the Remuneration Committee during 2024 were £156,440 (€184,286), charged on a time
and materials basis. Deloitte is a member of the Remuneration Consultants Group and a signatory to its voluntary UK Code of
Conduct. As well as advising the Remuneration Committee, other Deloitte teams provided advisory services to other parts of the
Group in 2024. The Committee has reviewed the remuneration advice provided by Deloitte during the year and is comfortable that
it has been objective and independent.
In addition to Deloitte providing the Remuneration Committee with market updates on pay themes, the Committee also received
market data and insights from other specialist consultants such as Aon, PwC and Willis Towers Watson in 2024.
Consideration of shareholder views
The Company consults regularly with its major investors on all matters relating to executive remuneration. The Company will engage
in an extensive investor consultation exercise whenever there are any significant changes to Remuneration Policy.
The Committee discusses each year the issues and outcomes from the Annual Shareholders’ Meeting, and determines any
appropriate action required as a result.
Single total figure of remuneration for the Executive Director
The table below sets out a breakdown of the single total figure of remuneration breakdown for the IAG CEO, who was the only
executive director during 2024. An explanation of how the figures are calculated follows the table.
CEO: Luis Gallego
£’0001
€’0001
2024
2023
2024
2023
Base salary
887
853
1,045
980
Benefits
41
64
49
74
Pension
111
107
131
122
Total fixed remuneration
1,039
1,024
1,224
1,176
Annual incentive
1,520
1,414
1,791
1,624
Cash
1,216
707
1,433
812
Deferred into shares for three years
304
707
358
812
Long-term incentive2,3
2,119
680
2,497
781
Total variable remuneration
3,639
2,094
4,287
2,350
Single figure of total remuneration4
4,678
3,118
5,512
3,581
1
Remuneration is paid to the Executive Director in pounds sterling and expressed in euros for information purposes only.
2 2024 long-term incentive: the value shown in this table represents the estimated value of the 2022 RSP awards granted in March and October 2022,
which are expected to vest in full in March 2025. The estimate is based on a three-month average share price from 1 October 2024 to 31 December
2024 of 243 pence.
3 2023 long-term incentive: the value for the vesting of the 2021 RSP award was provided in last year’s report based on an estimated share price of 152
pence based on a three-month average share price from 1 October 2023 to 31 December 2023. This has been restated this year using the share price
at vesting in June 2024, which was 164 pence.
4 Note that the value shown in this table differs from the value shown in the CNMV Statistical Annex accompanying this report, as the reporting criteria
established by the CNMV differ from those used in this table.
Additional explanations in respect of the single total figure table for 2024
Only the current IAG CEO, Luis Gallego, served as an executive director in 2024. As the sole executive director, the IAG CEO
has confirmed in writing that he has not received any other forms of remuneration other than those already disclosed in the
table above.
Base salary
The values shown represent the actual salary paid to the IAG CEO for each performance year.
For 2024, an increase of 4% was awarded. This was below the average increase for the wider workforce, which was more than 5%.
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Taxable benefits
Taxable benefits include the provision of a company car, a fuel allowance, executive support services and private health insurance.
Pension-related benefits
This includes the employer’s contribution to a pension scheme and/or cash in lieu of a pension contribution.
Annual Incentive Plan
For the CEO’s bonus in 2024, our scorecard was weighted to the following measures: 60% operating profit (before exceptional
items), 20% customer NPS, 10% carbon efficiency and 10% personal and strategic objectives.
Under these scorecard measures, the bonus outcome was 85.7% of maximum. The outcomes of the performance conditions and
outcomes that determined the award are described in detail later in the report.
Under the current Policy, as the IAG CEO has met the 350% shareholding guideline, 80% of the award will be paid out in cash with
20% deferred into shares for three years (if the guideline had not been met, 50% would be deferred into shares for three years).
For 2023, the bonus outcome was 82.9% of maximum. Under the previous policy, half of the annual incentive was deferred into
shares for three years; these will vest in March 2027.
Long-term incentive vesting
In 2021 the then-existing Performance Share Plan was replaced with a Restricted Share Plan (RSP). The second Restricted Share Plan
award comprised two awards, one in March 2022 and another in October 2022, both of which are due to vest in March 2025.
The Committee undertook an assessment of the performance underpin attached to the restricted share awards made in 2022 and
agreed that, based on this assessment, the conditions set out in the underpin had been satisfied. As a result the awards will vest
in full in March 2025.
More detail on the Committee's assessment can be found later in this report.
Share price appreciation and depreciation
The share price at grant was 141 pence and the estimated share price at vest is 243 pence, representing a growth of 102 pence per
share. The overall value of the vesting of the 2022 RSP awards that is attributable to share price growth is, therefore, £889,619.
The Committee has not exercised any discretion as a result of share price appreciation or depreciation for any of the remuneration
in the above table.
Life insurance
The Company provides life insurance and accidental death cover for executive directors. For the year ended 31 December 2024
the Company paid life insurance premium contributions of €17,847 (2023: €17,050).
Exchange rate for 2024
For the year to 31 December 2024, the £:€ exchange rate applied is 1.1780 (2023: 1.1486).
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Variable pay outcomes
2024 Annual Incentive Plan
The IAG Annual Incentive Plan supports the business strategy through incentivising the delivery of identified priorities within
the reporting period. The measures selected reflect the most important priorities for the Group for the year to deliver long-term
sustainable returns. For 2024, the Board at the beginning of the year, following a recommendation by the Committee, set the
following measures:
Weighting
KPI
Description
60% financial
IAG operating profit
(before exceptional items)
For 2024 it was considered that operating profit continued
to be the most appropriate financial KPI in aligning shareholder
interest with the Company
20% customer
Group Net Promoter Score
by relevance (NPS)
NPS is used to gauge the loyalty and experience of the Group’s
customer relationships. It is calculated based on survey
responses to the likelihood to recommend, by subtracting
the percentage of customers who are ‘detractors’ from
the percentage of customers who are ‘promoters’.
The weighting of each airline in the overall NPS score reflects
the Group's areas of focus for 2024
10% IAG-specific carbon
efficiency measure
Group grammes of CO2 per
passenger kilometre (gCO2/ pkm)
This measure reflects our progress towards our Flightpath net
zero 2050 commitment; it measures the fuel efficiency of our
flight operations, taking account of our network, aircraft mix
and passenger load factors
10% strategic and role-specific
Operational performance
Drive the operational performance of the airlines against agreed
customer, operational, and financial targets
Competitiveness
Define and implement medium-term strategic plan that
strengthens IAG’s position in key markets
Transform IAG
Define and implement key projects that transform cost,
customer experience and culture
Sustainability
Delivery of SAF plan to underpin net zero ambition
People
Build culture and capability to underpin the Group’s long term
success. Continue to drive bench-strength and diversity of
leadership including transition of new airline CEOs
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IAG CEO Annual Incentive Plan – performance against targets
Under the Policy, the IAG CEO has a maximum annual incentive opportunity of 200% of contractual salary. The table below details
the approved 2024 performance measures and the Board's assessment of both Company and individual IAG CEO performance:
Category
Threshold
Target
Stretch
Measure
type
Weighting
At which
payments
begin (20%
pay-out)
(50% pay-
out)
Max
pay-out
(100%)
Performance
delivered
Payout % of
maximum
for each
measure
Weighted
payout %
CEO
incentive
outcome
(£’000)
Financial
measures
2024
Operating
profit before
exceptional
items
(€m)
60%
2,418
3,455
4,491
4,443
97.7%
58.6%
£1,039
Description of performance
In 2024, the Group benefited from strong demand for travel across our core markets. Capacity growth was particularly strong in
LACAR which grew 12% versus 2023, while Domestic (Spain and UK) and North Atlantic grew 6% and 3% respectively. All of our
airlines developed their networks and grew capacity versus last year, with increased load factors. IAG also benefited from lower
fuel unit costs with increased capacity offset by reduced average commodity fuel prices during the year. The result was a strong
operating profit before exceptional items for the year of €4,443 million, versus a target of €3,455 million.
Customer
2024
NPS1
20%
17.14
22.85
28.56
21.0
40.4%
8.1%
£144
Description of performance
The outcome for 2024 was 21.0 (4.4pts higher than 2023) vs a target of 22.85. Disruptions, stemming from diverse factors such
as air traffic control and fleet and supply chain challenges, impacted negatively our NPS. To mitigate this impact our airlines have
invested in fleet, IT, customer propositions and operational resilience aimed at improving on-time performance, communication
and support during disruptions and all baggage-related processes, among others. Positive impacts to our NPS can be attributed
to substantial investment in our cabins and cabin product, digitalisation and personalising the customer journey and rewarding
customers through loyalty programmes and benefits. NPS continues to be a key area of focus for both management team and
the Board.
1
For the purpose of the annual incentive award, the weighting of each airline towards the overall NPS score reflects the Group's areas of focus for 2024.
Carbon
2024
gCO2/pkm
10%
81.5
80.2
78.9
78.1
100.0%
10.0%
£177
Description of performance
The outcome for 2024 was 78.1 vs a target of 80.2. IAG is targeting net zero emissions by 2050 across its Scope 1, 2, and 3
emissions. IAG’s interim targets are an 11% improvement in fuel efficiency 2019-2025, a 20% drop in net Scope 1 and 3 emissions
2019-30, and 10% SAF in 2030.
IAG achieved in 2024 its 2025 target, and is on track to deliver its 2030 and 2050 climate targets by carrying out emission
reduction initiatives, working in collaboration with key stakeholders and proactively advocating for supportive government
policy and technology development. Key measures to reduce emissions are fleet modernisation, sustainable aviation fuel (SAF),
market-based measures including the UK and EU ETS and CORSIA, and carbon removals.
Strategic
and role-
specific
objectives
As described in
the table on the
previous page
10%
Low (0%
to 40%)
Good to
high (45%
to 65%)
Exceptional
(70% to
100%)
Exceptional
90.0%
9.0%
£160
Description of performance
The Committee and the Board considered the CEO’s performance against the KPIs set out on the previous page and assessed
his performance against each of those indicators. The IAG CEO has played a critical role in delivering the strong performance
for the Group in 2024, as set out in the Strategic Report, and in navigating the Group through industry headwinds, ongoing
geopolitical changes and conflicts and an evolving political landscape and policy environment.
Total
100%
85.70%
£1,520
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For all measures, there is a straight-line sliding scale between the threshold level and the on-target level, and between the on-target
level and the stretch target level.
As at 31 December 2024 the CEO of IAG had a shareholding of 643% of basic salary, meeting the 350% shareholding guideline,
therefore, 80% of the annual incentive award will be paid in cash with 20% deferred into shares for three years.
2024 CEO performance annual incentive award outcome
Formulaic scorecard
outcome
Remuneration
Committee judgement
Final scorecard outcome
as % of maximum
85.70%
85.70%
% of maximum
–
No adjustment
X
Maximum bonus opportunity
(% of base pay)
200%
X
Base pay (£’000)
£887
=
2024 Annual Incentive Award
(£’000 shown in single
figure table)
£1,520
€1,791
IAG Restricted Share Plan (RSP) awards
The RSP was introduced from 2021 to increase the alignment of both interests and outcomes between the Group’s senior
management and shareholders through the build-up and maintenance of senior management shareholdings and to drive an
increased focus on the long-term, sustainable performance of the Company.
A three-year vesting period and further two-year holding period apply to RSP awards for executive directors, with vesting being
dependent upon a satisfactory review of the discretionary underpin by the Remuneration Committee.
Malus and clawback provisions apply to RSP awards, enabling the reduction of awards right down to nil value to further ensure that
corporate or individual failure is not rewarded under the plan.
2022 Restricted Share Plan (RSP) award vesting
The second Restricted Share Plan award comprised two awards, one in March 2022 and another in October 2022, both of which are
due to vest in March 2025. The Committee undertook an assessment of the performance underpin which applies to the restricted
share award and considers IAG’s overall financial and non-financial performance.
As part of this process, the Committee was presented with a framework to assess whether the underpin had been satisfied, taking
into account the overall performance for the financial years 2022, 2023, and 2024. The different elements considered included:
• The overall financial results for the period. The Committee’s assessment took into account overall profitability, operating margins
(including against comparable airlines), revenue, cash generation, return on capital and the Company’s investment in fleet,
customer and transformation. The Committee was satisfied that the conditions of the underpin in this regard had been satisfied.
• The Group's performance against key non-financial and operational performance measures, including progress towards IAG's
sustainability ambitions and its broader social agenda (including diversity and inclusion). The Committee was satisfied that the
conditions of the underpin in this regard had been satisfied.
• IAG’s risk context. The Group’s overall performance has been fundamentally in line with its approved risk appetite and internal
control framework and no material issues have been identified.
• The Group’s wider stakeholder experience in the period. This does not give rise to any material concerns.
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The purpose of the framework was to ensure that the RSP outcome can be justified and to guard against payment for failure.
The Committee agreed that, based on its assessment, the conditions set out in the underpin had been satisfied. As a result the 2022
RSP awards will vest in full in March 2025. The award is subject to a two-year holding period.
2022 RSP (number of shares awarded)
872,860
x
Estimated share price1
£2.43
=
Award shown in the single figure table (£’000)2
£2,119
€2,497
1
Value shown represents the estimated value of the 2022 RSP award vesting in March 2025. The estimate is based on a three-month average share
price from 1 October 2024 to 31 December 2024.
2 When reviewing the vesting outcome for the 2022 RSP, the Committee was mindful that the share price has increased 72% over the vesting period
(estimated vesting share price versus share price at grant). The Committee gave careful consideration to the share price evolution, and to the
delivery of the strategy and transformation. As such, no discretion was exercised in respect of share price appreciation.
Scheme interests awarded during the financial year 2024 Restricted Share Plan (RSP)
Type of award
Company shares
Basis of determination
of the size of award
Awards only made to consistently high-performing executives in key roles who have the potential to take
on greater organisational responsibility and whom the Company wishes to retain for the long term.
Executive director
award face value
IAG CEO (Luis Gallego) – 150% of base salary
Date of grant
March 2024
Grant price
£1.521
Vesting period
Three years: March 2024 to March 2027
Holding period
Two years: March 2027 to March 2029
Discretionary underpin
description
No performance measures are associated with the awards. Vesting will be contingent on the satisfaction
of a discretionary underpin, assessed over the financial years 2024, 2025 and 2026 of the Company
(i.e. 1 January 2024 to 31 December 2026). In assessing the underpin, the Committee will consider the
Company’s overall performance, including financial and non-financial performance measures, as well as
any material risk or regulatory failures identified. Financial performance may include elements such as
revenue, profitability, cash generation and return on capital; and may be benchmarked against
comparable airlines. Non-financial performance may include a range of operational and strategic measures
critical to the Company’s long-term sustainable success. This assessment will ensure any value delivered
to executive directors is fair and appropriate in the context of the performance of the business and
experience of our stakeholders and that corporate or individual failure is not rewarded. In the case of
significant failure on the part of the Company or the individual, vesting may be reduced, including to nil.
Full disclosure of the Remuneration Committee’s considerations in assessing the underpin will be
disclosed in the relevant Directors’ Remuneration Report.
1
Average closing share price between 6 March 2024 and 12 March 2024
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Total pension entitlements
Luis Gallego is not a member of the Company’s pension scheme, and the Company, therefore, did not pay any contributions in
his time as an executive director during the reporting period (1 January 2024 to 31 December 2024). He received cash in lieu of
contributions of £110,864. This value is equivalent to 12.5% of base salary paid during the financial year and is comparable to the rate
for the majority of the UK workforce.
Statement of executive directors’ shareholdings and share interests
In order that their interests are aligned with those of shareholders, executive directors are required to build up and maintain
a minimum personal shareholding in the Company.
Under the Group’s shareholding guidelines, the IAG CEO is required to build up and maintain a shareholding of 350% of salary
and other executive directors would be required to build up and maintain a shareholding of 200% of basic salary.
In addition, executive directors are required to retain all shares received via incentive plans until 100% of their shareholding
requirement is attained.
The Committee has reviewed the IAG CEO’s progress against the requirement and notes that he is compliant with the Policy requirement.
CEO, Luis Gallego
Policy requirement
3.5 times salary
Actual
6.43 times salary (2,069,660 shares)
Shares which qualify under the Policy include shares already held by the executive, vested and exercised shares, vested and
unexercised shares including those in the Performance Share Plan holding period, vested shares in the Restricted Share Plan holding
period and unvested deferred annual incentive shares.
The chart and table below summarise current executive directors’ interests as of 31 December 2024:
82%
335%
93%
49%
83%
643%
Shares owned
Shares already vested, or in the holding period, from performance share plans
Shares already vested from deferred annual incentive plans
Shares already vested, or in the holding period, from restricted share plans
Unvested shares from deferred annual incentive plans
Shareholding requirement
Shareholding %
of Base Salary
Executive
director
Shareholding
requirement
Shares
owned
Shares already
vested, or in the
holding period, from
performance share
plans
Shares already
vested from
deferred annual
incentive plans
Shares already
vested, or in
the holding
period, from
restricted
share plans
Unvested shares
from deferred
annual incentive
plans
Total
qualifying
shares held1
Consequence
of a +/- €0.5
share price
change (€)
Luis
Gallego
350 %
of salary
403,834
684,908
277,619
219,926
483,374
2,069,660
(643% of
salary)
1,034,830
1
In accordance with the Policy, the share price used to calculate the percentage of salary guideline is either the share price on the date of award
or on the date of vesting/exercise.
On departure from the Group, executive directors will be required to hold an amount of shares in line with their in-employment
shareholding requirement (or the number of shares that they own at departure if lower) for two years from their date of termination.
Shares will normally be retained in the nominee account administered by the Company to ensure this.
There have been no changes to the shareholdings set out above between 31 December 2024 and the date of this report.
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External non-executive directorship
The Company’s consent is required before an executive director can accept an external non-executive appointment and permission
is only given in appropriate circumstances. The current executive director has no external non-executive appointments.
IAG CEO remuneration history
The table below shows the IAG CEO single total figure of remuneration for the latest ten-year rolling period:
IAG CEO – total single
figure of remuneration
Annual incentive payment as a
percentage of the maximum
Long-term incentive vesting as a
percentage of the maximum
2015
Willie Walsh
£6,455,000
80.00 % of maximum
100.00 % of maximum
2016
£2,462,000
33.33 % of maximum
50.00 % of maximum
2017
£3,954,000
92.92 % of maximum
66.67 % of maximum
2018
£3,030,000
61.85 % of maximum
46.19 % of maximum
2019
£3,198,000
51.97 % of maximum
72.11 % of maximum
2020
Willie Walsh
£662,000
No annual incentive payment
Zero vesting of long–term incentives
Luis Gallego
£301,000
No annual incentive payment
Zero vesting of long–term incentives
2021
Luis Gallego
£1,110,000
No annual incentive payment
Zero vesting of long–term incentives
2022
£2,577,000
83.5 % of maximum
Zero vesting of long–term incentives
2023
£3,118,000
82.9 % of maximum
–1
2024
£4,678,000
85.7 % of maximum
–1
1
2023 and 2024 long-term incentives: from 2021, restricted share awards were granted to the IAG CEO which have no performance conditions and
vest subject to the satisfaction of performance underpins. The values of the restricted share awards are included in the single total figure table
in the relevant years.
The single total figure of remuneration includes basic salary, taxable benefits, pension-related benefits, Annual Incentive Award
and any long-term incentive vesting.
IAG’s total shareholder return (TSR) performance compared to the FTSE 100
The chart below shows the value by 31 December 2024 of a hypothetical £100 invested in IAG shares on 1 January 2015 compared
with the value of £100 invested in the FTSE 100 index over the same period. The other points plotted are the values at intervening
financial year ends. A spot share price has been taken on the date of listing, and a three-month average has been taken prior to the
year ends.
The FTSE 100 was selected because it is a broad equity index of which the Company is a constituent, and the index is widely recognised.
£
IAG
FTSE 100
Jan 2015
Dec 2015
Dec 2016
Dec 2017
Dec 2018
Dec 2019
Dec 2020
Dec 2021
Dec 2022
Dec 2023
Dec 2024
0
50
100
150
200
250
300
In 2024 IAG was the top performing FTSE stock.
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Non-executive directors
Non-executive directors are paid a flat fee each year, as per the following table.
Role
2024 fee
2025 fee
Non-executive Chairman
€645,000
€645,000
Non-executive directors
€120,000
€120,000
Additional fee for Chair of the Audit and Compliance Committee and of the Remuneration
Committee
€30,000
€30,000
Additional fee for Chair of the Nominations Committee1 and of the Safety, Environment
and Corporate Responsibility Committee
€20,000
€20,000
Additional fee for Senior Independent Director
€30,000
€30,000
1
The Chairman of the Board chairs the Nomination Committee. As such, he does not receive any additional fees for chairing this Committee.
The fees for non-executive directors were last reviewed in October 2023. The fee for the position of non-executive director will
remain unchanged for 2025, as it has been since 2011.
However, the Board, following a recommendation from the Remuneration Committee, agreed that from 1 January 2024, the
additional fee for chairing a Committee would increase to €30,000 for the Chair of the Audit and Compliance Committee and Chair
of the Remuneration Committee. This more closely reflects the complexity and time commitment of these roles.
Single total figure of remuneration for each non-executive director
The total remuneration of each of the non-executive directors for the years ended 31 December 2024 and 31 December 2023 is set
out in the table below.
Director (€'000)
2024
2023
Fees
Taxable
benefits
Total
Fees
Taxable
benefits
Total
Javier Ferrán
645
23
668
645
8
653
Heather Ann McSharry1
180
10
190
170
3
173
Giles Agutter2
59
–
59
120
–
120
Peggy Bruzelius
120
1
121
120
4
124
Eva Castillo1,3
133
23
156
120
2
122
Margaret Ewing1,3
138
10
148
140
4
144
Maurice Lam
120
23
143
120
9
129
Bruno Matheu4
62
–
62
–
–
–
Robin Phillips
120
15
135
120
18
138
Emilio Saracho
120
13
133
120
11
131
Nicola Shaw
140
–
140
140
4
144
Total (€’000)
1,837
118
1,955
1,815
63
1,878
1
From 1 January 2024 received an increase in fee for chairing the Remuneration Committee or Audit and Compliance Committee (from €20,000
to €30,000).
2 Giles Agutter stepped down from the Board in June 2024, and his fees reflect a part-year of service.
3 Eva Castillo replaced Margaret Ewing as Chair of the Audit and Compliance Committee from 1 August 2024.
4 Bruno Matheu was appointed in June 2024, and his fees reflect a part-year of service.
Additional explanations in respect of the single total figure table for each non-executive director
Each non-executive director has confirmed in writing that they have not received any other forms in the nature of remuneration
other than those already disclosed in the table above.
Taxable benefits
Taxable benefits for non-executive directors relate to personal travel benefits.
Exchange rates
For the year to 31 December 2024, the £:€ exchange rate applied is 1.1780 (2023: 1.1486).
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Directors’ interests in shares
Total shares and
voting rights
Percentage
of capital
Javier Ferrán
774,750
0.016 %
Luis Gallego
1,366,361
0.027 %
Peggy Bruzelius
–
– %
Eva Castillo
–
– %
Margaret Ewing
18,750
– %
Maurice Lam
–
– %
Bruno Matheu
–
– %
Heather Ann McSharry
55,000
0.001 %
Robin Phillips
–
– %
Emilio Saracho
–
– %
Nicola Shaw
4,285
– %
Total
2,219,146
0.045 %
There have been no changes to the shareholdings set out above between 31 December 2024 and the date of this report.
Payments to past directors
Travel benefits were received during 2024 by the following former non-executive directors:
Former non-executive directors
Value
Alberto Terol
€20,000
Patrick Cescau
€32,000
Maria Fernanda Mejía
€28,000
Kieran Poynter
€13,000
Dame Marjorie Scardino
€6,000
James Lawrence
€29,000
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Wider workforce in 2024
A key area of focus for the Committee over 2024 was understanding the broader workforce experience and reviewing the actions
taken to support our wider workforce.
Workforce experience highlights
• Within IAG’s unique operating model, employee reward is owned and managed within each operating company, to enable them
to deliver the right customer and employee experience.
• Our employees have been central to our transformation and key to delivering for our customers. Operating companies continue
to support our people and ensure our pay models are sustainable, fair and aligned to the operating company’s competitiveness.
• 85% of employees are covered by collective bargaining agreements with more than 30 collective bargaining agreements in
place across the Group.
• The Committee has received regular updates on workforce experience and in particular the steps the operating companies have
taken to support colleagues, both in terms of support with cost of living challenges, and their overall wellbeing.
• This includes regular updates on the investments our operating companies have made in improving the colleague experience
and our employee benefit schemes. This includes enhanced flexible benefits offerings (e.g. enhanced British Airways staff travel),
mental health and physical health offerings (e.g. implementation of EAPs (employee assistance programmes) and free
menopause support) and financial wellbeing support.
• The Committee’s insight into the experience of our colleagues helps to ensure that our decisions regarding executive
remuneration take into account the approach taken across our workforce and reflect the expectations of all our stakeholders.
Engaging with employees
Workforce remuneration
Gender pay
All members of the Remuneration
Committee (among other Board
members) participate as designated
directors in the Board workforce
engagement plan. This engagement
includes remuneration and other
workforce experience matters relevant
to the Committee.
The key themes from the 2024
engagement were shared with the
Board in order to understand colleague
experiences and to identify any areas
for improvement. Further details
of the Board engagement with
employees is set out in the
Stakeholder engagement section
of the Corporate Governance report.
Each operating company has sought
to reach collective agreements that best
support colleagues while ensuring the
business and pay remain competitive.
Agreements reached have included
changes in allowances, one-off payments
and contractual pay increases
throughout the Group.
Each operating company is committed
to creating a positive working environment
and also to actively contribute to and
support the overall wellbeing of every
colleague through the provision of a
comprehensive range of health, financial
and lifestyle benefits.
Operating companies have implemented
a range of initiatives to support gender
equality, including reviewing recruitment
processes to ensure diverse shortlists and
interview panels; setting up mentoring and
networking opportunities for women; and
providing educational programmes for girls
and young women considering career
paths in aviation.
In 2024, as the Group continued to expand
its workforce, particularly in customer
service, airport supervisory and other
corporate roles, the composition of the
workforce evolved, resulting in changes
to the median pay point for both men and
women compared to 2023. The result is
that at Group level, there has been a year-
on-year reduction in the median salary gap
from 8.4% in 2023 to 5.1% in 2024.
Further details of the gender pay gap is set
out in the Sustainability Statement section
of the report.
Remuneration decisions made by the Committee align with our strategy, with our stakeholders’ interest in our delivery of long-term
sustainable value, and with the interests of the wider workforce. Our approach is in line with the principles set out in our Policy.
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147
Alignment of executive director and workforce remuneration
The Committee has oversight of workforce remuneration and related policies across the Group and takes this knowledge into
account when setting remuneration for the IAG CEO and senior management. The table below summarises the remuneration
structure for the wider workforce.
IAG CEO
Below Board level
Base salary From 1 January 2024: £886,912 (€1,018,707) (an increase
of 4% from 2023). Below the average increase for the
majority of the wider workforce.
Salary increases as a percentage of salary are normally
aligned with, or lower than, those of the wider workforce.
85% of our employees are covered by collective
bargaining agreements. Salary increase budgets for
employees are determined by each operating company
on a country-by-country basis.
Salary increases reflect position against market,
performance, skills, contribution and development in role.
If we compare the 2024 base salary increases of the
IAG CEO against the UK workforce in 2024, of the
35,408 employees present in both 2023 and 2024, the
average salary increase awarded was 5.5% of contractual
base salary.
Taxable
benefits
Benefit packages are broadly aligned with those of other
employees who joined in the same country at the same time.
Benefits are set by operating companies at a competitive
level and are appropriate given local market practice.
Pension
Pension contribution of 12.5% of salary in line with the rate
applicable to the majority of the workforce in the country
in which the individual is based.
Pension arrangements reflect local market practices
and requirements.
Annual
Incentive
Awards
The maximum opportunity in the Annual Incentive Plan
is 200% of salary.
The majority of the annual incentive is based on financial
measures. In 2024, 60% was based on operating profit before
exceptional items, 20% on customer NPS, 10% on an IAG-
specific carbon efficiency measure to further drive progress
towards our Flightpath net zero 2050 commitment, and 10%
on strategic and personal objectives.
Under the current Policy, as the IAG CEO has met the
350% shareholding guideline, 80% of the award will be
paid out in cash with 20% deferred into shares for three
years (if the guideline had not been met, 50% would be
deferred into shares for three years).
For eligible employees incentive plans were in place
against objectives designed to focus on financial,
customers, carbon efficiency and personal targets.
Opportunities vary by role and outturns and payments
against these plans were managed at a local level.
Long-term
incentives
Maximum restricted share plan opportunity of 150%
of base salary, and subject to the satisfaction of
performance underpins.
Awards are also subject to a three-year vesting period
followed by a two-year holding period.
Restricted share awards are granted to senior managers
across the Group to incentivise long-term shareholder
value creation.
Also by exception, other identified employees may
participate where an award of long-term incentives is
deemed critical to retention.
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148
CEO pay ratio
The ratios set out in the table below compare the total remuneration of the CEO (as included in the single figure table) to the
remuneration of a median UK employee as well as the UK employees at the lower and upper quartiles. The disclosure will build
up over time to cover a rolling 10-year period.
Year
CEO single figure (£‘000)
Method1
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
2024
4,678
Option A
89:1
74:1
48:1
2023
3,118
Option A
63:1
51:1
33:1
2022
2,577
Option A
59:1
45:1
29:1
2021
1,110
Option A
29:1
21:1
14:1
2020
963
Option A
34:1
23:1
15:1
2019
3,198
Option A
109:1
72:1
49:1
The pay ratio figures in the above table are calculated using the following UK employee remuneration information:
Year
UK employee pay
25th percentile pay
Median pay
75th percentile pay
20242
Basic salary (£’000)
33.1
47.7
72.7
Total remuneration (£’000)
52.6
63.6
97.7
2023
Basic salary (£‘000)
30.2
43.5
66.8
Total remuneration (£‘000)
49.2
61.4
95.3
2022
Basic salary (£‘000)
27.7
40.9
62.4
Total remuneration (£‘000)
43.4
57.1
90.5
1
The ratio continues to be calculated on the most statistically accurate basis, Option A. UK employee pay is based on the payroll records of
42,066 employees who were in the Group for the whole of or some of 2024.
2 To ensure the accuracy of these calculations, earnings data were collected directly from the UK payroll on a month-by-month basis. Any variable
incentive elements in respect of 2024, payable to employees later in 2025, are modelled on an employee-by-employee basis against agreed
frameworks. This approach enables fair and accurate comparison to the IAG CEO 2024 single total figure of remuneration.
The increase in the UK employee remuneration in 2024 reflects:
• Operating companies are responsible for reward frameworks and terms and conditions, and seek to ensure that the work
colleagues do is appropriately reflected in their remuneration and are aligned to local market, sustainable and competitive
in attracting the best talent.
• Across our operating companies we have put in place a number of programmes to support our people.
• Payments made to managers under the 2024 Annual Incentive Plan and under the Restricted Share Plan.
• Changes to the size and composition of the UK workforce between years, with pay for 40,248 employees being reported
for 2023 and 42,066 for 2024.
The change in the IAG CEO’s remuneration between 2023 and 2024, is due to:
• An increase of 4% in basic salary for 2024, below the average increase of the wider workforce (4% increase in 2023 was first
increase since appointment, with no increase in 2021 and 2022, 10% reduction in 2021 and 20% reduction in 2020).
• The inclusion of an estimated value of the 2022 RSP awards, which will vest in full in March 2025, and be released at the end
of the normal two-year holding period.
The median pay ratio for 2024, and the recent trends in pay ratios, are consistent with IAG’s remuneration framework and reflect
the variable nature of the IAG CEO’s total remuneration. The Committee is satisfied that the median pay ratio reported this year
is consistent with our pay policies in the UK and in line with market, experience and skills.
Other details of the CEO pay ratio is set out in the Sustainability Statement section of the report.
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Change in directors’ remuneration compared to employees’
The table below shows a comparison of the change in year-on-year remuneration for directors of the Group, to the equivalent
change for UK employees from 2021 to 2024.
Director
2023 to 2024
2022 to 2023
2021 to 2022
Salary or
fees
Taxable
benefits
Annual
incentive
Salary or
fees
Taxable
benefits
Annual
incentive
Salary or
fees1
Taxable
benefits
Annual
incentive
Luis Gallego2
7 %
(34) %
10 %
2 %
(78) %
1 %
13 %
3 %
100 %
Javier Ferrán
– %
188 %
– %
60 %
13 %
25 %
Heather Ann McSharry3
6 %
233 %
16 %
(50) %
36 %
100 %
Giles Agutter4
(51) %
– %
– %
– %
11 %
(100) %
Peggy Bruzelius
– %
(75) %
– %
100 %
11 %
– %
Eva Castillo5
11 %
1050 %
– %
– %
11 %
100 %
Margaret Ewing6
(1) %
150 %
– %
33 %
11 %
100 %
Maurice Lam7
– %
156 %
– %
(25) %
107 %
500 %
Bruno Matheu8
100 %
100 %
– %
– %
– %
– %
Robin Phillips
– %
(17) %
– %
350 %
11 %
100 %
Emilio Saracho
– %
18 %
– %
– %
11 %
57 %
Nicola Shaw
– %
(100) %
– %
(67) %
14 %
100 %
All UK employees9,10
10 %
– %
30 %
6 %
– %
93 %
3 %
– %
(37) %
1
The comparison of fees for all directors in respect of 2021 and 2022, reflects a 10% COVID-19 related reduction operated for the full year in 2021.
2 Luis Gallego: An increase of 4% in basic salary for 2024 (below the average increase for the wider workforce). The comparison of 2021 vs 2022
reflects the first year since appointment in 2020 receiving full contractual salary and the first Annual Incentive Award since 2019.
3 The uplift in fees for Heather Ann McSharry between 2024 and 2023 reflects the increase in fee for chairing the Remuneration Committee. The
increase between 2022 and 2021 reflects her appointment as Senior Independent Director and Remuneration Committee Chair from June 2022.
4 Giles Agutter: stepped down from the Board in June 2024, and his fees reflect a part year of service.
5 Eva Castillo was appointed Chair of the Audit and Compliance Committee from 1 August 2024. The uplift in fees between 2024 and 2023 reflects
the increase in fee for chairing the Audit and Compliance Committee.
6 Margaret Ewing was Chair of the Audit and Compliance Committee until August 2024.
7 Maurice Lam: the comparison of 2021 vs 2022 reflects a part year of director service in 2021 versus a full year in 2022.
8 Bruno Matheu was appointed in June 2024.
9 The All UK employees 2023 and 2024 salary medians underlying the 10% uplift in median salary are taken from UK employee earnings published
in the 2024 CEO pay ratio section.
10 The reported change in the median value of all UK employee annual incentives from 2023 to 2024 (30%) reflects the strong financial performance
of the Group in the year.
Relative importance of spend on pay
The table below shows, for 2024 and 2023, total remuneration costs, operating profit before exceptional items and dividends
for the Company.
2024
2023
Total employee costs, IAG1
€6,356,000,000
€5,423,000,000
Total remuneration, directors (including non-executive directors)
€4,612,800
€4,678,000
IAG operating profit before exceptional items
€4,443,000,000
€3,507,000,000
Dividend declared
€147,000,000
–
Dividend proposed
€288,000,000
–
1
Total employee costs are before exceptional items.
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Sustainability Statement
Report of the Remuneration Committee continued
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150
Supplementary information – directors’ share options and shares
The following table details the nil-cost options over ordinary shares of the Company granted to the current IAG CEO under the
IAG PSP as at 31 December 2024:
Director
Date of grant
Number of
options at
1 January 2024
Exercise
price
Options
exercised
during the
year
Options
lapsed
during the
year
Options
granted
during the
year
Exercisable
from
Expiry date
Number of
options at
31 December 2024
Luis Gallego
May 2015
131,242
1,4290
131,242
–
–
1/1/2020
31/12/2024
–
March 2016
98,001
1,4290
98,001
–
–
1/1/2021
31/12/2025
–
March 2017
174,504
1,4290
174,504
–
–
1/1/2022
31/12/2026
–
Total nil-cost options over
ordinary shares
403,747
403,747
–
–
–
The value attributed to the Company’s ordinary shares in accordance with the Plan rules on the date of the PSP awards was 2017:
546 pence; 2016: 541 pence; and 2015: 550 pence.
The following table details the conditional awards over ordinary shares granted under the Restricted Share Plan (RSP) to
executive directors:
Director
Date of grant
Number of
conditional
shares granted
Vesting date
Shares lapsed
at vesting
due to
underpin
Holding period
expiry date
Number of
unvested
conditional
shares at 31
December 2024
Number of
vested
conditional
shares at 31
December 2024
Luis Gallego
June 2021
414,954
June 2024
–
June 2026
–
414,954
March 2022
581,907
March 2025
–
March 2027
581,907
–
October 2022
290,953
March 2025
–
March 2027
290,953
–
March 2023
835,751
March 2026
–
March 2028
835,751
–
March 2024
874,437
March 2027
–
March 2029
874,437
–
Total conditional
share awards (RSP)
2,998,002
2,583,048
414,954
RSP awards are subject to a discretionary underpin prior to vesting. This underpin review, performed by the Remuneration
Committee, considers the Company’s overall performance, including financial and non-financial performance measures, as well
as any material risk or regulatory failures identified. In the event of a significant failure on the part of the Company or the executive
director, malus and clawback provisions are available to the Remuneration Committee.
The value attributed to the Company’s ordinary shares in accordance with the Plan rules on the date of the RSP awards was 2024:
152 pence (2023: 153 pence, both awards in 2022: 141 pence and 2021: 198 pence).
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Incentive Award Deferral Plan (IADP)
Under the current Policy, if the IAG CEO has met the 350% shareholding guideline then 20% of any Annual Incentive Award for
executive directors is made in deferred shares under a plan called the Executive Share Plan (otherwise 50% is deferred into shares).
Under this Plan, incentive award shares are deferred for three years from date of grant. The following table details the current
executive director’s holdings of conditional awards over ordinary shares of the Company granted under the IAG IADP. Awards
are shown for the performance periods ended 31 December 2022 and 31 December 2023.
Executive director
Performance
year award
relates to1
Date of award
Number of
shares at 1
January
2024
Awards
released
during the
year
Date of vesting
Awards
lapsing
during
the year
Awards made
during the
year
Number of
unvested shares at
31 December 2024
Luis Gallego
2022
March 2023
447,341
–
March 2026
–
–
447,341
2023
March 2024
–
March 2027
–
464,685
464,685
Total
447,341
-
–
464,685
912,206
1
For the performance period ended 31 December 2024 the award is expected to be made in March 2025.
Under the Executive Share Plan rules an IADP award will not lapse on leaving employment before the vesting date unless
exceptional circumstances occur, such as gross misconduct, in which case the award would lapse in full. IADP awards are also
subject to the Remuneration Policy’s malus and clawback provisions.
The values attributed to the Company’s ordinary shares in accordance with the Plan rules for IADP awards (relating to the previous
year’s performance) were as follows: 2024 award: 152 pence and 2023 award: 153 pence.
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Financial
statements
Financial statements
154
Consolidated income statement
155
Consolidated statement of other
comprehensive income
156
Consolidated balance sheet
157
Consolidated cash flow statement
158
Consolidated statement of
changes in equity
160
Notes to the consolidated
financial statements
230
Alternative performance
measures
237
Group investments
Statement of Directors’
Responsibilities
Independent Auditor’s Report
Additional information
251
Glossary
253
Aircraft fleet
254
Operating and financial statistics
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Year to 31 December
€ million
Note
2024
2023
Passenger revenue
28,274
25,810
Cargo revenue
1,234
1,156
Other revenue
5
2,592
2,487
Total revenue
5
32,100
29,453
Employee costs
8
6,356
5,423
Fuel costs and emissions charges
6
7,608
7,557
Handling, catering and other operating costs
4,135
3,849
Landing fees and en-route charges
2,405
2,308
Engineering and other aircraft costs
2,729
2,509
Property, IT and other costs
6
1,120
1,058
Selling costs
1,082
1,155
Depreciation, amortisation and impairment
6
2,364
2,063
Net gain on sale of property, plant and equipment
(14)
(2)
Currency differences
32
26
Total expenditure on operations
27,817
25,946
Operating profit
4,283
3,507
Finance costs
9
(917)
(1,113)
Finance income
9
404
386
Net change in fair value of financial instruments
9
(237)
(11)
Net financing credit relating to pensions
9
63
103
Net currency retranslation (charges)/credits
(127)
176
Other non-operating credits
9
94
8
Total net non-operating costs
(720)
(451)
Profit before tax
3,563
3,056
Tax
10
(831)
(401)
Profit after tax for the year
2,732
2,655
Attributable to:
Equity holders of the parent
2,732
2,655
Non-controlling interest
–
–
2,732
2,655
Basic earnings per share (€ cents)
11
55.7
53.8
Diluted earnings per share (€ cents)
11
55.5
50.6
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Year to 31 December
€ million
Note
2024
2023
Items that may be reclassified subsequently to net profit
Cash flow hedges:
Fair value movements in equity
30d
53
(195)
Reclassified and reported in net profit
30d
69
(142)
Fair value movements on cost of hedging
33
24
(120)
Cost of hedging reclassified and reported in net profit
33
48
82
Currency translation differences
33
118
18
Items that will not be reclassified to net profit
Fair value movements on other equity investments
19
(19)
127
Fair value movements on liabilities attributable to credit risk changes
(44)
(119)
Remeasurements of post-employment benefit obligations
34
206
(1,076)
Remeasurements of long-term employee-related provisions
(70)
(18)
Total other comprehensive income/(loss) for the year, net of tax
385
(1,443)
Profit after tax for the year
2,732
2,655
Total comprehensive income for the year
3,117
1,212
Total comprehensive income is attributable to:
Equity holders of the parent
3,117
1,212
Non-controlling interest
33
–
–
3,117
1,212
Items in the Consolidated statement of other comprehensive income above are disclosed net of tax.
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€ million
Note
31 December
2024
31 December
20231,2
Non-current assets
Property, plant and equipment
13
21,132
19,776
Intangible assets1
17
3,642
3,332
Investments accounted for using the equity method
18
44
47
Other equity investments
19
190
188
Employee benefit assets
34
1,711
1,380
Derivative financial instruments
30
229
42
Deferred tax assets
10
754
1,202
Carbon-related and other non-current assets1
20
916
762
28,618
26,729
Current assets
Non-current assets held for sale
16
5
–
Inventories
21
617
494
Trade receivables
20
1,774
1,559
Carbon-related and other current assets1
20
2,336
1,821
Current tax receivable
10
231
159
Derivative financial instruments
30
395
81
Current interest-bearing deposits
22
1,639
1,396
Cash and cash equivalents
22
8,189
5,441
15,186
10,951
Total assets
43,804
37,680
Equity
Issued share capital
31
497
497
Share premium
31
7,770
7,770
Treasury shares
(287)
(100)
Other reserves
(1,810)
(4,895)
Total shareholders’ equity
6,170
3,272
Non-controlling interest
33
6
6
Total equity
6,176
3,278
Non-current liabilities
Borrowings2
26
13,870
13,105
Employee benefit obligations
34
135
175
Deferred tax liability
10
254
4
Provisions
27
3,302
2,831
Deferred revenue
24
203
257
Derivative financial instruments
30
102
106
Other long-term liabilities
25
401
219
18,267
16,697
Current liabilities
Borrowings2
26
3,475
2,977
Trade and other payables
23
6,149
5,590
Deferred revenue
24
8,333
7,766
Derivative financial instruments
30
194
461
Current tax payable
10
11
2
Provisions
27
1,199
909
19,361
17,705
Total liabilities
37,628
34,402
Total equity and liabilities
43,804
37,680
1
The 2023 results include a reclassification to conform with the current period presentation for Carbon-related assets. There is no impact on the total
assets or total liabilities of the Group. Further information is given in note 2.
2 The 2023 results include a reclassification to conform with the current period presentation of the convertible bond between non-current and current
Borrowings as a result of the revision to IAS 1 effective from 1 January 2024. Further information is given in note 2.
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Year to 31 December
€ million
Note
2024
20231
Cash flows from operating activities
Operating profit
4,283
3,507
Depreciation, amortisation and impairment
6
2,364
2,063
Net gain on disposal of property, plant and equipment
(14)
(2)
Employer contributions to pension schemes
(35)
(48)
Pension scheme service costs
34
20
18
Increase in provisions (excluding carbon-related obligations)1
35
282
25
Purchase of carbon-related assets net of the change in carbon-related obligations1
35
62
(50)
Unrealised currency differences
27
51
Other movements
35
107
111
Interest paid
(764)
(1,005)
Interest received
367
365
Tax paid
(245)
(291)
Net cash flows from operating activities before movements in working capital
6,454
4,744
Increase in trade receivables
(189)
(272)
Increase in inventories
(115)
(140)
Increase in other receivables and current assets (excluding carbon-related assets)1
(580)
(388)
Increase in trade payables
121
258
Increase in deferred revenue
336
212
Increase in other payables and current liabilities
345
188
Net movement in working capital
(82)
(142)
Net cash flows from operating activities
6,372
4,602
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets1
35
(2,816)
(3,282)
Sale of property, plant and equipment and intangible assets
584
1,080
Proceeds from sale of investments
–
11
Increase in other current interest-bearing deposits
(215)
(985)
Air Europa Holdings termination settlement payment2
(50)
–
Other investing movements
(5)
15
Net cash flows from investing activities
(2,502)
(3,161)
Cash flows from financing activities
Proceeds from borrowings
35
1,474
1,001
Repayment of borrowings
35
(410)
(4,268)
Repayment of lease liabilities
35
(1,737)
(1,731)
Settlement of derivative financial instruments
35
(151)
(119)
Acquisition of treasury shares
(202)
(77)
Dividend paid
(149)
–
Net cash flows from financing activities
(1,175)
(5,194)
Net increase/(decrease) in cash and cash equivalents
2,695
(3,753)
Net foreign exchange differences
53
(2)
Cash and cash equivalents at 1 January
5,441
9,196
Cash and cash equivalents at year end
22
8,189
5,441
Reconciliation to total cash, cash equivalents and other interest-bearing deposits
2024
2023
Cash and cash equivalents at year end
22
8,189
5,441
Interest-bearing deposits maturing after more than three months
22
1,639
1,396
Cash, cash equivalents and other interest-bearing deposits
22
9,828
6,837
1
The 2023 results include reclassifications to conform with the current period presentation for carbon-related assets. Further information is given in note 2.
2 Refer to note 3 for further information.
For details on restricted cash balances see note 22 Cash, cash equivalents and other current interest-bearing deposits.
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International Airlines Group | Annual Report and Accounts 2024
157
For the year to 31 December 2024
€ million
Issued
share
capital
(note 31)
Share
premium
(note 31)
Treasury
shares
(note 31)
Other
reserves
(note 33)
Retained
earnings
Total
shareholders’
equity
Non-
controlling
interest
(note 33)
Total
equity
1 January 2024
497
7,770
(100)
(1,996) (2,899)
3,272
6
3,278
Profit for the year
–
–
–
–
2,732
2,732
–
2,732
Other comprehensive income for the year
Cash flow hedges reclassified and reported
in net profit:
Fuel costs and emissions charges
–
–
–
93
–
93
–
93
Currency differences
–
–
–
3
–
3
–
3
Finance costs
–
–
–
(11)
–
(11)
–
(11)
Ineffectiveness recognised in other non-
operating costs
–
–
–
(16)
–
(16)
–
(16)
Net change in fair value of cash flow
hedges
–
–
–
53
–
53
–
53
Net change in fair value of equity
investments
–
–
–
(19)
–
(19)
–
(19)
Net change in fair value of cost of hedging
–
–
–
24
–
24
–
24
Cost of hedging reclassified and reported in
net profit
–
–
–
48
–
48
–
48
Fair value movements on liabilities
attributable to credit risk changes
–
–
–
(44)
–
(44)
–
(44)
Currency translation differences
–
–
–
118
–
118
–
118
Remeasurements of post-employment
benefit obligations
–
–
–
–
206
206
–
206
Remeasurements of long-term employee-
related provisions
–
–
–
–
(70)
(70)
–
(70)
Total comprehensive income for the year
–
–
–
249
2,868
3,117
–
3,117
Hedges transferred and reported in
property, plant and equipment
–
–
–
(11)
–
(11)
–
(11)
Hedges transferred and reported in sales in
advance of carriage
–
–
–
60
–
60
–
60
Hedges transferred and reported in
inventory
–
–
–
10
–
10
–
10
Cost of share-based payments
–
–
–
–
90
90
–
90
Vesting of share-based payment schemes
–
–
24
–
(32)
(8)
–
(8)
Acquisition of treasury shares
–
–
(211)
–
–
(211)
–
(211)
Dividend
–
–
–
–
(147)
(147)
–
(147)
Dividend of a subsidiary
–
–
–
–
(2)
(2)
–
(2)
31 December 2024
497
7,770
(287)
(1,688)
(122)
6,170
6
6,176
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International Airlines Group | Annual Report and Accounts 2024
158
For the year to 31 December 2023
€ million
Issued
share
capital
(note 31)
Share
premium
(note 31)
Treasury
shares
(note 31)
Other
reserves
(note 33)
Retained
earnings
Total
shareholders’
equity
Non-
controlling
interest
(note 33)
Total
equity
1 January 2023
497
7,770
(28)
(1,717)
(4,506)
2,016
6
2,022
Profit for the year
–
–
–
–
2,655
2,655
–
2,655
Other comprehensive income for the year
Cash flow hedges reclassified and
reported in net profit:
Fuel costs and emissions charges
–
–
–
(81)
–
(81)
–
(81)
Currency differences
–
–
–
(20)
–
(20)
–
(20)
Finance costs
–
–
–
(35)
–
(35)
–
(35)
Ineffectiveness recognised in other
non-operating costs
–
–
–
(6)
–
(6)
–
(6)
Net change in fair value of cash flow
hedges
–
–
–
(195)
–
(195)
–
(195)
Net change in fair value of equity
investments
–
–
–
127
–
127
–
127
Net change in fair value of cost of
hedging
–
–
–
(120)
–
(120)
–
(120)
Cost of hedging reclassified and reported
in net profit
–
–
–
82
–
82
–
82
Fair value movements on liabilities
attributable to credit risk changes
–
–
–
(119)
–
(119)
–
(119)
Currency translation differences
–
–
–
18
–
18
–
18
Remeasurements of post-employment
benefit obligations
–
–
–
–
(1,076)
(1,076)
–
(1,076)
Remeasurements of long-term employee-
related provisions
–
–
–
–
(18)
(18)
–
(18)
Total comprehensive income for the year
–
–
–
(349)
1,561
1,212
–
1,212
Hedges transferred and reported in
property, plant and equipment
–
–
–
(6)
–
(6)
–
(6)
Hedges transferred and reported in sales
in advance of carriage
–
–
–
85
–
85
–
85
Hedges transferred and reported in
inventory
–
–
–
(9)
–
(9)
–
(9)
Cost of share-based payments
–
–
–
–
52
52
–
52
Vesting of share-based payment schemes
–
–
5
–
(6)
(1)
–
(1)
Acquisition of treasury shares
–
–
(77)
–
–
(77)
–
(77)
31 December 2023
497
7,770
(100)
(1,996)
(2,899)
3,272
6
3,278
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Consolidated statement of changes in equity
International Airlines Group | Annual Report and Accounts 2024
159
1 Background and general information
International Consolidated Airlines Group, S.A. (hereinafter ‘International Airlines Group’, ‘IAG’ or ‘the Group’) is a leading European
airline group, formed to hold the interests of airline and ancillary operations. IAG (hereinafter the ‘Company’) is a Spanish company
registered in Madrid, incorporated on 17 December 2009. The registered address of IAG is El Caserío, Zona industrial 2, Camino de
La Muñoza s/n, 28042, Madrid, Spain. On 21 January 2011, British Airways Plc and Iberia Líneas Aéreas de España S.A. Operadora
(hereinafter ‘British Airways’ and ‘Iberia’, respectively) completed a merger transaction becoming the first two airlines of the Group.
Vueling Airlines S.A. (‘Vueling’) was acquired on 26 April 2013 and Aer Lingus Group Plc (‘Aer Lingus’) on 18 August 2015. A list
of the subsidiaries of the Group is included in the Group investments section.
IAG shares are traded on the London Stock Exchange’s main market for listed securities and also on the stock exchanges of Madrid,
Barcelona, Bilbao and Valencia (the ‘Spanish stock exchanges’), through the Spanish Stock Exchanges Interconnection System
(Mercado Continuo Español).
2 Significant accounting policies
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with the International Financial Reporting
Standards as endorsed by the European Union (IFRSs as endorsed by the EU). The consolidated financial statements are rounded to
the nearest million unless otherwise stated. These financial statements have been prepared on a historical cost convention except for
certain financial assets and liabilities, including employee benefit assets and liabilities, the €825 million convertible bond due 2028,
derivative financial instruments and other equity investments that are measured at fair value. The primary statements and notes to
the financial statements for the prior year include reclassifications that were made to conform to the current year presentation.
The Group’s financial statements for the year to 31 December 2024 were authorised for issue and approved by the Board of
Directors on 27 February 2025.
Change in presentation of results
Carbon-related assets and carbon-related obligations
During the course of 2024, with the increased prominence of Emission Trading Systems/Schemes (ETS) and the introduction of the
Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) from 1 January 2024, the Group has elected to make
a number of amendments to its presentation and disclosure of the Group’s emissions assets and obligations:
• Purchased emission allowances, previously presented within Intangible assets, have been reclassified to Carbon-related and other
assets, to reflect their operating nature;
• Those purchased emission allowances expected to be extinguished or retired within 12 months of the balance sheet date have now
been classified within current assets; and
• The associated presentation within the Cash flow statement of these purchased emission allowances has been reclassified from
Acquisition of property, plant and equipment and intangible assets within Net cash flows from investing activities, to a separate
line item within Net cash flows from operating activities. This reclassification aligns with the recognition of such expenses within
Operating profit in the Income statement.
The disaggregation between emission schemes, for both the associated assets and obligations, is presented in note 4.
These changes have resulted in the Balance sheet at 31 December 2023 and Cash flow statement for the year to 31 December 2023
being updated to conform with the current year presentation. Refer to note 37 for further details.
Balance sheet – presentation of convertible bond
On 31 October 2022, the IASB issued the amendments to IAS 1 – Classification of liabilities as current or non-current (‘the Amendments’),
which the Group has adopted from 1 January 2024. The Amendments require the €825 million convertible bond that matures in 2028 to
be reclassified from a non-current liability to a current liability with the comparative presentation at 31 December 2023 also reclassified.
The Amendments require that where the conversion feature of a convertible instrument does not meet the recognition criteria for
separate presentation within equity, and where the associated bondholders have the irrevocable right to exercise the conversion
feature within 12 months of the balance sheet date, such convertible instruments be presented as current.
As a result, the prior year Balance sheet includes a reclassification to conform with the current year presentation of non-current and
current Borrowings. Refer to note 37 for further details.
Going concern
At 31 December 2024, the Group had total liquidity of €13,362 million (31 December 2023: total liquidity of €11,624 million),
comprising cash, cash equivalents and interest-bearing deposits of €9,828 million, €3,400 million of committed and undrawn general
facilities and a further €134 million of committed and undrawn aircraft specific facilities. At 31 December 2024, the Group has no
financial covenants associated with its loans and borrowings.
In its assessment of going concern, the Group has modelled two scenarios referred to below as the Base Case and the Downside
Case over the period of at least 12 months from the date of the approval of these consolidated financial statements (the ‘going
concern period’). The Group’s three-year business plan, used in the creation of the Base Case, was prepared for and approved by
the Board in December 2024. The business plan takes into account the Board’s and management’s views on capacity, based on the
potential impact of the wider economic and geopolitical environments on the Group’s businesses across the going concern period.
The key inputs and assumptions underlying the Base Case through to 31 March 2026, include:
• the Group has assumed that the committed and undrawn general facilities of €3,400 million will not be drawn over the going concern
period. The availability of certain of these facilities reduces over time, with €2,193 million being available to the Group at 31 March 2026;
• the Group has assumed that the undrawn committed aircraft facilities of €134 million, relating to specific aircraft financing
structures, will be utilised over the going concern period;
• of the capital commitments detailed in note 15, €2,651 million is due to be paid over the period to 31 March 2026;
• the Group has assumed that the €500 million bond that matures in March 2025 will not be refinanced;
• the Group has incorporated the redemption, as detailed in note 38, prior to maturity, of €577 million from the €500 million 2027
bond and the €700 million 2029 bond;
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International Airlines Group | Annual Report and Accounts 2024
160
• while the Group does not expect to finance all expected deliveries over the going concern period, for those it does expect to
finance, it has forecast securing 100%, or €1,001 million, of the aircraft financing that is currently uncommitted, to align with the
timing and payments for those aircraft deliveries it expects to finance, including aircraft delivered in 2024 that had not had their
financing secured at the balance sheet date;
• the payment by IAG Loyalty and the recovery by British Airways, of €673 million and €260 million, respectively, of VAT to HMRC
in the UK in order to appeal HMRC’s view on the appropriate accounting to apply (further information in given in note 10g); and
• the shareholder returns detailed in note 38.
The Downside Case applies stress to the Base Case to model adverse commercial and operational impacts over the going concern
period, represented by: reduced levels of capacity operated in each month, including reductions of 25% for three months over the
going concern period; reduced passenger unit revenue per available seat kilometre (ASK); increases in the price of jet fuel by 20%
above that assumed in the Base Case; and increased operational costs. In the Downside Case, over the going concern period,
capacity would be 10% down when compared to the Base Case. The Downside Case assumes that British Airways and Iberia would
be required to partially draw down their portions of the available US dollar Revolving Credit Facility (further information given
in notes 3 and 29f). The directors consider the Downside Case to be a severe but plausible scenario.
Having reviewed the Base Case and the Downside Case, the directors have a reasonable expectation that the Group has sufficient liquidity
to continue in operational existence for a period of at least 12 months from the date of approval of the consolidated financial statements
and hence continue to adopt the going concern basis in preparing the consolidated financial statements at 31 December 2024.
Consolidation
The consolidated financial statements include the financial statements of the Company and its subsidiaries, each made up to 31
December together with the attributable share of results and reserves of associates and joint ventures, adjusted where appropriate
to conform to the Group’s accounting policies.
Subsidiaries are consolidated from the date of their acquisition, which is the date on which the Group obtains control and continues
to be consolidated until the date that such control ceases. Control exists when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The Group applies the acquisition method to account for business combinations. The consideration paid is the fair value of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. Identifiable assets acquired and liabilities assumed
in a business combination are measured initially at their fair values at the acquisition date. Non-controlling interests represent the
portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented separately within equity
in the Consolidated balance sheet. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, as at the acquisition date, the acquirer’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date through the Income statement.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling
interest over the net identifiable assets acquired and liabilities assumed.
All intragroup account balances, including intragroup profits, are eliminated in preparing the consolidated financial statements.
Unconsolidated structured entities
The Group regularly uses sale and leaseback transactions to finance the acquisition of aircraft. In certain instances, the Group will
undertake several such sale and leaseback transactions at once through Enhanced Equipment Trust Certificates (EETCs). Under
each of these financing structures, a company or companies (the EETC Issuer) are established to facilitate such financing on behalf
of a number of unrelated investors. In certain of these financing structures, additional special purpose vehicles (the Lessor SPV)
are established to provide additional financing from a number of further unrelated investors to the EETC Issuer. The proceeds from
the issuance of the EETCs by the EETC Issuer, and where relevant the proceeds obtained from the Lessor SPV, are then used to
purchase aircraft solely from the Group. The Group will then enter into fixed rate lease arrangements (which meet the recognition
criteria of Asset financed liabilities) with the EETC Issuer, or where relevant the Lessor SPV, with payments made by the Group
to the EETC Issuer, or the Lessor SPV, distributed, through a trust, to the aforementioned unrelated investors. The main purpose
of the trust structure is to enhance the credit-worthiness of the Group’s debt obligations through certain bankruptcy protection
provisions and liquidity facilities, and also to lower the Group’s total borrowing cost.
The EETC Issuer and the Lessor SPV are established solely with the purpose of providing the asset-backed financing and upon
maturity of such financing are expected to have no further activity. The relevant activities of the EETC Issuer and the Lessor SPV
are restricted to pre-established financing agreements and the retention of the title of the associated financed aircraft. Accordingly,
the Group has determined that each EETC Issuer and the Lessor SPVs are structured entities. Under the contractual terms of the
financing structures, the Group has no exposure to losses in these entities, does not own any of the share capital of the EETC Issuer
or the Lessor SPV, does not have any representation on the respective boards and has no ability to influence decision-making.
In addition to the above, such financial transactions expose the Group to no further significant financial or economic risks, such
as no variability over time in interest rates.
In considering the aforementioned facts, management has concluded that the Group does not have access to variable returns from
the EETC Issuers and Lessor SPVs because its involvement is limited to the payment of principal and interest under the arrangement
and, therefore, it does not control the EETC Issuers or the Lessor SPVs and as such does not consolidate them.
Further information as to the financial impact of these financial transactions is given in note 26.
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161
Joint Business Agreements
The Group has established various contractual joint arrangements with carriers outside of the Group, commonly referred to as Joint
Business Agreements, that enable the Group and those carriers involved to cooperate on flights between particular destinations and
the sharing of the resultant revenues. These Joint Business Agreements are not structured through separate legal entities. Each such
arrangement includes a reference year to which the carriers party to that arrangement determine their share of the total revenues
generated on the aforementioned flights within a fiscal year. The resultant impact of the revenue shared is presented net within
Passenger revenue in the Income statement.
Segmental reporting
Operating segments are reported in a manner consistent with how resource allocation decisions are made by the chief operating
decision-maker. The chief operating decision-maker, who is responsible for resource allocation and assessing performance of
the operating segments, has been identified as the IAG Management Committee.
Foreign currency translation
a Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the functional currency, being the
currency of the primary economic environment in which the entity operates. In particular, British Airways and IAG Loyalty have
a functional currency of pound sterling. The Group’s consolidated financial statements are presented in euros, which is the Group’s
presentation currency.
b Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency using the rate of exchange prevailing on the date
of the transaction. Monetary foreign currency balances are translated into the functional currency at the rates ruling at the balance
sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at balance
sheet exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income statement,
except where hedge accounting is applied. Foreign exchange gains and losses arising on the retranslation of monetary assets and
liabilities classified as non-current on the Balance sheet are recognised within Net currency retranslation (charges)/credits in the Income
statement. All other gains and losses arising on the retranslation of monetary assets and liabilities are recognised in operating profit.
c Group companies
The net assets of foreign operations are translated into euros at the rate of exchange ruling at the balance sheet date. Profits and
losses of such operations are translated into euros at average rates of exchange during the year. The resulting exchange differences
are taken directly to a separate component of equity, the Currency translation reserve, until all or part of the interest is sold, when
the relevant portion of the cumulative exchange difference is recognised in the Income statement.
Property, plant and equipment
Property, plant and equipment are held at cost. The Group has a policy of not revaluing property, plant and equipment. Depreciation
is calculated to write off the cost less the estimated residual value on a straight-line basis, over the economic life of the asset.
Residual values, where applicable, are reviewed annually against prevailing market values for equivalently aged assets and
depreciation rates adjusted accordingly on a prospective basis.
a Fleet
All aircraft are stated at the fair value of the consideration given after taking account of manufacturers’ credits and pre-delivery instalment
payments (referred to as progress payments). Fleet assets owned or right of use (ROU) assets are disaggregated into separate
components and depreciated at rates calculated to write down the cost of each component to the estimated residual value at the
end of their planned operational lives (which is the shorter of their useful life or lease term) on a straight-line basis. Depreciation
rates are specific to aircraft type, based on the Group’s fleet plans, within overall parameters of 23 years and up to 5% residual value
for short-haul aircraft and between 23 and 29 years (depending on aircraft) and up to 5% residual value for long-haul aircraft.
ROU assets are depreciated over the shorter of the lease term and the aforementioned depreciation rates. Where the lease includes
a purchase option, at the discretion of the Group, and it is expected that the purchase option will be exercised, the associated right
of use asset is depreciated using the aforementioned depreciation rates to reflect the reasonably certain life of the aircraft,
irrespective of the lease term.
Cabin interior modifications, including those required for brand changes and relaunches, are depreciated over the lower of 12 years
and the remaining economic life of the aircraft, whether owned or leased.
Spare parts for aircraft and engines acquired on the introduction or expansion of a fleet, as well as rotable spares purchased
separately, are carried as property, plant and equipment and generally depreciated in line with the fleet to which they relate.
b Other property, plant and equipment
Owned property, with the exception of freehold land, is depreciated over its expected useful life over periods not exceeding 50
years on a straight-line basis. Right of use assets arising from leasehold properties are depreciated over the lease term on a straight-
line basis. Equipment is depreciated over periods ranging from four to 20 years on a straight-line basis.
c Capitalisation of interest on assets under construction
Interest costs attributed to progress payments made on account of aircraft and other qualifying assets under construction are
capitalised and added to the cost of the asset concerned. All other borrowing costs are recognised in the Income statement in the
year in which they are incurred.
d Liquidated damages
Certain of the Group’s contractual arrangements with aircraft and engine manufacturers contain liquidated damage clauses, whereby if the
supplier breaches one or more contractual clauses (such as delays in the timing of delivery of an aircraft or engine) then damages are payable
to the Group. Liquidated damages are recognised in the Income statement only to the extent that they relate to compensation for loss of
income and/or incremental operating costs, when a contractual entitlement exists, the amounts can be reliably measured and the receipt
is virtually certain. When liquidated damages do not relate to compensation for loss of income and/or incremental operating costs, the
amounts are recorded as a reduction in the cost of the associated aircraft in the Balance sheet and depreciated over the life of the aircraft.
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International Airlines Group | Annual Report and Accounts 2024
162
When compensation, not related to the loss of income and/or incremental operating costs, is received in advance of the associated
delivery of the aircraft and/or engine, the Group recognises the amount within Other creditors until such time as the aircraft and/or
engine is delivered, at which time the amounts are transferred and recorded as a reduction in the cost of the associated asset. Such
compensation is recorded in the Cash flow statement within cash flows from investing activities under the caption of Acquisition
of property, plant and equipment and intangible assets.
e Leases
The Group leases various aircraft, properties, equipment and other assets. The lease terms of these assets are consistent with the
determined useful economic life of similar assets within property, plant and equipment.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified tangible asset for a period in exchange for consideration. The Group
has elected not to apply such consideration where the contract relates to an intangible asset, such as for landing rights or IT
software, in which case payments associated with the contract are expensed as incurred.
Leases are recognised as a lease liability and a corresponding ROU asset at the date at which the leased asset is available for use
by the Group.
Lease liabilities
Lease liabilities are initially measured at their present value, which includes the following lease payments: fixed payments (including
in-substance fixed payments), less any lease incentives receivable; variable lease payments that are based on an index or a rate;
amounts expected to be payable by the Group under residual value guarantees; the exercise price of a purchase option if the Group
is reasonably certain to exercise that option; payments of penalties for terminating the lease, if the lease term reflects the Group
exercising that option; and payments to be made under reasonably certain extension options.
Aircraft lease payments are discounted using the interest rate implicit in the lease. The interest rate implicit in the lease is the
discount rate that, at the inception of the lease, causes the aggregate present value of the minimum lease payments and the
unguaranteed residual value to be equal to the fair value of the leased asset and any initial indirect costs of the lessor. For aircraft
leases these inputs are either generally observable in the contract or readily available from external market data. The initial direct
costs of the lessor are considered to be immaterial. If the interest rate implicit in the lease cannot be determined, the Group entity’s
incremental borrowing rates are used.
Each lease payment is allocated between the principal and finance cost. The finance cost is charged to the Income statement over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the lease liability for each period.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the
lease payments made.
The carrying amount of lease liabilities is remeasured if there is a modification of the lease contract, a re-assessment of the lease
term (specifically in regard to assumptions regarding extension and termination options) or changes in variable lease payments that
are based on an index or a rate.
Right of use assets
At the lease commencement date, an ROU asset is measured at cost comprising the following: the amount of the initial
measurement of the lease liability; any lease payments made at or before the commencement date less any lease incentives
received; and any initial direct costs.
In addition, at the lease commencement date, the ROU asset will incorporate those restoration and handback costs that are considered
unavoidable, such as the removal of airline-specific branding and configuration, to return the asset to its original condition, for which
a corresponding amount is recognised within Provisions. The ROU asset is depreciated over the shorter of the asset’s useful life and
the lease term on a straight-line basis. If ownership of the ROU asset transfers to the Group at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Amounts excluded from recognition as ROU assets and lease liabilities
The Group has elected not to recognise ROU assets and lease liabilities for short-term leases that have a lease term of 12 months
or less (and where that short-term lease is not expected to be renewed) and those leases of low-value assets. Short-term leases are
leases with a lease term of 12 months or less that do not contain a purchase option. Low-value assets comprise specific IT equipment
and office furniture. Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line
basis as an expense in the Income statement.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in
the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability
is re-assessed and adjusted against the ROU asset. Such variable lease payments are expensed to the Income statement as incurred.
Extension options are included in a number of aircraft, property and equipment leases across the Group and are reflected in the
lease liability where the Group is reasonably certain that it will exercise the option.
Sale and leaseback transactions
The Group regularly uses sale and leaseback transactions to finance the acquisition of aircraft. Each transaction is assessed as to
whether it meets the criteria within IFRS 15 ‘Revenue from contracts with customers’ for a sale to have occurred. The principal
criterion for assessing whether a sale has occurred or not, is whether the contract contains the option, at the discretion of the Group,
to repurchase the aircraft during or at the end of the lease term. If such a repurchase option exists in the contract, irrespective of
whether the Group intends to exercise the option or not, the sale is deemed not to have occurred. Where there is no repurchase
option in such a transaction, then a sale is deemed to have occurred. The following defines the accounting for such transactions:
• if a sale is determined to have occurred, then the associated asset is de-recognised and an ROU asset and lease liability are
recognised. The ROU asset recognised is based on the proportion of the previous carrying amount of the asset that is retained.
Any gain or loss is restricted to the amount that relates to the rights that have been transferred to the counterparty to the
transaction; and
• where a sale is determined to have not occurred, the asset is retained on the Balance sheet within Property, plant and equipment
and an Asset financed liability recognised equal to the financing proceeds.
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Cash flow presentation – lease liabilities
Payments associated with lease liabilities are presented as follows in the Consolidated cash flow statement:
• where the proceeds received from sale and leaseback transactions represent the fair value of the asset being transferred, the total
proceeds are presented within cash flows from investing activities. Where the proceeds received from sale and leaseback
transactions exceed the fair value of the asset being transferred, the element of the proceeds equivalent to the fair value of the
asset being transferred is presented within investing activities and the amount of proceeds in excess of the fair value is presented
within financing activities;
• the repayments of the principal element of lease liabilities are presented within cash flows from financing activities;
• the payments of the interest element of lease liabilities are included within cash flows from operating activities;
• the payments arising from variable elements of a lease, short-term leases and low-value assets are presented within cash flows
from operating activities; and
• the non-cash gain or loss arising from sale and leaseback transactions is presented within cash flows from operating activities.
Cash flow presentation – asset financed liabilities
Payments associated with asset financed liabilities are presented as follows in the Consolidated cash flow statement:
• the proceeds received from asset financed liabilities are presented within cash flows from financing activities;
• the repayments of the principal element of asset financed liabilities are presented within cash flows from financing activities; and
• the payments of the interest element of asset financed liabilities are included within cash flows from operating activities.
Lessor accounting
From time to time the Group will lease, to third parties, specific assets, including certain property, plant and equipment. On inception
of the lease, the Group determines whether each lease is a finance lease or an operating lease.
In order to make this determination, the Group assesses whether the lease transfers substantially all of the risks and rewards of
ownership to the lessee. Factors in making this assessment include, but are not limited to, whether the lease term is for the major
part of the economic life of the underlying asset and whether the underlying asset transfers to the lessee or the lessee has the option
to purchase the underlying asset at the end of the lease. Where substantially all of the risks and rewards of ownership have been
transferred, then the lease is recorded as a finance lease, otherwise it is recorded as an operating lease.
f Maintenance, repairs and overhaul
Owned aircraft
Major maintenance, repairs and overhaul expenditure, including replacement spares and labour costs for airframes and engines,
is capitalised and amortised over the expected life between major maintenance, repairs and overhauls or to the end of the useful
life of the asset.
On initial recognition of an aircraft, a component of such costs is attributed to the embedded heavy maintenance component
of the assets, such as the engines. The embedded heavy maintenance component is depreciated over the period to the next major
maintenance event.
All other replacement spares and other costs relating to maintenance of owned fleet assets are charged to the Income statement
on consumption or as incurred, respectively, recognised within Engineering and other aircraft costs.
Leased aircraft
Under each lease agreement, the Group is contractually committed to either return the airframe, engines and certain other assets
in a specified condition or to compensate the lessor based on the conditionality of the aforementioned assets at the point of return
to the lessor.
Accordingly, the Group records a provision for major maintenance, repair and overhaul events, including for airframes and engines,
that occur through usage or through the passage of time, that is recognised as such activity occurs through to the next such
maintenance event. A corresponding expense is recorded in the Income statement within Engineering and other aircraft costs over
the relevant period as the provision is accumulated. Any subsequent changes in estimation are recognised in the Income statement.
When the maintenance, repair or overhaul event occurs, the associated provision is de-recognised.
Restoration and handback obligations that arise on the inception of the lease, and that are not dependent on the usage of the asset
or on the passage of time, are recognised as a provision for the full expected cost of discharging those obligations with a
corresponding amount recognised as a separate component of the ROU asset. The associated ROU asset is depreciated over the
lease term. Any subsequent change in estimation relating to such costs are reflected in both the provision and the ROU asset, with
the adjustment to the ROU asset depreciated over the remaining lease term.
All other replacement spares and other costs relating to maintenance of leased fleet assets are charged to the Income statement
on consumption or as incurred, respectively, within Engineering and other aircraft costs.
Power by the hour contracts
Certain of the Group’s maintenance contracts, for both owned and leased aircraft, transfer the risk and legal obligation for
undertaking the maintenance activity to third-party service providers, with the Group paying the service providers based on the
usage of the asset. The associated usage of the asset gives rise to a charge, as flight hours are incurred and dependent on the
number of take offs and landings, in the Income statement within Engineering and other aircraft costs.
Intangible assets
a Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration paid
over the net fair value of the identifiable assets and liabilities of the acquiree. Where the net fair value of the identifiable assets and
liabilities of the acquiree is in excess of the consideration paid, a gain on bargain purchase is recognised immediately in the Income
statement.
For the purpose of assessing impairment, goodwill is grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units). Goodwill is tested for impairment annually and whenever indicators exist that the carrying value may
not be recoverable.
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b Brands
Brands arising on the acquisition of subsidiaries are initially recognised at fair value at the acquisition date. Long established brands
that are expected to be used indefinitely are not amortised but assessed annually for impairment.
c Customer loyalty programmes
Customer loyalty programmes arising on the acquisition of subsidiaries are initially recognised at fair value at the acquisition date.
A customer loyalty programme with an expected useful life is amortised over the expected remaining useful life. Established
customer loyalty programmes that are expected to be used indefinitely are not amortised but assessed annually for impairment.
d Landing rights
Landing rights acquired in a business combination are recognised at fair value at the acquisition date. Landing rights acquired from
other airlines are capitalised at cost.
Capitalised landing rights based outside of the UK and the EU are amortised on a straight-line basis over a period not exceeding
20 years. Capitalised landing rights based within the UK and the EU are not amortised, as regulations provide that these landing
rights are perpetual.
e Contract-based intangibles
Contract-based intangibles acquired in a business combination are recognised initially at fair value at the acquisition date and
amortised over the remaining life of the contract.
f Software
The cost to purchase or develop computer software that is separable from an item of related hardware is capitalised separately
and amortised on a straight-line basis, generally over a period not exceeding five years, with certain specific software developments
amortised over a period of up to ten years.
In certain instances, the Group enters into cloud computing arrangements with third-party providers, such as software as a service
(SaaS), where the Group is provided the right to access and use the application software over the contract term. At inception of the
contract, the Group will assess whether such an arrangement gives rise to the recognition of a software intangible asset.
Where the Group determines that no software intangible asset should be recognised, the cloud computing arrangement is
determined to be a service contract and the associated fees paid are expensed as incurred. In addition, the costs incurred for both
the customisation and configuration of the application software are generally expensed as incurred.
g Carbon-related assets and obligations
Held for own use
As an operating company emits CO2 equivalent, it builds up either an ETS obligation, a CORSIA obligation or a voluntary carbon
offset obligation to the relevant authorities. Where an operating company purchases ETS emission allowances, CORSIA emission
units and voluntary carbon offset units, these amounts are recognised at cost and recorded within Carbon-related and other assets.
Carbon-related assets are not revalued or amortised but are tested for impairment whenever indicators exist that the carrying value
may not be recoverable. For those obligations arising for which the operating company has purchased emission allowances or emission
units to offset emissions, the obligation is recognised at the weighted average cost of the carbon-related asset. For those obligations
arising for which the operating company has not yet purchased emission allowances or emission units to offset the emissions, the
obligation is recognised at the market price of the emission allowances or emission units required at the balance sheet date. As the
obligation is recognised, a corresponding amount is recorded in the Income statement within Fuel costs and emission charges.
The Group’s emissions obligations, recognised as Carbon-related obligations within Provisions, are extinguished when the associated
emission certificates are surrendered or retired to the relevant authorities. For ETS obligations, the timing of surrender of the
allowances is typically within 12 months of the balance sheet date. For CORSIA obligations, the timing of retirement of the
allowances is once every three years, with the first such retiring event for the 2024 to 2026 compliance period expected in 2028
(although entities can agree with their relevant authorities to retire emission units earlier).
From time to time, the Group enters into sale and repurchase transactions for specified emission allowances. Such transactions do
not meet the recognition criteria of a sale under IFRS 15 and accordingly the emissions asset is retained on the Balance sheet within
Carbon-related assets and an Other financing liability recognised equal to the proceeds received.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the value by which the asset’s carrying value exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value-in-use. Non-financial assets other
than goodwill that were subject to an impairment are reviewed for possible reversal of the impairment at each balance sheet date.
a Property, plant and equipment, including Right of use assets
The carrying value is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be
recoverable and the cumulative impairment losses are shown as a reduction in the carrying value of property, plant and equipment.
b Intangible assets
Intangible assets are held at cost and are either amortised on a straight-line basis over their economic life, or they are deemed to
have an indefinite economic life and are not amortised. Indefinite life intangible assets are tested annually for impairment or more
frequently if events or changes in circumstances indicate the carrying value may not be recoverable.
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Investments in associates and joint ventures
An associate is an undertaking in which the Group has a long-term equity interest and over which it has the power to exercise
significant influence. Where the Group cannot exercise control over an entity in which it has a shareholding greater than 51%,
the equity interest is treated as an associate undertaking.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only
when decisions about the relevant activities require unanimous consent of the parties sharing control. The considerations made
in determining significant influence or joint control are similar to those necessary to determine control over subsidiaries.
Investments in associates and joint ventures are accounted for using the equity method and initially recognised at cost. The Group’s
interest in the net assets of associates and joint ventures is included in Investments accounted for using the equity method in the
Balance sheet and its interest in their results is included in the Income statement, below operating result. The attributable results
of those companies acquired or disposed of during the year are included for the periods of ownership.
Financial instruments
a Financial assets and liabilities
Financial assets and financial liabilities are classified, upon initial recognition, as measured at amortised cost, at fair value through
other comprehensive income (OCI) or fair value through profit or loss. Financial assets are not reclassified subsequent to their initial
recognition unless the Group changes its business model for managing financial assets.
The classification of financial assets at initial recognition depends on the financial assets’ contractual cash flow characteristics and
the Group’s business model for managing them.
In order for a financial asset to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash
flows that are ‘solely payments of principal and interest’ (SPPI) on the principal amount outstanding. A financial asset that is not SPPI
is classified and measured at fair value through profit or loss. This assessment is performed on an instrument by instrument basis.
The Group’s business model for managing financial assets establishes how it manages its financial assets in order to generate cash
flows. The business model determines whether cash flows will result from collecting contractual cash flows, selling the financial
assets, or both. Financial assets classified and measured at amortised cost are held within a business model with the objective to
hold financial assets in order to collect contractual cash flows, while financial assets classified and measured at fair value through
OCI are held within a business model with the objective of both collecting contractual cash flows and selling financial assets.
Long-term borrowings
Long-term borrowings are recorded at amortised cost.
Convertible debt
Convertible bonds are classified as either compound financial instruments or hybrid financial instruments depending on the
settlement alternatives upon redemption. Where the bondholders exercise their equity conversion options and the Group has no
alternative other than to settle the convertible bonds into a fixed number of ordinary shares of the Company, then the bonds are
classified as a compound financial instrument. Where the Group has an alternative settlement mechanism to the convertible bonds
that permits settlement in cash, then the convertible instrument is classified as a hybrid financial instrument.
Convertible bonds that are classified as compound financial instruments consist of a liability and an equity component. At the date
of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible
debt, and is subsequently recorded on an amortised cost basis using the effective interest method until extinguished on conversion
or maturity of the bonds, and is recognised within Borrowings. The difference between the proceeds of issue of the convertible bond
and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the
Group, is included in the equity portion of the convertible bond in Other reserves and is not subsequently remeasured. The interest
expense on the liability component is calculated by applying the effective interest rate for similar non-convertible debt to the liability
component of the instrument. The difference between this value and the interest paid is added to the carrying amount of the liability.
Convertible bonds that are classified as hybrid financial instruments consist only of a liability component recognised within
Borrowings. At the date of issue, the entirety of the convertible bonds are accounted for at fair value with subsequent fair value
gains or losses recorded within Borrowings. The fair value of such financial instruments is obtained from their respective quoted
prices in active markets, with the portion of the change in fair value attributable to changes in the credit risk of the convertible
bonds recognised in Other comprehensive income and the portion of the change in fair value attributable to market conditions
recognised in the Income statement within Finance costs.
Issue costs associated with compound financial instruments are apportioned between the liability and equity components of the
convertible bonds where appropriate based on their relative carrying values at the date of issue. The portion relating to the equity
component is charged directly against equity. Issue costs associated with hybrid financial instruments are expensed immediately
to the Income statement.
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Other equity investments
Other equity investments are non-derivative financial assets including listed and unlisted investments, excluding interests in
associates and joint ventures. On initial recognition, these equity investments are irrevocably designated as measured at fair value
through Other comprehensive income. They are subsequently measured at fair value, with changes in fair value recognised in Other
comprehensive income with no recycling of these gains and losses to the Income statement when the investment is sold or a change
in the structure of the transaction changes its classification as an Other equity instrument. Dividends received on other equity
investments are recognised in the Income statement.
The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date.
Where there is no active market, fair value is determined using valuation techniques.
Interest-bearing deposits
Interest-bearing deposits, principally comprising funds held with banks and other financial institutions with contractual cash flows
that are SPPI, and held in order to collect contractual cash flows, are carried at amortised cost using the effective interest method.
Impairment of financial assets
At each balance sheet date, the Group recognises provisions for expected credit losses on financial assets measured at amortised
cost, based on either 12-month or lifetime losses depending on whether there has been a significant increase in credit risk since initial
recognition. The simplified approach, based on the calculation and recognition of lifetime expected credit losses, is applied to
contracts that have a maturity of one year or less, including trade receivables.
When determining whether there has been a significant increase in credit risk since initial recognition and when estimating the
expected credit loss, the Group considers reasonable and supportable information that is relevant and available. This includes both
quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment,
including forward-looking information. Such forward-looking information takes into consideration the forecast economic conditions
expected to impact the outstanding balances at the balance sheet date. A financial asset is written off when there is no reasonable
expectation of recovery, such as the customer having filed for liquidation.
b Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits with any qualifying financial institution repayable on demand or
maturing within three months of the date of acquisition and which are subject to an insignificant risk of change in value.
c Derivative and non-derivative financial instruments and hedging activities
Derivative financial instruments, comprising interest rate swap derivatives, foreign exchange derivatives and fuel derivatives
(including options, swaps and forward contracts) are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value. They are classified as financial instruments through the Income statement.
The method of recognising the resulting gain or loss arising from remeasurement depends on whether the derivative is designated
as a hedging instrument, and if so, the nature of the item being hedged (as detailed below under cash flow hedges). The time value
of options is excluded from the designated hedging instrument and accounted for as a cost of hedging. Movements in the time value
of options are recognised in Other comprehensive income until the underlying transaction affects the Income statement.
When forward contracts are used to hedge forecast transactions, the Group generally designates only the spot component of the
forward contract as the hedging instrument within a hedge relationship. The effective portion of gains or losses arising on the
change in fair value of the spot component are recognised within Other comprehensive income in the Cash flow hedge reserve
within equity. The forward component of a forward contract is not designated within a hedge relationship, with the associated gains
and losses on the forward component recorded within Other comprehensive income in the Cost of hedging reserve within equity
until the underlying transaction affects the Income statement.
To manage foreign exchange movements on foreign currency customer cash inflows (denominated in US dollars, euros and
Japanese yen), certain non-derivative repayment instalments on foreign currency-denominated interest-bearing liabilities are
designated as hedging instruments within a hedge relationship. The effective portion of gains or losses arising from movements
in foreign exchange rates are recognised within Other comprehensive income in the Cash flow hedge reserve within equity.
Accumulated gains or losses within the cash flow hedge reserve are transferred to Sales in advance of carriage in the same period
as the forecast transaction occurs or when hedge accounting is discontinued when the forecast transaction is no longer expected
to occur, at which point amounts are immediately reclassified to the Income statement.
When a derivative is designated as a hedging instrument and that instrument expires, is sold or is restructured, if the initial forecast
transaction is still expected to occur, any cumulative gain or loss remains in the cash flow hedge reserve until such time as the
hedged item impacts the Income statement. Where there is a change in the risk management objective, then hedge accounting
is discontinued, and the associated cumulative gain or loss arising prior to the change in risk management objective remains in the
cash flow hedge reserve until such time as the underlying hedged item impacts the Income statement had the risk management
objective continued to have been met. Where a forecast transaction, which was previously determined to be highly probable and
for which hedge accounting applied, is no longer expected to occur, hedge accounting is discontinued and the cumulative gain
or loss in the cash flow hedge reserve is immediately reclassified to the Income statement.
Each operating company enters into foreign currency derivative contracts that are not designated in a hedge relationship, in order
to mitigate foreign exchange movements on financial liabilities designated in currencies other than the presentational currency of
each operating company, including but not limited to, lease liabilities. Movements in the fair value of such derivatives are recognised
in the Income statement in the period in which they occur and are presented within Net currency retranslation charges.
Exchange gains and losses on monetary investments are taken to the Income statement unless the item has been designated and
is assessed as an effective hedging instrument. Exchange gains and losses on non-monetary investments are reflected in equity.
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d Cash flow hedges
Changes in the fair value of derivative financial instruments designated as in a cash flow hedge relationship of a highly probable
expected future transaction are assessed for effectiveness and accordingly recorded in the Cash flow hedge reserve within equity.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments, to ensure that an economic relationship exists between the hedged item and hedging instrument. A hedging
relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: (i) there is ‘an economic
relationship’ between the hedged item and the hedging instrument; (ii) the effect of credit risk does not dominate the value changes
that result from that economic relationship; and (iii) the hedge ratio is aligned with the requirements of the Group’s risk management
strategy and in all instances is maintained at a ratio of 1:1.
The Group assesses whether the derivative designated as the hedging instrument in a hedge relationship is expected to be on
inception and at each balance sheet date effective in offsetting the changes in cash flows of the hedged item using the hypothetical
derivative model.
Sources of ineffectiveness include the following:
• in hedges of fuel purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what was originally
estimated, or if there are changes in the credit risk of the Group or the derivative counterparty;
• in hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what
was originally estimated, or if there are changes in the credit risk of the Group or the derivative counterparty;
• in hedges of interest rate payments, ineffectiveness may arise if there are differences in the critical terms between the interest
rate derivative instrument and the underlying hedged item, or if there are changes in the credit risk of the Group or the derivative
counterparty; and
• in all hedges, ineffectiveness may arise if there are differences between the critical terms of the hedging instrument and the
hypothetical derivative, such as where on inception of the hedge relationship the fair value of the hedging instrument is not zero.
Ineffectiveness is recorded within the Income statement as Realised/unrealised (losses)/gains on derivatives not qualifying for hedge
accounting and presented within Other non-operating credits.
Reclassification and transfer adjustments
Gains and losses accumulated in the Cash flow hedge reserve within equity are either reclassified from the Cash flow hedge reserve
when the hedged item affects the Income statement, or transferred from the Cash flow hedge reserve when the hedged item gives
rise to recognition in the Balance sheet as follows:
• where the forecast hedged item results in the recognition of expenses within the Income statement (such as the purchase of jet
fuel for which both fuel and the associated foreign currency derivatives are designated as the hedging instrument), the
accumulated gains and losses recorded in both the Cash flow hedge reserve and the Cost of hedging reserve are reclassified and
included in the Income statement within the same caption as the hedged item is presented. Such reclassification occurs in the
same period as the hedged item is recognised in the Income statement;
• where the forecast hedged item results in the recognition of a non-financial asset (such as the purchase of aircraft for which
foreign currency derivatives are designated as the hedging instrument or where the purchase of jet fuel gives rise to the
recognition of fuel inventory in storage facilities), or a non-financial liability (such as the sales in advance of carriage for which both
foreign currency derivatives and non-financial derivative instruments are designated as the hedging instrument), the accumulated
gains and losses recorded within both the Cash flow hedge reserve and the Cost of hedging reserve are transferred and included
in the initial cost of the asset and liability, respectively. These gains or losses are recorded in the Income statement as the non-
financial asset and the non-financial liability affects the Income statement (which for aircraft is through Depreciation, amortisation
and impairment over the expected life of the aircraft, for fuel inventory through Fuel costs and emission charges when it is
consumed and for sales in advance of carriage through Passenger revenue when the flight is flown); and
• where the forecast hedged item results in the recognition of a financial asset or liability (such as variable rate debt for which
interest rate swaps are designated as the hedging instrument), the accumulated gains and losses recorded within the Cash flow
hedge reserve are reclassified to the Income statement to Interest expense within Finance costs at the same time as the interest
income or expense arises on the hedged item.
Further information on the risk management activities of the Group is given in note 29.
e Fair value hedges
Changes in the fair value of derivative financial instruments designated in a fair value hedge relationship are recorded within the
Income statement as Net change in the fair value associated with fair value hedges within Other non-operating credits. The change
in the fair value of the hedged item attributable to the risk being hedged is recorded as part of the overall carrying amount of the
hedged item and is recorded within the Income statement as Net change in the fair value associated with fair value hedges within
Other non-operating credits.
For fair value hedges associated with financial liabilities measured at amortised cost, any adjustment to the carrying value is
amortised to the Income statement from the date of the cessation of the hedge relationship through to the maturity of the hedged
item using the effective interest rate method.
If the hedged item is de-recognised, the unamortised fair value is recognised immediately in the Income statement.
Ineffectiveness included in fair value hedges of interest rate payments may arise if there are differences in the critical terms between
the interest rate derivative instrument and the underlying hedged item, or if there are changes in the credit risk of the Group or the
derivative counterparty.
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Employee benefit plans
a Pension obligations
The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the
Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions
if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior years.
Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent
on one or more factors such as age, years of service and compensation. The pension benefits are dependent on the pension scheme
rules and relevant pensions legislation including applicable case law.
The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the
amount of future benefit that employees have earned in return for their service in the current and prior years. The benefit is
discounted to determine its present value, and the fair value of any plan assets are deducted. The discount rate is the yield at the
balance sheet date on AA-rated corporate bonds of the appropriate currency that have durations approximating those of the
Group’s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. When the net
obligation calculation results in an asset for the Group, the recognition of an asset is limited to any future refunds, net of the relevant
taxes, from the plan or reductions in future contributions to the plan (‘the asset ceiling’). The fair value of the plan assets is based
on market price information and, in the case of quoted securities, is the published bid price. The fair value of insurance policies which
exactly match the amount and timing of some or all benefits payable under the scheme are deemed to be the present value of the
related obligations. Longevity swaps are measured at their fair value.
Current service costs are recognised within Employee costs in the year in which they arise. Past service costs are recognised in
the event of a plan amendment or curtailment, or when the Group recognises related restructuring costs or severance obligations.
The net interest is calculated by applying the discount rate used to measure the defined benefit obligation at the beginning of the
period to the net defined benefit liability or asset, taking into account any changes in the net defined benefit liability or asset during
the period as a result of contributions and benefit payments. Net interest and other expenses related to the defined benefit plans
are recognised in the Income statement. Remeasurements, comprising IAS 19 gains and losses, the effect of the asset ceiling
(excluding interest) and the return on plan assets (excluding interest), are recognised immediately in Other comprehensive income.
Remeasurements are not reclassified to the Income statement in subsequent periods.
b Severance obligations
Severance obligations are recognised when employment is terminated by the Group before the normal retirement date, or whenever an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises a provision for severance payments when
it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without
realistic possibility of withdrawal, or providing severance payments as a result of an offer made to encourage voluntary redundancy.
Other employee benefits are recognised when there is deemed to be a present obligation.
c Flight crew provisions
The Group’s obligations in respect of flight crew provisions are calculated separately for each collective bargaining agreement.
In estimating these obligations, the Group makes assumptions regarding the number of employees that will elect to take early
retirement under these agreements, and the age at which they make this election (where relevant), using the probability weighted
methodology. The Group recognises a provision for service costs from the date of employment of the relevant individual, with the
corresponding amount recorded within the Income statement. The provisions recognised are discounted at the balance sheet date
and the effect of unwinding of these discount rates are recognised as a finance cost in the Income statement.
Remeasurements of the provisions are made for changes in financial assumptions and recorded in Other comprehensive income.
The Group records changes through Other comprehensive income, where assumptions regarding the elections to be made by
individuals differs to actual elections. These calculations are performed by a qualified actuary using the projected unit credit method.
Taxation
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, with the following exceptions:
• where the temporary differences arise on the initial recognition of an asset or liability in a transaction other than a business
combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss and does not give rise
to equal taxable and deductible temporary differences;
• in respect of taxable temporary differences associated with investments in subsidiaries or associates, where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future; and
• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the
related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income
tax is recognised in the Income statement.
International tax reform: Pillar Two implementation
On 23 May 2023, the IASB issued the amendments to IAS 12 – International tax reform: Pillar Two model reforms, effective for
periods beginning on or after 1 January 2023. The amendments to IAS 12 provide temporary mandatory relief from the recognition
of deferred tax balances arising from the implementation of the Pillar Two legislation. The Group has applied a temporary mandatory
relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.
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Inventories
Inventories are valued at the lower of cost and net realisable value. Such cost is determined by the weighted average cost method.
Inventories include mainly aircraft spare parts, repairable aircraft engine parts and fuel held in storage facilities.
Share-based payments
The Group operates a number of equity-settled, share-based payment plans, under which the Group awards equity instruments of
the Group for services rendered by employees. The fair value of the share-based payment plans is measured at the date of grant
using a valuation model provided by external specialists. The resulting cost, as adjusted for the expected and actual level of vesting
of the plan, is charged to the Income statement over the period in which the options vest. At each balance sheet date before vesting,
the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best
estimate of the achievement or otherwise of non-market conditions, and accordingly the number of equity instruments that will
ultimately vest. The movement in the cumulative expense since the previous balance sheet date is recognised in the Income
statement with a corresponding entry in equity.
Treasury shares
When the share capital of the Company is repurchased, the amount of the consideration paid, including directly attributable
transaction costs, is recognised as a deduction from equity within the treasury share reserve. When treasury shares are sold or
reissued, the amount received is recognised as an increase in equity, and the resulting gain or loss on the transaction is presented
as an adjustment to Retained earnings with no gain or loss recorded in the Income statement.
Provisions
Provisions are made when all of the following criteria have been met: (i) an obligation exists for a present liability in respect of a past
event; (ii) where the amount of the obligation can be reliably estimated; and (iii) where it is considered probable that an outflow
of economic resources will be required to settle the obligation. Where it is not considered probable that there will be an outflow
of economic resources required to settle the obligation, the Group does not recognise a provision, but discloses the matter as a
contingent liability. The Group assesses whether each matter is probable of there being an outflow of economic resources to settle
the obligation at each balance sheet date.
Employee leaving indemnities and other employee provisions are recorded for flight crew who, meeting certain conditions, have the
option of being placed on reserve or of taking early retirement. The Group is obligated to remunerate these employees until they reach
the statutory retirement age. The calculation is performed by qualified independent actuaries using the projected unit credit method.
Other employee related provisions are recognised for direct expenditures of business reorganisation such as severance payments
(restructuring provisions) where plans are sufficiently detailed and well advanced, and where appropriate communication to those
affected has been undertaken at the balance sheet date.
The method for determining legal claims provisions is determined on a claim-by-claim basis. Where a claim includes a significant
population of items, the weighted average provision is estimated by determining all potential outcomes and the probability of their
occurrence. Where a claim relates to a single item, then the Group determines the associated provision by applying the most likely
outcome, giving consideration to alternative outcomes. Where an individual claim is significant, the disclosure of quantitative
information is restricted to the extent that it does not prejudice the outcome of the claim. If the effect is material, expected future
cash flows are discounted using a rate that reflects, where appropriate, the risks specific to the provision. Where discounting is used,
the effect of unwinding the discount rate is recognised as a Finance cost in the Income statement.
Revenue recognition
Passenger revenue
The Group’s revenue primarily derives from transportation services for both passengers and cargo. Revenue is recognised when the
transportation service has been provided.
Passenger tickets are generally paid for in advance of transportation and are recognised, net of discounts, as Deferred revenue and
presented within current liabilities until either: (i) the customer has flown; or (ii) where the customer does not fly on the intended
date and has purchased a non-flexible fare.
For flexible and semi-flexible tickets, when the customer does not travel on the intended date, a term referred to as ‘unused tickets’,
the customer has a number of options they can elect to apply, depending on the fare type: (i) reschedule the date of intended travel;
(ii) request a refund; or (iii) request a voucher.
The Group estimates the amount of these unused tickets for which customers are not expected to exercise their remaining rights
prior to expiry based on the terms and conditions of the ticket and analysis of historical experience, a term referred to as ‘unused
ticket breakage’. This revenue is recognised based on the terms and conditions of the ticket and analysis of historical experience.
For unused ticket breakage, revenue is recognised only when the risk of a significant reversal of revenue is remote. The estimation
regarding historical experience is updated at each balance sheet date.
Where a flight is cancelled, the customer has a number of options they can elect to apply to their unused tickets: (i) compensation;
(ii) a refund; (iii) changing to an alternative flight; or (iv) the receipt of a voucher.
The presentation in the financial statements of these customer options, to the extent they differ to the recognition criteria stated
above, are as follows:
• Compensation for flight cancellation - such payments are presented net within Passenger revenue against the original ticket purchased;
• Refund - deferred revenue is reduced and no amount is recorded within revenue;
• Changing to an alternative flight – amounts are retained within Deferred revenue until such time as the flight is flown, at which
time it is recorded within Passenger revenue; and
• Voucher - retained within Deferred revenue until such time as it is redeemed for a flight or it expires, at which time it is recorded
within Passenger revenue.
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In relation to vouchers, the Group also recognises revenue by estimating the amount of vouchers that customers are not expected
to exercise their remaining rights prior to expiry using analysis of historical experience. The estimation regarding historical
experience is updated at each balance sheet date. The amount of such revenue recognised is constrained, where necessary,
such that the risk of a significant reversal of revenue in the future is remote.
Payments received in relation to certain ancillary services regarding passenger transportation, such as change fees, are not
considered to be distinct from the performance obligation to provide the passenger flight. Payments relating to these ancillary
services are recognised in Deferred revenue in current liabilities until the customer has flown.
The Group considers whether it is an agent or a principal in relation to passenger transportation services by considering whether
it has a performance obligation to provide services to the customer or whether the obligation is to arrange for the services to be
provided by a third party. The Group acts as an agent where: (i) it collects various taxes, duties and fees assessed on the sale
of tickets to passengers and remits these to the relevant taxing authorities; and (ii) where it provides interline services to airline
partners outside of the Group. Commissions earned in relation to agency services are recognised as revenue when the underlying
goods or services have been transferred to the customer. In all other instances, the Group considers it acts as the principal in relation
to passenger transportation services.
Cargo revenue
The Group has identified a single performance obligation in relation to cargo services and the associated revenue is measured at its
standalone selling price and recognised on satisfaction of the performance obligation, which occurs on the fulfilment of the
transportation service.
Other revenue
The Group has identified several performance obligations in relation to services that give rise to revenue being recognised within
Other revenue. These services, their performance obligations and associated revenue recognition include:
• the provision of maintenance services and overhaul services for engines and airframes, where the Group is engaged to enhance
an asset while the customer retains control of the asset. Accordingly, the performance obligations are satisfied, and revenue
recognised, over time. The Group estimates the proportion of the contract completed at the balance sheet date and recognises
revenue based on the percentage of completion of the contract;
• the provision of ground handling services, where the performance obligations are fulfilled when the services are provided;
• the provision of holiday and hotel services, where the performance obligations are satisfied over time as the customer receives
the benefit of the service; and
• brand and marketing activities, where the performance obligations are satisfied as the associated activities occur.
Customer loyalty programmes
The Group operates four principal loyalty programmes: the British Airways Executive Club, Iberia Plus, Vueling Club and the
Aer Lingus Aer Club. The customer loyalty programmes award travellers Avios to redeem for various rewards, primarily redemption
travel, including flights, hotels and car hire. Avios are also sold to commercial partners to use in loyalty activity.
Avios issuance
When issued, the relative standalone selling price of an Avios is recorded within Deferred revenue in current liabilities until the
customer redeems the Avios. The relative standalone selling price of Avios is based on the value of the awards for which the Avios
could be redeemed. The Group also recognises revenue associated with the proportion of Avios that are not expected to be
redeemed, referred to as ‘breakage’, based on the results of modelling using historical experiences and expected future trends
in customer behaviour, up until the balance sheet date. The amount of such revenue recognised is limited, where necessary,
such that the risk of a significant reversal of revenue in the future is remote.
Where the issuance of Avios arises from travel on the Group’s airlines, the consideration received from the customer may differ to
the aggregation of the relative standalone selling prices. In such instances, the allocation of the consideration to each performance
obligation is undertaken on a proportional basis using the relative standalone selling prices.
The Group has contractual arrangements with non-Group airlines and non-air partners for the issuance and redemption of Avios,
for which it has identified the following performance obligations:
Companion vouchers
Certain non-air partners issue their cardholders with companion vouchers, which forms part of the variable consideration of the
overall contract, depending on the level of expenditure by the cardholders, for redemption on the airlines of the Group for the same
flight and class of cabin as the underlying fare being purchased. The Group estimates the standalone selling price of the companion
voucher performance obligation, using valuation techniques, by reference to the amount that a third party would be prepared to pay
in an arm’s length transaction.
Brand and marketing activities
For both air and non-air partners, the Group licenses the Avios and the airline brands for certain activities, such as the creation of co-
branded credit cards. In addition, the Group has certain contractual arrangements whereby it commits to provide marketing services
to the members of the loyalty schemes on behalf of those partners. Under IFRS 15, for the provision of both brand and marketing
services, the partner receives benefits incremental to the issuance of Avios. The Group estimates the standalone selling price of the
brand and marketing performance obligations, using valuation techniques, by reference to the amount that a third party would be
prepared to pay in an arm’s length transaction for access to comparable brands for the period over which they use the brand.
For brand services, as the Group considers that the partner has the right to use the brand, revenue is recognised as the brand service
is provided and not over time. For marketing performance obligations, revenue is recognised as the marketing activities occur.
Upfront payments
Where a partner makes an upfront payment to the Group that does not relate to any specific performance obligation, then the
Group considers such payments as advance payments for future goods and services and the associated revenue is recognised as
those goods and services are provided, as detailed above. In such instances, the payment is allocated across all of the performance
obligations over the contract term. The Group estimates the expected level of Avios to be issued over the contract term using
experience, historical and expected future trends, and allocates the payments to the relevant performance obligations accordingly.
At each balance sheet date, the Group updates its estimate of the number of Avios expected to be issued over the total contract
term and recognises a cumulative catch-up adjustment where necessary.
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When a partner makes an upfront payment to the Group, the Group assesses whether such a payment is representative of a
significant financing event. Where a significant financing component is identified, the Group estimates a market rate of interest that
an arm’s length financial liability of similar size and tenor would yield. The Group recognises the imputed interest within the Income
statement as Other finance costs within Finance costs.
Other considerations
The Group considers whether it is an agent or a principal in relation to the loyalty services by considering whether it has a
performance obligation to provide services to the customer or whether the obligation is to arrange for the services to be provided
by a third party. In particular, the Group acts as an agent where customers redeem their Avios on interline partner flights outside
of the Group, where the fees payable to the interline partner are presented net against the associated release of the Deferred revenue.
Exceptional items
Exceptional items are those that in management’s view need to be separately disclosed by virtue of their size or nature and where
such presentation is relevant to an understanding of the Group’s financial performance. While management has defined a list of
items and a quantitative threshold that would merit categorisation as exceptional that has been established through historical
experience, the Group retains the flexibility to add additional items should their size or nature merit such presentation. The
accounting policy in respect of exceptional items and classification of an item as exceptional is approved by the Board, through
the Audit and Compliance Committee.
The financial performance of the Group is monitored by the Management Committee and the Board using metrics that exclude
exceptional items to enable comparison to prior reporting periods as well as to other selected companies, and also for making
strategic, financial and operational decisions.
The exceptional items recorded in the Income statement include, but are not limited to, items such as significant settlement
agreements with the Group’s pension schemes; significant restructuring; the impact of business combination transactions that do
not contribute to the ongoing results of the Group; significant discontinuance of hedge accounting; legal settlements; individually
significant tax transactions; and the impact of the sale, disposal or impairment of an asset or investment in a business. Where
exceptional items are separately disclosed, the resultant tax impact is additionally separately disclosed. Certain exceptional items
may cover more than a single reporting period, such as significant restructuring events, but not more than two reporting periods.
Further information is given in the Alternative performance measures section.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received. Loans provided and/or
guaranteed by governments that represent market rates of interest are recorded at the amount of the proceeds received and
recognised within Borrowings. Those loans provided and/or guaranteed by governments that represent below market rates of
interest are measured at inception at their fair value and recognised within Borrowings, with the differential to the proceeds received
recorded within Deferred income and released to the relevant financial statement caption in the Income statement on a systematic
basis. Grants that compensate the Group for expenses incurred are recognised in the Income statement in the relevant financial
statement caption on a systematic basis in the periods in which the expenses are recognised.
Critical accounting estimates, assumptions and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities, income and expenses. These judgements, estimates
and associated assumptions are based on historical experience and various other factors believed to be reasonable under the
circumstances. Actual results in the future may differ from judgements and estimates upon which financial information has
been prepared. These underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets
and liabilities within the next financial year are as follows:
• Income taxes (note 10): the period over which historical tax losses can be utilised;
• Revenue recognition (note 24): breakage assumptions applied to passenger revenue, customer loyalty programmes and
unredeemed vouchers;
• Restoration and handback provisions (note 27): key assumptions underlying the carrying value of the provisions; and
• Employee benefit obligations (note 34): Airways Pension Scheme (APS) and New Airways Pension Scheme (NAPS) key actuarial
assumptions.
The judgements that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within
the next financial year are as follows:
• Income taxes (note 10): determining whether the HMRC enquiries into the IAG Loyalty VAT accounting gives rise to a provision
or a contingent liability;
• Leases (note 14): determining the lease term of contracts with renewal and termination options;
• Other equity investment (note 19): determining whether the Group has significant influence over Air Europa Holdings; and
• Restoration and handback provisions (note 27): determination of accounting policy for leased aircraft.
New standards, amendments and interpretations
The following amendments and interpretations apply for the first time in 2024, but do not have a material impact on the
consolidated financial statements of the Group:
• lease liability in a sale and leaseback – amendments to IFRS 16 effective for periods beginning on or after 1 January 2024; and
• disclosures: supplier finance arrangements – amendments to IAS 7 and IFRS 7 – effective for periods beginning on or after
1 January 2024.
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In addition, Classification of liabilities as current or non-current and non-current liabilities with covenants - amendments to IAS 1
is effective for periods beginning on or after 1 January 2024. These amendments have had a material impact on the consolidated
financial statements of the Group, the details of which are given in note 37.
The IASB and the IFRS Interpretations Committee (IFRIC) have issued the following standards, amendments and interpretations
with an effective date after the year end of these financial statements. The Group has assessed the impact of these standards,
amendments and interpretations, and it is not expected that these will have a material effect on the reported income or net assets of
the Group. The Group plans to adopt the following standards, interpretations and amendments on the date they become mandatory:
• lack of exchangeability – amendments to IAS 21 effective for periods beginning on or after 1 January 2025; and
• classification and measurement of financial instruments – amendments to IFRS 9 and IFRS 7 effective for periods beginning on or
after 1 January 2026.
In addition, IFRS 18 – presentation and disclosure in financial statements becomes effective for periods beginning on or after
1 January 2027 and replaces IAS 1 - presentation of financial statements. The Group is currently assessing the detailed implications
of applying the new standard on the Group’s consolidated financial statements.
3 Significant changes and transactions in the current reporting period
The financial performance and position of the Group was affected by the following significant events and transactions in the year
to 31 December 2024:
• on 14 June 2024, the Group entered into a five-year $3.0 billion, sustainability-linked, secured Revolving Credit Facility, with two
one-year extension options available subject to the approval of lenders, accessible by British Airways, Iberia and Aer Lingus, each
of which has separate limits. At 31 December 2024 no amounts had been drawn under the facility. Concurrent to entering into the
facility, the Group extinguished its $1,755 million secured Revolving Credit Facility, which was due to mature, in part, in March 2025
with the remainder maturing in March 2026;
• on 28 June 2024, as a result of securing the aforementioned Revolving Credit Facility, British Airways extinguished its two
£1.0 billion Export Development Guarantee Facilities, which were partially guaranteed by the UK Export Finance and undrawn
at 28 June 2024, and were due to mature in equal amounts in November 2026 and September 2028;
• on 23 February 2023, the Group entered into an agreement with Globalia to purchase the remaining 80% of the share capital
of Air Europa Holdings that it did not then own. The acquisition was subject to approval by the relevant competition authorities.
The agreement stipulated that at any time over a 24 month period from execution of the agreement, if any relevant approval was
not obtained, or if the Group decided not to proceed with the acquisition, the Group was required to pay a break-fee to Globalia
of €50 million. On 1 August 2024, the Group decided to withdraw from the acquisition. The Group has recorded an exceptional
charge of €50 million within Other non-operating credits in the Income statement for the year to 31 December 2024;
• on 1 August 2024, the Board of Directors approved an interim dividend of €0.03 per share, amounting to €147 million, which was
subsequently paid by 31 December 2024; and
• on 8 November 2024, the Group announced a €350 million share buyback programme, which commenced on 11 November 2024.
At 31 December 2024, the Group had purchased 47,854 thousand shares amounting to €156 million.
4 Impact of climate change on financial reporting
Significant transactions and critical accounting estimates, assumptions and judgements in the determination of the impact
of climate change
As a result of climate change, the Group has designed and approved its Flightpath net zero climate strategy, which commits the
Group to net zero emissions by 2050. While approved business plans currently have a duration of three years, the Flightpath net
zero climate strategy impacts both the short-, medium- and long-term operations of the Group.
The details regarding the inputs and assumptions used in the determination of the Flightpath net zero climate strategy include,
but are not limited to, the following that are within the control of the Group:
• the additional cost of the Group’s commitment to increasing the level of Sustainable Aviation Fuels (SAF) to 10% by 2030 and
to 70% by 2050;
• the cost of incurring an increase in the level of carbon offsetting and carbon capture schemes; and
• the impact of introducing more fuel-efficient aircraft and being able to operate these more efficiently.
In addition to these inputs and measures within the control of management, Flightpath net zero includes assumptions pertaining
to consumers, governments and regulators regarding the following:
• the impact on passenger demand for air travel as a result of both passenger trends regarding climate change and government policies;
• investment and policy regarding the development of SAF production facilities;
• investment and improvements in air traffic management; and
• the price of carbon through the EU, Swiss and UK Emissions Trading Systems/Schemes (ETS) and the UN Carbon Offsetting and
Reduction Scheme for International Aviation (CORSIA).
The level of uncertainty regarding the impact of these factors increases over time. Accordingly, the Group has applied critical
estimation and judgement in the evaluation of the impact of climate change regarding the recognition and measurement of assets
and liabilities within the financial statements.
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Critical accounting estimates, assumptions and judgements – cash flow forecast estimation
With the Flightpath net zero climate strategy assessing the impact over a long-term horizon to 2050, the level of estimation
uncertainty in the determination of cash flow forecasts increases over time. For those assets and liabilities, where their recoverability
is dependent on long-term cash flows, the following critical accounting estimates, assumptions and judgements, to the extent they
can be reliably measured, have been applied:
a Long-term fleet plans and useful economic lives
The Group’s Flightpath net zero climate strategy has been developed in conjunction with the long-term fleet plans of each operating
company. This includes the annual assessment of useful lives and the residual values of each aircraft type.
As a result of the impact of the COVID-19 pandemic, the Group retired 72 aircraft, their associated engines and rotable inventories.
These retired aircraft were older generation aircraft, that were less fuel-efficient, more carbon-intensive and more expensive to
operate than more modern models.
Subsequent to the retirement of these aircraft, coupled with the future committed delivery of 171 fuel-efficient aircraft as detailed
in note 15, the Group considers the existing fleet assets align with the long-term fleet plans to achieve its Flightpath net zero climate
strategy. All aircraft in the fleet, and those due to be delivered in the future, have the capability to utilise SAF in their operations
without impediment. Accordingly, no impairment has arisen in the current or prior year, nor have the useful lives and residual values
of aircraft been amended, as a result of the Group’s decarbonisation plans.
b Impairment testing of the Group’s cash generating units
The Group applies discounted cash flow models, for each cash generating unit (CGU), derived from the cash flow forecasts from
the approved three-year business plans. The Group’s Flightpath net zero climate strategy is long term in nature and includes
commitments that will occur at differing points over this time horizon. To the extent that certain of those commitments occur over
the short term, then they have been incorporated into the three-year business plans.
The Group adjusts the final year (being the third year) of these probability-weighted cash flows to incorporate the impacts of
climate change from the Group’s Flightpath net zero climate strategy that are expected to occur over the medium term, being to
2030. These adjustments are limited to those that: (i) the Group can reliably estimate at the balance sheet date, with those costs
subsequent to 2030 having such a high degree of uncertainty that they cannot be reliably estimated; (ii) only relate to the Group’s
existing asset base in its current condition; and (iii) incorporate legislation and regulation that is expected to be required to achieve
the Group’s Flightpath net zero climate strategy, and which is sufficiently progressed at the balance sheet date.
As a result, the Group’s impairment modelling incorporates the following aspects of the Group’s Flightpath net zero climate strategy
through to 2030, after which time the level of uncertainty regarding timing and costing becomes insufficiently reliable to estimate:
(i) an increase in the level of SAF consumption to 10% of the overall fuel mix; (ii) forecast cost of carbon, including SAF, ETS allowances
and CORSIA units (all derived from externally sourced or derived information); (iii) the removal of existing free ETS allowances
issued by the EU member states, Switzerland and the UK; (iv) forecast kerosene taxes applied to jet fuel for all intra EU flight activity;
and (v) assumptions regarding the ability of the Group to recover these incremental costs through increased ticket pricing.
In preparing the impairment models, the Group cash flow projections are prepared on the basis of using the current fleet in its
current condition. The Group excludes the estimated cash flows expected to arise from future restructuring unless already
committed and assets not currently in use by the Group. In addition, for the avoidance of doubt, the Group’s impairment modelling
excludes the following aspects of the Group’s Flightpath net zero climate strategy: (i) the expected transition to electric and
hydrogen aircraft, as well as future technological developments to jet engines and airframes; (ii) any savings from the transition
to more fuel-efficient aircraft other than those either in the Group’s fleet or those committed orders due to be delivered over the
business plan period as replacement aircraft; (iii) the benefit of the development of carbon capture technologies and enhanced
carbon offsetting mechanisms; (iv) the required beneficial reforms to air traffic management regulation and legislation; and (v)
the required government incentives and/or support across the supply chain.
As detailed in note 17, the Group applies a long-term growth rate to these adjusted probability weighted cash flows, per CGU, and
each of the long-term growth rates include a specific adjustment to reduce the rate to reflect the Group’s assumptions regarding
the reduced demand and elasticity impact arising from climate change. These impacts are derived with reference to external market
data, industry publications and internal analysis.
Given the inherent uncertainty associated with the impact of climate change, the Group has applied additional sensitivities in note 17
to reflect a more adverse impact of climate change than currently expected. This has been captured through both the downward
sensitivities of the long-term growth rates, ASKs and operating margins and the increased fuel price sensitivity.
c Valuation of employee benefit scheme assets
The Group’s employee benefit schemes are principally represented by the British Airways APS and NAPS schemes in the UK. The
schemes are structured to make post-employment payments to members over the long term, with the trustees having established
both return-seeking assets and liability-matching assets that mature over the long term to align with the forecast benefit payments.
The assets of these schemes are invested predominantly in a diversified range of equities, bonds and property. The valuation of
these assets ranges from those with quoted prices in active markets, where prices are readily and regularly available, through to
those where the valuations are not based on observable market data, often requiring complex valuation models. The trustees of the
schemes have integrated climate change considerations into their long-term decision-making and reporting processes across all
classes of assets, actively engaging with all fund and portfolio managers to ensure that where unobservable inputs are required into
valuation models, that such valuation models incorporate long-term expectations regarding the impact of climate change.
d Recoverability of deferred tax assets
In determining the recoverable amounts of the Group’s deferred tax assets, the Group applies the future cash flow projections
for a period of up to ten years derived from the approved three-year business plans. The Group applies a medium-term growth
rate subsequent to the three-year business plans, specific to each operating company. In considering the impact of the Group’s
Flightpath net zero climate strategy, management adjusts this medium-term growth rate, where applicable, to incorporate the
assumed impacts on both revenue and costs to the Group.
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e Provision recognition
Under Flightpath net zero, the Group has committed to reducing its net emissions to zero by 2050, and accordingly, the Group has
considered whether such a commitment gives rise to a provision at the balance sheet date. In order to recognise a provision, an entity
must meet the following criteria: (i) the entity has a present obligation as result of a past event; (ii) it is probable that an economic
outflow of resources will be required to settle the obligation; and (iii) a reliable estimate can be made of the amount of the obligation.
While the Group considers there will be an economic outflow of resources to meet its Flightpath net zero commitment, these
commitments relate to the emissions arising in future reporting periods irrespective of when those commitments were announced.
Accordingly, the Group does not consider that the Flightpath net zero commitments give rise to a present obligation as a result of
a past event and no separate provisions have been recorded in relation to these commitments.
f The price of carbon
EU, Swiss and UK Emissions Trading Systems/Schemes
The EU, Swiss and the UK’s ETS were established to reduce greenhouse gas emissions cost effectively. Under these schemes the
Group’s operating companies are required to buy emission allowances or are issued them under existing quotas. The Group is
required to surrender these allowances to the relevant authorities annually dependent on the level of CO2 equivalent emitted within
a 12-month period. Over time, the level of available emission allowances decreases in order to reduce total emissions, which has
the effect of increasing the price of such allowances. The Group expects that the future price of such allowances will continue to
increase and that the free allocation of emission allowances will cease. Given the relative illiquid nature of the emission allowance
market, there is uncertainty as to the future pricing of such allowances.
Carbon Offsetting and Reduction Scheme for International Aviation
In October 2016, the International Civil Aviation Organization adopted the CORSIA, which aims to offset growth-related CO2
emissions in international air traffic from 1 January 2021, with the pilot phase running through to 31 December 2023. The first phase
of the CORSIA implementation commenced on 1 January 2024 and will run through to 31 December 2026, after which the second
phase will run through to 31 December 2035, measured in three-year reporting periods. The first phase of CORSIA is voluntary,
and currently 126 States have agreed to participate.
The first phase of CORSIA utilises total CO2 emissions from the international civil aviation over a baseline of 85% of the 2019 level of
emissions (the Baseline Year) for all of those participating States. The offsetting requirements apply to CORSIA eligible flights, being
all international flights between participating States, with the following flights excluded: (i) domestic flights; (ii) international flights
between States where at least one State has not volunteered to participate in the first phase; (iii) those flights utilising SAF; and (iv)
those flights subject to various ETS arrangements to avoid duplication of emission charges.
The calculation and verification of the offsetting requirements in the first phase shall be determined by the sectoral approach
annually, with companies retiring their obligations in 2028 (although retirements can occur earlier subject to agreement with national
authorities). Under the sectoral approach, each of the Group’s operating companies will be required to offset an amount of CO2
emissions equivalent to the emissions generated on CORSIA eligible flights, multiplied by the Sector’s Growth Factor. The Sector’s
Growth Factor is calculated on total global aviation CO2 emissions arising on international air routes between all participating States
in a given year divided by the total sectoral CO2 emissions in the Baseline Year for the same routes.
Voluntary offset schemes
The Group utilises certain voluntary offset schemes to offset certain CO2 emissions, such as those generated by British Airways on
domestic flights. The Group purchases offset certificates arising from a broad range of accredited projects. Periodically, the Group
will retire these offset certificates from the registry.
Impact on financial reporting
As detailed in note 2, the Group accounts for the purchase of allowances as an increase in Carbon-related and other assets,
which are measured at amortised cost. In addition, as the Group emits CO2 equivalent as part of its flight operations, a provision is
recorded to settle the Carbon-related obligation. As the provision is recognised, a corresponding amount is recorded in the Income
statement within Fuel costs and emission charges. For emissions for which the Group has already purchased Carbon-related assets,
the provision is valued at the weighted cost of those allowances. Where the level of emissions exceeds the amounts of allowances
held, this deficit is measured at the market price of such allowances at the balance sheet date.
For the year to, and at 31 December 2024, the Group has recorded the following within the financial statements:
Carbon-related assets (presented as part of Carbon-related and other assets in note 20) include the following amounts:
2024
20231
€ million
ETS assets
CORSIA
assets
Voluntary
offsets
Total
ETS assets
CORSIA
assets
Voluntary
offsets
Total
Balance at 1 January
577
–
–
577
407
–
–
407
Purchase of carbon assets
242
–
–
242
264
–
–
264
Extinguished/retired during
the year
(233)
–
–
(233)
(96)
–
–
(96)
Exchange differences
12
–
–
12
2
–
–
2
Balance at 31 December
598
–
–
598
577
–
–
577
Analysis:
Current
323
–
–
323
247
–
–
247
Non-current
275
–
–
275
330
–
–
330
598
–
–
598
577
–
–
577
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175
Carbon-related obligations (presented as part of Provisions in note 27) include the following amounts:
2024
20231
€ million
ETS
obligations
CORSIA
obligations
Voluntary
offsets
Total
ETS
obligations
CORSIA
obligations
Voluntary
offsets
Total
Balance at 1 January
244
–
3
247
129
–
3
132
Obligations recognised in
the Income statement2
304
9
1
314
234
–
4
238
Release of unused amounts
in the Income statement2
(12)
–
(1)
(13)
(24)
–
(2)
(26)
Extinguished/retired during
the year
(233)
–
(3)
(236)
(96)
–
(2)
(98)
Exchange differences
4
–
–
4
1
–
–
1
Balance at 31 December
307
9
–
316
244
–
3
247
Analysis:
Current
307
–
–
307
244
–
3
247
Non-current
–
9
–
9
–
–
–
–
307
9
–
316
244
–
3
247
1
For the year to 31 December 2024, the Group has elected to provide a disaggregated breakdown of Carbon-related assets and Carbon-related
obligations, which are reported on an aggregated basis within Carbon-related and other assets and Provisions, respectively. Accordingly, the results
for 2023 have been reclassified to conform with the current year presentation. Refer to note 2.
2 For the year to 31 December 2024, the total amount in the Income statement within Fuel costs and emission charges that related to emission
allowances was €301 million (2023: €212 million). Refer to note 6.
See note 35 for details of the amounts recognised in the Cash flow statement for the years to 31 December 2024 and 31 December 2023.
At 31 December 2024 and 31 December 2023, the Group had acquired and committed to acquire at fixed prices, the following
percentages of its total emissions allowances forecast to be purchased over the three-year business plan periods:
Percentage of forecast emission allowances required
2024
2023
Within 12 months
100%
100 %
1-2 years
67%
62 %
2-3 years
19%
24 %
5 Segment information
a Business segments
The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments,
and has been identified as the IAG Management Committee (IAG MC).
The Group has a number of entities that are managed as individual operating companies including airline, loyalty and platform
functions. Each operating company operates its network operations as a single business unit and the IAG MC assesses performance
based on measures including operating profit, and makes resource allocation decisions for the operating companies based on
profitability, primarily by reference to the passenger markets in which the companies operate. The objective in making resource
allocation decisions is to optimise consolidated financial results.
The Group has determined its operating segments based on the way that it treats its businesses and the manner in which resource
allocation decisions are made. British Airways, Iberia, Vueling, Aer Lingus and IAG Loyalty have been identified for financial reporting
purposes as reportable operating segments. LEVEL is also an operating segment but does not exceed the quantitative thresholds to
be reportable, and management has concluded that there are currently no other reasons why LEVEL should be separately disclosed.
There are varying levels of transactions between operating segments, which principally relate to the provision of maintenance
services from the Iberia operating segment to the other operating segments, the provision of flight services by the airlines to the
IAG Loyalty segment and the provision of loyalty and holiday services from IAG Loyalty to the airline operating segments.
The platform functions of the business primarily support the airline and loyalty operations. These activities are not considered
to be reportable operating segments as they either earn revenues incidental to the activities of the Group and resource allocation
decisions are made based on the passenger business or are not reviewed regularly by the IAG MC and are included within Other
Group companies.
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Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
176
For the year to 31 December 2024
2024
€ million
British
Airways
Iberia
Vueling
Aer Lingus
IAG
Loyalty
Other Group
companies1
Total
Revenue
Passenger revenue
15,426
5,807
3,240
2,291
1,099
411
28,274
Cargo revenue
921
250
–
55
–
8
1,234
Other revenue
110
1,034
19
16
1,413
–
2,592
External revenue
16,457
7,091
3,259
2,362
2,512
419
32,100
Inter-segment revenue
530
451
2
14
350
485
1,832
Segment revenue
16,987
7,542
3,261
2,376
2,862
904
33,932
Employee costs
(3,386)
(1,618)
(427)
(508)
(104)
(313)
(6,356)
Fuel costs and emission charges
(4,328)
(1,611)
(895)
(638)
–
(136)
(7,608)
Depreciation and amortisation charge
(1,338)
(476)
(279)
(169)
(23)
(79)
(2,364)
Operating profit/(loss)
2,422
867
400
205
495
(106)
4,283
Exceptional items2
–
(160)
–
–
–
–
(160)
Operating profit/(loss) before exceptional items
2,422
1,027
400
205
495
(106)
4,443
Net non-operating costs
(720)
Profit before tax
3,563
Total assets
26,138
10,220
3,731
2,431
4,164
(2,880)
43,804
Total liabilities
(20,328)
(9,319)
(3,850)
(2,170)
(3,861)
1,900 (37,628)
1
Includes eliminations on total assets of €16,960 million and total liabilities of €5,676 million.
2 For details on exceptional items refer to the Alternative performance measures section.
For the year to 31 December 2023
2023
€ million
British
Airways1
Iberia
Vueling
Aer Lingus
IAG
Loyalty1
Other Group
companies2
Total
Revenue
Passenger revenue
14,204
5,215
3,180
2,194
679
338
25,810
Cargo revenue
862
233
–
55
–
6
1,156
Other revenue
91
986
17
10
1,383
–
2,487
External revenue
15,157
6,434
3,197
2,259
2,062
344
29,453
Inter-segment revenue
431
524
1
15
294
392
1,657
Segment revenue
15,588
6,958
3,198
2,274
2,356
736
31,110
Employee costs
(2,939)
(1,284)
(399)
(471)
(89)
(241)
(5,423)
Fuel costs and emission charges
(4,394)
(1,496)
(907)
(639)
–
(121)
(7,557)
Depreciation and amortisation charge
(1,164)
(409)
(259)
(150)
(15)
(66)
(2,063)
Operating profit/(loss)
1,550
940
396
225
421
(25)
3,507
Net non-operating costs
(451)
Profit before tax
3,056
Total assets
22,255
9,454
3,049
1,999
3,786
(2,863)
37,680
Total liabilities
(19,587)
(8,390)
(3,461)
(1,856)
(2,823)
1,715 (34,402)
1
During the year to 31 December 2024, the Group changed its internal organisation, resulting in BA Holidays, a previously fully owned and
consolidated subsidiary of British Airways Plc, being transferred from the British Airways segment to the IAG Loyalty segment, which aligns with
the revised reporting to the IAG MC. Accordingly, the Group has restated its previously reported segmental information for the year to 31 December
2023. There is no change to the total segmental results of the Group.
2 Includes eliminations on total assets of €16,268 million and total liabilities of €5,417 million.
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177
b Other revenue
Year to 31 December
€ million
2024
2023
Holiday and hotel services
990
938
Maintenance and overhaul services
820
683
Brand and marketing
436
347
Ground handling services
159
195
Other
187
324
2,592
2,487
c Geographical analysis
Revenue by area of original sale
Year to 31 December
€ million
2024
2023
UK
11,291
10,177
Spain
5,562
5,234
USA
5,406
5,069
Rest of world
9,841
8,973
32,100
29,453
Assets by area
31 December 2024
€ million
Property,
plant and
equipment
Intangible
assets
UK
14,021
1,807
Spain
5,617
1,210
USA
97
18
Rest of world
1,397
607
21,132
3,642
31 December 2023
€ million
Property,
plant and
equipment
Intangible
assets1
UK
12,764
1,374
Spain
5,644
1,320
USA
100
18
Rest of world
1,268
620
19,776
3,332
1
The results for 2023 include a reclassification of ETS allowances from Intangible assets to Carbon-related and other assets. An amount of
€577 million has been reclassified from Intangible assets.
6 Operating expenses
a Expenses by nature – Operating result is arrived at after charging
Depreciation, amortisation and impairment of non-current assets:
€ million
2024
2023
Depreciation charge on right of use assets
1,134
1,077
Depreciation charge on owned assets
972
768
Amortisation and impairment of intangible assets
239
193
Depreciation charge on other leasehold assets
19
25
2,364
2,063
Cost of inventories:
€ million
2024
2023
Cost of inventories recognised as an expense
1,212
1,165
1,212
1,165
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Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
178
b Fuel costs and emission charges
€ million
2024
20231
Fuel costs
7,116
7,354
Hedging losses/(gains)
191
(9)
Emission charges
301
212
7,608
7,557
1
For the year to 31 December 2024, the Group has elected to provide a disaggregated breakdown of the Income statement caption Fuel costs
and emission charges and has, accordingly, provided figures for the comparative year to 31 December 2023.
c Property, IT and other costs
€ million
2024
2023
IT costs
478
365
Property costs
290
296
Insurance costs, professional fees and other costs
352
397
1,120
1,058
7 Auditor’s remuneration
The fees for the years to 31 December 2024 and 31 December 2023, for audit and non-audit services provided by the external
auditor of the Group’s consolidated financial statements and of certain individual financial statements of the consolidated
companies, KPMG Auditores S.L., and by companies belonging to KPMG’s network, were as follows:
€’000
2024
2023
Fees payable for the audit of the Group and individual accounts
6,979
6,929
Fees payable for other services:
Audit of the Group’s subsidiaries pursuant to legislation
1,284
1,284
Other services pursuant to legislation
205
218
Other audit and assurance services
1,795
1,589
10,263
10,020
Fees payable to the Group’s external auditor for the audit of the Group’s pension scheme during the year total €268 thousand
(2023: €251 thousand).
8 Employee costs and numbers
€ million
2024
2023
Wages and salaries
4,380
3,711
Social security costs
692
604
Costs related to pension scheme benefits
312
297
Share-based payment charge
72
52
Other employee costs1
900
759
Total employee costs
6,356
5,423
1
Other employee costs include allowances and accommodation for crew.
The number of employees during the year and at 31 December was as follows:
2024
2023
31 December 2024
31 December 2023
Average
number of
employees
Number of
employees1
Percentage
of women
Average
number of
employees
Number of
employees1
Percentage
of women
In the air:
Cabin crew
24,421
24,615
70%
23,473
24,004
70%
Pilots
8,516
8,742
7%
8,085
8,223
7%
On the ground:
Airports
16,725
16,396
38%
16,395
16,784
37%
Corporate
16,313
16,936
48%
14,774
15,586
48%
Maintenance
7,288
7,454
8%
6,813
6,972
8%
Senior leaders
235
235
36%
222
225
36%
73,498
74,378
44%
69,762
71,794
44%
1
The number of employees is based on actual headcount at 31 December.
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179
9 Finance costs, income and other non-operating credits
a Finance costs
€ million
2024
2023
Interest expense on:
Bank borrowings
(10)
(237)
Asset financed liabilities
(198)
(170)
Lease liabilities
(485)
(508)
Bonds
(62)
(63)
Provisions unwinding of discount
(130)
(103)
Other borrowings
(50)
(42)
Capitalised interest on progress payments
33
28
Other finance costs
(15)
(18)
(917)
(1,113)
b Finance income
€ million
2024
2023
Interest on other interest-bearing deposits, cash and cash equivalents
404
386
404
386
c Net change in fair value of financial instruments
€ million
2024
2023
Net change in the fair value of convertible bond
(237)
(11)
(237)
(11)
d Net financing credit relating to pensions
€ million
2024
2023
Net financing credit relating to pensions
63
103
e Other non-operating credits
€ million
2024
2023
Gain on sale of investments
–
10
Credit related to equity investments (note 19)
7
3
Share of profits in investments accounted for using the equity method (note 18)
–
6
Realised gains/(losses) on derivatives not qualifying for hedge accounting
42
(23)
Unrealised gains on derivatives not qualifying for hedge accounting
95
13
Net change in the fair value associated with fair value hedges (note 30)
–
(1)
Air Europa Holdings termination settlement expense (note 3)
(50)
–
94
8
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International Airlines Group | Annual Report and Accounts 2024
180
10 Tax
Significant accounting estimate applied - Income taxes: period over which historical tax losses can be utilised
At 31 December 2024, the Group recognised €754 million in respect of deferred tax assets (2023: €1,202 million).
The Group is subject to income taxes in numerous jurisdictions. Estimates are required in determining the worldwide provision
for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain because
it may be unclear how tax law applies to a particular transaction or circumstance. Where the Group determines that it is more
likely than not that the tax authorities would accept the position taken in the tax return, amounts are recognised in the financial
statements on that basis. Where the amount of tax payable or recoverable is uncertain, the Group recognises a corresponding
liability or an asset, respectively, based on either: the Group’s judgement of the most likely outcome; or, when there is a wide
range of possible outcomes, a probability-weighted average approach.
The Group recognises deferred tax assets only to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, carried forward tax credits or tax losses can be utilised. Management uses judgement,
including the consideration of past and current operating performance and the future projections of performance laid out in
the approved business plan in order to assess the probability of recoverability.
In exercising this judgement, while there are no time restrictions on the utilisation of historic tax losses in the principal
jurisdictions in which the Group operates, future cash flow projections are forecast for a period of up to ten years from the
balance sheet date, which represents the period over which it is probable that future taxable profits will be available.
At 31 December 2024, the Group had unrecognised deferred tax losses and other temporary differences of €1,400 million
that the Group does not reasonably expect to utilise (2023: €1,584 million). In applying the aforementioned judgement, had the
Group extended the period of future cash flow projections indefinitely, then the amount of unrecognised tax losses would have
reduced by €260 million (2023: €575 million).
Significant accounting judgement applied - Determining whether the judicial process between HMRC and IAG Loyalty into
the VAT accounting of IAG Loyalty gives rise to a provision or a contingent liability
The Group applies judgement in the determination as to whether it considers the outcome of the judicial process between IAG
Loyalty and His Majesty’s Revenue and Customs (HMRC), in the UK, on the IAG Loyalty VAT accounting, is more likely than not to
result in a favourable outcome to the Group, and, accordingly, whether to record the matter as a provision or as a contingent liability.
In forming its judgement, the Group has reviewed the decision issued by and the correspondence with HMRC, including having
considered the historical tax ruling issued by HMRC to the Group on this matter. At 31 December 2024 and through to the date
of this report, the directors are satisfied that it is more likely than not that a favourable outcome will eventuate. Accordingly,
the Group does not consider it appropriate to record any provision for this matter and a contingent liability has been disclosed.
a Tax (charges)/credits
Tax (charges)/credits recognised in the Income statement, Other comprehensive income and directly in equity:
2024
2023
€ million
Income
statement
Other
comprehensive
income
Recognised
directly in
equity
Total
Income
statement
Other
comprehensive
income
Recognised
directly in
equity
Total
Current tax
Movement in respect of
prior years
183
–
–
183
(1)
–
–
(1)
Movement in respect of
current year
(384)
7
–
(377)
(206)
8
–
(198)
Total current tax
(201)
7
–
(194)
(207)
8
–
(199)
Deferred tax
Movement in respect of
prior years
(33)
(2)
–
(35)
(10)
(2)
12
–
Movement in respect of
current year
(597)
(70)
4
(663)
(171)
106
(17)
(82)
Rate change/rate
differences
–
–
–
–
(13)
3
–
(10)
Total deferred tax
(630)
(72)
4
(698)
(194)
107
(5)
(92)
Total tax
(831)
(65)
4
(892)
(401)
115
(5)
(291)
The current tax credit in respect of prior years includes an amount of €190 million relating to the revocation of Royal Decree-Law
3/2016 in Spain.
The current tax credit in Other comprehensive income relates to movements relating to employee benefit plans of €7 million
(2023: credit of €8 million).
Tax recognised in equity of a €14 million charge (2023: €5 million charge) relates to cash flow hedges, offset by a €18 million
credit (2023: nil) relating to share-based schemes.
Within tax in Other comprehensive income is a tax charge of €64 million (2023: tax credit of €114 million) that may be reclassified
to the Income statement and a tax charge of €1 million (2023: tax credit of €1 million) that will not.
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181
b Current tax asset
€ million
2024
2023
Balance at 1 January
157
64
Income statement
(201)
(207)
Other comprehensive income
7
8
Cash
245
291
Exchange and other movements
12
1
Balance at 31 December
220
157
Current tax asset
231
159
Current tax liability
(11)
(2)
Balance at 31 December
220
157
c Deferred tax (liability)/asset
€ million
Fixed
assets
Right of
use
assets
Lease
liabilities
Employee
leaving
indemnities
and others
Employee
benefit
plans
Fair value
gains/
losses1
Share-
based
payment
schemes
Tax loss
carried
forward
and tax
credits
Other
temporary
differences2
Total
Balance at 1 January 2024
(1,013)
24
7
214
45
121
26
1,721
53 1,198
Income statement
(395)
91
1
41
(3)
–
11
(326)
(50) (630)
Other comprehensive income
–
–
–
23
(12)
(64)
–
(20)
1
(72)
Recognised directly in equity
–
–
–
–
–
(14)
18
–
–
4
Exchange movements and other
19
(2)
–
1
4
2
1
(40)
15
–
Balance at 31 December 2024
(1,389)
113
8
279
34
45
56
1,335
19 500
Balance at 1 January 2023
(680)
(44)
9
197
54
(3)
17
1,636
96 1,282
Income statement
(325)
68
(2)
11
(1)
–
9
78
(32) (194)
Other comprehensive income
–
–
–
6
(8)
114
–
(3)
(2)
107
Recognised directly in equity
–
–
–
–
–
(5)
–
–
–
(5)
Exchange movements and other
(8)
–
–
–
–
15
–
10
(9)
8
Balance at 31 December 2023
(1,013)
24
7
214
45
121
26
1,721
53 1,198
1
Fair value gains/losses include both the Cash flow hedge reserve and the Cost of hedging reserve, of which the movement in relation to Other
comprehensive income recognised in the Cash flow hedge reserve for 2024 was €40 million (2023: €104 million, see note 30d).
2 Other temporary differences include a deferred tax liability in relation to unremitted earnings of €5 million (2023: €nil).
€ million
2024
2023
Deferred tax asset
754
1,202
Deferred tax liability
(254)
(4)
Balance at 31 December
500
1,198
The deferred tax assets mainly arise in Spain and the UK and are expected to reverse in full beyond one year. Recognition
of the deferred tax assets is supported by the expected reversal of deferred tax liabilities in corresponding periods and projections
of operating performance laid out in the Board approved business plans and longer term forecasts, where necessary, prepared by
management.
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Sustainability Statement
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International Airlines Group | Annual Report and Accounts 2024
182
d Reconciliation of the total tax charge in the Income statement
The tax (charge)/credit is calculated at the domestic tax rates applicable to profits/(losses) in the country in which the profits/
(losses) arise. The differences between the expected tax charge (2023: charge) and the actual tax charge (2023: charge) on the
profit for the year to 31 December 2024 (2023: profit) are explained below:
€ million
2024
2023
Accounting profit before tax
3,563
3,056
Weighted average tax charge of the Group1
(873)
(718)
Unrecognised losses and deductible temporary differences arising in the year
(47)
11
Fair value movement on convertible bond
11
30
Effect of tax rate changes
–
(13)
Prior year tax assets recognised
10
289
Effect of lower tax rate in the Canary Islands
8
3
Intra-group dividends
(26)
–
Movement in respect of prior years
15
(11)
Revocation of Royal Decree-Law 3/2016 in Spain
135
–
Changes in accounting standards/tax legislation
(35)
–
Employee benefit plans accounted for net of withholding tax
13
22
Non-deductible expenses
(26)
(21)
Other items
(16)
7
Tax charge in the Income statement
(831)
(401)
1
The expected tax charge is calculated by aggregating the expected tax charges arising in each company in the Group and changes each year as tax
rates and profit mix change. The 2024 corporate tax rates for the Group’s main countries of operation are Spain 25% (2023: 25%), the UK 25%
(2023: 23.5%) and Ireland 12.5% (2023: 12.5%).
e Payroll related taxes and UK Air Passenger Duty
The Group was also subject to other taxes paid during the year which are as follows:
€ million
2024
2023
Payroll related taxes
698
604
UK Air Passenger Duty
1,084
936
1,782
1,540
f Factors that may affect future tax charges
Unrecognised deductible temporary differences and losses
€ million
2024
2023
Income tax losses
Spanish corporate income tax losses
253
569
Openskies SASU trading losses
405
406
Other trading losses
7
13
665
988
Other losses and temporary differences
Spanish deductible temporary differences1
361
238
UK capital losses
357
341
Irish capital losses
17
17
735
596
1
Included in Spanish deductible temporary differences is an amount of €93 million that originated as a tax loss and, in accordance with the Nineteenth
Amendment of Law 27/2014, can be deducted in ten equal annual instalments.
None of the unrecognised temporary differences have an expiry date.
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
183
Unrecognised temporary differences - investment in subsidiaries and associates
There are temporary differences of €1,495 million (2023: €1,910 million) associated with investments in subsidiaries and associates
for which deferred tax liabilities have not been recognised.
Pillar Two minimum effective tax rate reform
In 2021, the Organisation for Economic Co-operation and Development (OECD) released the Two Pillar solution to address the tax
challenges arising from the digitalisation of the economy. This reform to the international tax system addresses the geographical allocation
of profits for the purposes of taxation and is designed to ensure that multinational enterprises will be subject to a minimum 15% effective tax
rate. On 11 July 2023, the UK enacted Finance (No. 2) Act 2023, which introduced the Multinational Top-up Tax and the Domestic Top-up
Tax. On 18 December 2023,Ireland enacted Finance (No. 2) Act 2023, which, pursuant to the EU Minimum Tax Directive 2022/2523,
provided for a Qualified Domestic Top-up Tax when an in-scope group’s Irish operations have an effective rate of less than 15%.
On 20 December 2024, the Spanish parliament enacted Law 7/2024, which became effective on 22 December 2024, and implemented
the OECD’s Pillar Two global minimum tax. All the aforementioned legislation is effective to the Group from 1 January 2024.
The predominant jurisdiction in which the Group operates with an effective tax rate of less than 15% is Ireland through Aer Lingus.
In 2024, Aer Lingus recorded a current tax expense of €24 million relating to its Irish operations, which included a Domestic Top-up
Tax of €2 million.
Spain tax law changes
Revocation of Royal Decree-Law 3/2016 (RDL 3/2016)
Prior to the introduction of RDL 3/2016, the Company and the Spanish subsidiaries of the Group were permitted to offset up to 70%
of their taxable profits with historical accumulated losses (to the extent there were sufficient tax losses to do so), and the impairment
of subsidiaries was treated as deductible for tax purposes. With the introduction of RDL 3/2016, this limitation of tax losses applied
to taxable profits was reduced to 25% and the deductibility for tax purposes of historical impairments of subsidiaries that had
occurred prior to 2013 was reversed. The revocation by the Tribunal Constitucional (Constitutional Court) in January 2024 principally
meant that the limitation reversed to 70% and historical impairments in subsidiaries reverted to being deductible for tax purposes,
giving rise to a net tax credit of €135 million, being a current tax credit of €190 million, net of a deferred tax charge of €55 million.
Enactment of Law 7/2024
On 20 December 2024, the Spanish parliament enacted Law 7/2024, which included the tax measures that had previously been
declared unconstitutional by the Tribunal Constitucional. It is effective for the Group from 1 January 2024 and permits the Group’s
Spanish companies to offset only up to 25% of their taxable profits with historical accumulated losses (to the extent that there are
sufficient losses to do so) and requires historical impairments in subsidiaries to be treated as non-deductible. This gave rise to a tax
charge of €35 million, being a deferred tax charge of €25 million and a current tax charge of €10 million.
Engagement with tax authorities
The Group is subject to audit and enquiry by tax authorities in the territories in which it operates and engages with those tax
authorities in a cooperative manner.
g Tax-related contingent liabilities
The Group has certain contingent liabilities that could be reliably estimated, across all taxes, but excluding the IAG Loyalty VAT
matter detailed below, at 31 December 2024 amounting to €128 million (31 December 2023: €110 million). While the Group does not
consider it more likely than not that there will be material losses on these matters, given the inherent uncertainty associated with tax
litigation and tax audits, there can be no guarantee that material losses will not eventuate. As the Group considers that its chances
of success in each of these matters is more probable than not, it is not appropriate to make a provision for these amounts.
Included in the tax-related contingent liabilities are the following:
Merger gain
Following tax audits covering the period 2011 to 2014, the Spanish Tax Authorities issued a corporate income tax assessment to
the Company regarding the merger in 2011 between British Airways and Iberia (‘the Merger’). The maximum exposure in this case
is €104 million (31 December 2023: €100 million), being the amount in the tax assessment with an estimate of the interest accrued
on that assessment through to 31 December 2024.
The Company appealed the assessment to the Tribunal Económico-Administrativo Central (TEAC) (Central Administrative Tax
Tribunal). On 23 October 2019, the TEAC ruled in favour of the Spanish Tax Authorities. The Company subsequently appealed this
ruling to the Audiencia Nacional (National High Court) on 20 December 2019, and, on 24 July 2020, filed submissions in support of
its case. To assist it in its deliberations as to whether a gain arose from the Merger, on 15 September 2023, the Audiencia Nacional
commissioned an independent accounting expert to provide a report on the appropriate basis of accounting. As at 31 December
2024 and through to the date of these financial statements, the Audiencia Nacional has not ruled on whether a gain arose from the
Merger. The Company does not expect a judgment at the Audiencia Nacional on this case until the first half of 2026 at the earliest.
The Company disputes the technical merits of the assessment and ruling of the TEAC. Based on legal advice and an external
accounting expert’s opinion, the Company believes that it has strong arguments to support its appeal. The Company does not
consider it appropriate to make a provision for these amounts and, accordingly, has classified this matter as a contingent liability.
Should the Company be unsuccessful in its appeal to the Audiencia Nacional, it would reassess its position and the associated
accounting treatment accordingly.
Within the context of the aforementioned tax audits, the Spanish tax authorities concluded on the value of Iberia’s business within
the Merger. This valuation was contested by the Company in a separate case, where no tax liability is due. The Company believes
there are technical merits for a higher value, something that would indirectly reduce the quantum of the Merger gain assessed in the
dispute described above. On 18 January 2024, the Audiencia Nacional served notice on its judgment issued on 13 December 2023,
whereby it ruled in favour of the Spanish tax authorities in respect of the valuation of Iberia’s business within the Merger.
On 28 February 2024, the Company submitted a request for an appeal of the judgment to the Supreme Court in Spain.
The Company does not expect to receive a decision from the Supreme Court on its request for an appeal until the end of 2025.
If an appeal on this matter was ultimately successful, it would reduce the exposure of the Merger gain described above.
Strategic Report
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Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
184
IAG Loyalty VAT
As reported in the 2023 Annual report and accounts, and during the course of 2024, His Majesty’s Revenue and Customs (HMRC)
in the UK has been considering: (i) the appropriate VAT accounting to be applied by Avios Group (AGL) Limited, a controlled
undertaking of the Group trading as IAG Loyalty; and (ii) the validity of a historical ruling (‘the Ruling’) issued by HMRC to the Group.
On 29 October 2024, HMRC issued the Group its decision letter with its view of the appropriate VAT accounting to be applied by
IAG Loyalty. HMRC’s decision letter asserts that the charges made by IAG Loyalty are for developing, administering and maintaining
a loyalty scheme with the result that VAT arises at 20% on the issuance of Avios irrespective of the redemption product. By implication,
HMRC’s decision letter confirmed its view that IAG Loyalty was not entitled to rely on the Ruling during the relevant assessed
periods. The decision letter differs to the VAT accounting approach applied by IAG Loyalty, which was based on both the Ruling
issued by HMRC and existing case law precedent. Historically, IAG Loyalty has accounted for VAT depending on the nature
of the redemption products for which Avios are redeemed, the vast majority of which are flights which are zero-rated.
The Group has reviewed HMRC’s decision letter with its legal and tax advisers and strongly disagrees with HMRC’s view. The Group
considers that not accounting for VAT on the issuance of Avios, but accounting for VAT depending on the nature of the redemption
products for which Avios are redeemed, remains appropriate. Accordingly, subsequent to 31 December 2024 and prior to the date
of this report, the Group appealed the case to the First-tier Tribunal (Tax) in the UK and expects a hearing in 2026.
In addition, the Group, having reviewed its position with its legal and tax advisers, considers that it has a legitimate expectation
that it should have been able to rely upon the Ruling. Accordingly, subsequent to 31 December 2024 and prior to the date of this
report, the Group applied to the High Court in the UK for a judicial review of whether IAG Loyalty had a legitimate expectation that
it could rely upon the Ruling and whether HMRC acted lawfully in asserting that the Ruling was defunct with retrospective effect.
The application also sought to stay the hearing pending the outcome of the appeal to the First-tier Tribunal (Tax). As at the date
of this report, the Group is awaiting confirmation as to whether its application for a judicial review has been accepted.
As previously reported, HMRC has been issuing assessments for periods commencing in March 2018 and as at 31 December 2024,
HMRC has issued assessments totalling €673 million (£557 million) of VAT. The Group expects interest on these assessments to total
€121 million (£100 million) as at 31 December 2024. During the course of 2024 and prior to HMRC issuing its decision letter, in order
to avoid incurring potential interest and penalties, the Group commenced accounting and paying to HMRC, without admission
of liability, VAT on the issuance of Avios in accordance with HMRC’s view. This has resulted in payments, that the Group does not
consider it can recover from its partners, totalling €88 million (£73 million) having been made in the year to 31 December 2024
excluding the aforementioned assessed amounts of €673 million (£557 million).
Of these assessed VAT amounts, the Group expects €260 million (£215 million) to be recoverable as input VAT for certain
subsidiaries of the Group, predominantly by British Airways.
Subsequent to 31 December 2024 and prior to the date of this report, in order to advance the case to the aforementioned First-tier
Tribunal (Tax), the Group paid to HMRC, without admission of liability, the total of the aforementioned VAT of €673 million
(£557 million) that it had not previously paid. The aforementioned interest of €121 million (£100 million) as at 31 December 2024
would be payable only in the event of an adverse judgment against the Group.
In January 2019, the IFRS Interpretations Committee (IFRIC) issued an agenda decision, which states that deposits made to tax
authorities for taxes, other than income tax, for which the entity and the tax authorities are in dispute and in respect of which the
entity considers it more likely than not that the matter will be resolved in its favour, should be recorded as an asset. Accordingly,
for payments made to HMRC for periods prior to its decision letter on 29 October 2024, including the €673 million (£557 million)
paid subsequent to 31 December 2024, are classified as an asset on the Balance sheet.
For payments made to HMRC for periods subsequent to its decision letter on 29 October 2024, the IFRIC agenda decision does not
apply, and while the Group considers it more likely than not that the matter will be resolved in its favour, it is not possible to assert
that such payments are virtually certain of being refundable to the Group and accordingly no asset on the Balance sheet is recognised.
Conclusion and impact on financial statements
The Group, having reviewed HMRC’s decision with its legal and tax advisers, considers it more likely than not that a favourable
outcome from the judicial process will eventuate. Accordingly, for those assessed amounts that the Group had not paid as at
31 December 2024, the Group considers it appropriate not to record any provision for the assessed amounts but to disclose such
amounts as a contingent liability.
For the €88 million (£73 million) paid to HMRC during 2024 prior to HMRC issuing its decision letter on 29 October 2024, the Group
has recorded such amounts within Other non-current assets in the Balance sheet. The €673 million (£557 million) paid to HMRC
subsequent to 31 December 2024 and prior to the date of this report, in relation to the assessed periods, as detailed in note 38,
has also been classified on the same basis as a post balance sheet event.
For payments made to HMRC for periods subsequent to its decision letter on 29 October 2024, it is not possible to assert that such
payments are virtually certain of being refundable to the Group. Accordingly, a proportion of the payments made to HMRC reduce
the amounts, which would have previously been recognised within Deferred revenue in the Balance sheet upon issuance of the Avios
and subsequently within Passenger revenue in the Income statement when the Avios are redeemed.
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International Airlines Group | Annual Report and Accounts 2024
185
11 Earnings per share
€ million
2024
2023
Earnings attributable to equity holders of the parent for basic earnings per share
2,732
2,655
Income statement impact of convertible bonds
185
15
Diluted earnings attributable to equity holders of the parent for diluted earnings per share
2,917
2,670
2024
Number
‘000
2023
Number
‘000
Weighted average number of ordinary shares in issue used for basic earnings per share1
4,903,453 4,932,631
Assumed conversion on convertible bonds
245,944
244,851
Dilutive employee share schemes outstanding
110,261
99,093
Weighted average number of ordinary shares used for diluted earnings per share
5,259,658 5,276,575
€ cents
2024
2023
Basic earnings per share
55.7
53.8
Diluted earnings per share
55.5
50.6
1 Includes 19 million as the weighted average impact for 47,854 thousand treasury shares purchased in the share buyback programme (note 31).
The assumed conversion of the €825 million convertible bond 2028 and outstanding employee share schemes have a dilutive impact
on the earnings per share for the years to 31 December 2024 and 31 December 2023 due to the reported profit after tax for the
respective years.
For information relating to Adjusted earnings per share, refer to the Alternative performance measures section.
12 Dividends
€ million
2024
2023
Cash dividend declared
Interim cash dividend declared for 2024 of €0.03 per share paid in 2024
147
–
Proposed cash dividend
Final dividend for 2024 of €0.06 per share
288
–
The proposed dividend will be distributed from net profit for the year to 31 December 2024.
Proposed dividends on ordinary shares are subject to approval at the annual general meeting and, subject to approval, are recognised
as a liability on that date.
The future dividend capacity of the Group is dependent on the liquidity requirements and the distributable reserves of the Group’s
main operating companies and their capacity to pay dividends to the Company, together with the Company’s distributable reserves
and liquidity.
As at 31 December 2024, the Group had no restrictions on the payment of dividends from the Group’s main operating companies
to the Company, other than for British Airways, which agreed with the Trustee of its main UK defined benefit pension scheme (NAPS)
as part of the triennial valuation as at 31 March 2021 that, subject to the scheme being in technical deficit, any dividends paid to IAG
from 1 January 2024 through to 31 December 2024 will trigger a pension contribution of 50% of the amount of the dividend. For the
period of 1 January 2025 to 30 September 2025, any dividend in excess of 50% of British Airways’ profit after tax will trigger a pension
contribution of 50% of the amount of the dividend in excess of the 50% of profit after tax. At 31 December 2024, NAPS was in
technical surplus, and any dividend that British Airways was to pay to IAG, would not trigger a payment into NAPS unless NAPS
were to move back into technical deficit. Further details on the British Airways dividend restrictions agreed with NAPS are given in
note 34a.
Strategic Report
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Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
186
13 Property, plant and equipment
€ million
Fleet
Property
Equipment
Total
Cost
Balance at 1 January 2023
27,702
2,836
1,400
31,938
Additions
3,543
47
163
3,753
Modification of leases
224
204
1
429
Disposals
(1,360)
(35)
(40)
(1,435)
Reclassifications
(2)
(1)
(7)
(10)
Exchange movements
264
35
15
314
Balance at 31 December 2023
30,371
3,086
1,532
34,989
Additions
2,779
67
240
3,086
Modification of leases
286
110
–
396
Disposals
(871)
(39)
(85)
(995)
Reclassifications
(1)
3
(1)
1
Transfers to Non-current assets held for sale (note 16)
(28)
–
–
(28)
Exchange movements
915
120
52
1,087
Balance at 31 December 2024
33,451
3,347
1,738
38,536
Depreciation and impairment
Balance at 1 January 2023
11,385
1,206
1,001
13,592
Depreciation charge for the year
1,676
122
72
1,870
Disposals
(331)
(34)
(34)
(399)
Exchange movements
121
16
13
150
Balance at 31 December 2023
12,851
1,310
1,052
15,213
Depreciation charge for the year
1,891
152
82
2,125
Disposals
(304)
(35)
(81)
(420)
Modification of leases
(2)
(4)
–
(6)
Reclassifications
(23)
3
(3)
(23)
Exchange movements
423
52
40
515
Balance at 31 December 2024
14,836
1,478
1,090
17,404
Net book values
31 December 2024
18,615
1,869
648
21,132
31 December 2023
17,520
1,776
480
19,776
€ million
Fleet
Property
Equipment
Total
Analysis at 31 December 2024
Owned
10,139
886
441
11,466
Right of use assets (note 14)
7,111
901
6
8,018
Assets under construction (including progress payments)1,2
1,278
78
189
1,545
Assets not in current use
87
4
12
103
Property, plant and equipment
18,615
1,869
648
21,132
Analysis at 31 December 2023
Owned1
8,475
904
328
9,707
Right of use assets (note 14)
7,681
838
15
8,534
Assets under construction (including progress payments)1,2
1,267
34
135
1,436
Assets not in current use
97
–
2
99
Property, plant and equipment
17,520
1,776
480
19,776
1
In 2024 the Group has disclosed assets under construction (previously included within owned assets) in addition to those amounts relating
to progress payments. Accordingly, the prior year figures have been restated by €412 million to conform with the current year presentation.
2 Included in the fleet assets under construction are progress payments of €870 million (2023: €914 million).
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International Airlines Group | Annual Report and Accounts 2024
187
The net book value of property comprises:
€ million
2024
2023
Freehold
485
482
Right of use assets (note 14)
901
838
Long leasehold improvements with a contractual life in excess of 50 years
337
308
Short leasehold improvements with a contractual life of less than 50 years
146
148
Property
1,869
1,776
At 31 December 2024, bank and other loans of the Group are secured on owned fleet assets with a net book value of €5,958 million
(2023: €4,736 million).
14 Leases
Significant accounting judgement applied - Determining the lease term of contracts with renewal and termination options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option
to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised. The Group applies judgement in evaluating whether it is reasonably certain whether or
not to exercise the option to renew or terminate the lease. Such judgement includes consideration of fleet plans, which underpin
approved business plans and historical experience regarding the extension of leases. After the commencement date, the Group
re-assesses the lease term if there is a significant event or change in circumstances that affects the Group’s ability to exercise
or not to exercise the option to renew or to terminate.
a Amounts recognised in the Balance sheet – right of use assets
Property, plant and equipment includes the following amounts relating to right of use assets:
€ million
Fleet
Property
Equipment
Total
Cost
Balance at 1 January 2023
13,750
911
49
14,710
Additions
853
17
–
870
Modifications of leases
224
204
1
429
Disposals
(117)
(5)
(6)
(128)
Reclassifications1
(831)
–
(1)
(832)
Exchange movements
104
13
–
117
31 December 2023
13,983
1,140
43
15,166
Additions
622
11
–
633
Modification of leases
286
110
–
396
Disposals
(131)
(21)
–
(152)
Reclassifications1
(1,240)
–
(32)
(1,272)
Exchange movements
301
46
1
348
31 December 2024
13,821
1,286
12
15,119
Depreciation and impairment
Balance at 1 January 2023
5,757
227
29
6,013
Depreciation charge for the year
996
76
5
1,077
Disposals
(117)
(4)
(6)
(127)
Reclassifications1
(380)
–
–
(380)
Exchange movements
46
3
–
49
31 December 2023
6,302
302
28
6,632
Depreciation charge for the year
1,036
96
2
1,134
Disposals
(128)
(21)
–
(149)
Modification of leases
(2)
(4)
–
(6)
Reclassifications1
(644)
–
(24)
(668)
Exchange movements
146
12
–
158
31 December 2024
6,710
385
6
7,101
Net book value
31 December 2024
7,111
901
6
8,018
31 December 2023
7,681
838
15
8,534
1
Amounts with a net book value of €604 million (2023: €452 million) were reclassified from ROU assets to owned Property, plant and equipment
at the cessation of the respective leases. The assets reclassified relate to leases with purchase options that were grandfathered as ROU assets upon
transition to IFRS 16, for which the Group had been depreciating over the expected useful life of the aircraft, incorporating the purchase option.
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Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
188
b Amounts recognised in the Balance sheet – lease liabilities and asset financed liabilities
The following table provides supplemental information regarding the Group’s total contractual lease obligations, split between
operating and finance leases that are reported within Lease liabilities and those contractual lease arrangements reported as Asset
financed liabilities that do not meet the definition of a lease liability under IFRS. While the distinction between operating and finance
leases is not applied for lessees under IFRS, the table below disaggregates operating and financing leases based on their contractual
definitions and is consistent with the definitions applied for lessors under IFRS. The Group believes that this disaggregation of Lease
liabilities is useful to the users of the financial statements in understanding the financing structure the Group has entered into.
€ million
Operating
leases
Finance
leases
Total lease
liabilities1
Asset
financed
liabilities
Total
1 January 2024
6,460
2,507
8,967
4,427
13,394
Additions
587
–
587
1,473
2,060
Modifications
390
11
401
–
401
Repayments
(1,325)
(887)
(2,212)
(525)
(2,737)
Interest expense
406
79
485
198
683
Disposals
(4)
–
(4)
–
(4)
Exchange movements
392
30
422
215
637
31 December 2024
6,906
1,740
8,646
5,788
14,434
Depreciation expense
922
212
1,134
238
1,372
Interest expense
406
79
485
198
683
Total amounts recorded in the Income statement
1,328
291
1,619
436
2,055
Repayment of principal within financing activities
923
814
1,737
347
2,084
Repayment of interest within operating activities
404
68
472
177
649
Total repayments in the Cash flow statement2,3
1,327
882
2,209
524
2,733
€ million
Operating
leases
Finance
leases
Total lease
liabilities1
Asset
financed
liabilities
Total
1 January 2023
6,204
3,415
9,619
3,819
13,438
Additions
876
–
876
999
1,875
Modifications
422
17
439
–
439
Repayments
(1,274)
(942)
(2,216)
(417)
(2,633)
Interest expense
391
117
508
170
678
Exchange movements
(159)
(100)
(259)
(144)
(403)
31 December 2023
6,460
2,507
8,967
4,427
13,394
Depreciation expense
814
263
1,077
202
1,279
Interest expense
391
117
508
170
678
Total amounts recorded in the Income statement
1,205
380
1,585
372
1,957
Repayment of principal within financing activities
883
848
1,731
264
1,995
Repayment of interest within operating activities
389
83
472
152
624
Total repayments in the Cash flow statement2,3
1,272
931
2,203
416
2,619
1
Upon transition to IFRS 16 on 1 January 2019, all finance leases were grandfathered as Lease liabilities.
2 Includes both the repayment of principal and interest.
3 Excludes cash flows associated with low-value leases and variable lease payments, which the Group does not recognise within lease liabilities.
Interest-bearing long-term borrowings includes the following amount relating to lease liabilities:
€ million
2024
2023
Current
1,477
1,826
Non-current
7,169
7,141
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189
c Amounts recognised in the Income statement
€ million
2024
2023
Amounts not included in the measurement of lease liabilities
Variable lease payments
2
1
Expenses relating to short-term leases
60
24
Amounts expensed as a result of the recognition of ROU assets and lease liabilities
Interest expense on lease liabilities
485
508
Gains arising from sale and leaseback transactions
–
(7)
Depreciation charge for the year
1,134
1,077
d Amounts recognised in the Cash flow statement
The following table details the amounts recognised in the Cash flow statement for the years to 31 December 2024 and 31 December 2023.
€ million
2024
2023
Cash flows arising from transactions giving rise to lease liabilities
Total cash outflows arising from lease liabilities – aircraft
(2,101)
(2,076)
Total cash outflows arising from lease liabilities – other
(108)
(127)
Total cash inflows arising from sale and leaseback transactions – aircraft
567
826
Cash flows arising from transactions that do not give rise to the recognition of lease liabilities
Total cash outflows arising from short-term leases, low-value assets and variable lease payments
(62)
(25)
Total cash inflows arising from the recognition of asset financed liabilities
1,473
999
Total cash outflows arising from asset financed liabilities
(524)
(416)
The Group is exposed to future cash outflows (on an undiscounted basis) at 31 December 2024, for which an amount of €89 million
(2023: €36 million) has been recognised in relation to leases not yet commenced to which the Group is committed.
e Maturity profile of lease liabilities and asset financed liabilities
The following table analyses the Group’s outflows in respect of operating leases, finance leases and asset financed liabilities into
relevant maturity groupings based on the remaining period at 31 December to the contractual maturity date. The amounts disclosed
in the table are the contractual undiscounted cash flows and include interest.
€ million
Operating
leases
Finance
leases
Total lease
liabilities
Asset
financed
liabilities
Total
Within 1 year
1,183
423
1,606
528
2,134
1-2 years
1,139
411
1,550
524
2,074
2-3 years
1,059
332
1,391
529
1,920
3-4 years
911
327
1,238
552
1,790
4-5 years
679
160
839
714
1,553
More than 5 years
4,589
194
4,783
3,901
8,684
31 December 2024
9,560
1,847
11,407
6,748
18,155
€ million
Operating
leases
Finance
leases
Total lease
liabilities
Asset
financed
liabilities
Total
Within 1 year
1,227
941
2,168
471
2,639
1-2 years
1,106
440
1,546
448
1,994
2-3 years
1,023
455
1,478
441
1,919
3-4 years
881
385
1,266
434
1,700
4-5 years
728
326
1,054
442
1,496
More than 5 years
4,679
337
5,016
3,195
8,211
31 December 2023
9,644
2,884
12,528
5,431
17,959
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International Airlines Group | Annual Report and Accounts 2024
190
f Extension options
The Group has certain leases that contain extension options exercisable by the Group prior to the non-cancellable contract period.
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The Group assesses
at lease commencement whether it is reasonably certain to exercise the extension options.
The Group is exposed to future cash outflows (on an undiscounted basis) at 31 December 2024, for which no amount has been
recognised, for potential extension options of €1,115 million (2023: €979 million) due to it not being reasonably certain that these
leases will be extended.
g Lessor accounting
The Group leases out certain of its property, plant and equipment. The Group has classified those leases that transfer substantially all
of the risks and rewards of ownership to the lessee as finance leases and those leases that do not transfer substantially all of the risks
and rewards of ownership to the lessee as operating leases.
Finance leases
Rental income from finance leases recognised by the Group in 2024 was €4 million (2023: €2 million). Rental income is recorded
within Property, IT and other within the Income statement.
The following table sets out a maturity analysis of finance lease receipts, showing the undiscounted lease receipts to be received
after the balance sheet date:
€ million
2024
2023
Within 1 year
4
6
1-2 years
4
5
2-5 years
–
3
More than five years
–
–
Total undiscounted lease receipts
8
14
Less finance income
(4)
(1)
Net investment in finance leases
4
13
15 Capital expenditure commitments
Capital expenditure authorised and contracted but not provided for in the accounts, including outstanding aircraft commitments, at
31 December 2024 amounted to €12,634 million (31 December 2023: €12,706 million). The outstanding aircraft commitments
including the expected delivery timeframes, totalling €11,436 million (2023: €11,966 million), are as follows:
Aircraft future deliveries at 31 December
20241
20231
Airbus A320 (from 2025 to 2029)
47
49
Airbus A321 (from 2025 to 2029)
35
33
Airbus A321XLR (from 2025 to 2026)
11
14
Airbus A350-900 (from 2025 to 2027)
3
2
Airbus A350-1000 (in 2024)
–
1
Boeing 777-9 (from 2027 to 2029)
18
18
Boeing 787-10 (from 2025 to 2027)
7
11
Boeing 737-8200 (from 2026 to 2028)
25
25
Boeing 737-10 (from 2028 to 2029)
25
25
Total
171
178
1
Capital commitments exclude options to purchase additional aircraft.
The majority of these commitments are denominated in US dollars translated at the closing exchange rate at the balance sheet date
and include escalation clauses dependent on the timing of aircraft deliveries. Under the terms of the committed purchase
agreements, the Group is required to make periodic progress payments towards the purchase price, with the commitments above
stated net of progress payments that have been made at the balance sheet date.
The Group has certain rights to defer aircraft deliveries and to cancel commitments in the event of significant delays to aircraft
deliveries caused by the aircraft manufacturers. No such rights had been exercised as at 31 December 2024.
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16 Non-current assets held for sale
As at 31 December 2024, the non-current assets held for sale of €5 million represented one Airbus A320 aircraft. No gain or loss was
recognised on classification as non-current assets held for sale. This aircraft was reported within the Aer Lingus segment and is
expected to exit the business during 2025.
As at 31 December 2023, there were no non-current assets held for sale.
17 Intangible assets and impairment review
a Intangible assets
€ million
Goodwill
Brand
Customer
loyalty
programmes
Landing
rights1
Software
Other
Total2
Cost
Balance at 1 January 2023
595
451
253
1,588
1,806
88
4,781
Additions
–
–
–
–
365
1
366
Disposals
–
–
–
(6)
(49)
–
(55)
Reclassifications
–
–
–
–
23
(15)
8
Exchange movements
1
–
–
11
18
–
30
Balance at 31 December 2023
596
451
253
1,593
2,163
74
5,130
Additions
–
–
–
–
493
1
494
Disposals
–
–
–
–
(69)
–
(69)
Reclassifications
–
–
–
–
(1)
–
(1)
Exchange movements
2
–
–
37
66
–
105
31 December 2024
598
451
253
1,630
2,652
75
5,659
Amortisation and impairment
Balance at 1 January 2023
249
–
–
146
1,169
68
1,632
Amortisation charge for the year
–
–
–
6
185
2
193
Disposals
–
–
–
–
(39)
–
(39)
Exchange movements
–
–
–
1
11
–
12
Balance at 31 December 2023
249
–
–
153
1,326
70
1,798
Amortisation charge for the year
–
–
–
6
225
1
232
Impairment charge for the year
–
–
–
–
7
–
7
Disposals
–
–
–
–
(63)
(1)
(64)
Exchange movements
–
–
–
2
42
–
44
31 December 2024
249
–
–
161
1,537
70
2,017
Net book values
31 December 2024
349
451
253
1,469
1,115
5
3,642
31 December 2023
347
451
253
1,440
837
4
3,332
1
The net book value includes non-UK and non-EU based landing rights of €57 million (2023: €63 million) that have a definite life. The remaining
average life of these landing rights is 11 years.
2 The results for 2023 include a reclassification of ETS allowances from Intangible assets to Carbon-related and other assets. Amounts of €577 million
and €407 million at 1 January 2024 and 1 January 2023, respectively, have been reclassified from Intangible assets. See notes 2 and 4 for further details.
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192
b Impairment review
The carrying amounts of intangible assets with indefinite life and goodwill allocated to cash generating units (CGUs) of the Group are:
€ million
Goodwill
Brand
Customer
loyalty
programmes
Landing
rights
Total
2024
Iberia
1 January and 31 December 2024
–
306
–
423
729
British Airways
1 January 2024
47
–
–
798
845
Exchange movements
2
–
–
35
37
31 December 2024
49
–
–
833
882
Vueling
1 January and 31 December 2024
28
35
–
94
157
Aer Lingus
1 January and 31 December 2024
272
110
–
62
444
IAG Loyalty
1 January and 31 December 2024
–
–
253
–
253
31 December 2024
349
451
253
1,412
2,465
€ million
Goodwill
Brand
Customer
loyalty
programmes
Landing
rights
Total
2023
Iberia
1 January and 31 December 2023
–
306
–
423
729
British Airways
1 January 2023
46
–
–
794
840
Disposals
–
–
–
(6)
(6)
Exchange movements
1
–
–
10
11
31 December 2023
47
–
–
798
845
Vueling
1 January and 31 December 2023
28
35
–
94
157
Aer Lingus
1 January and 31 December 2023
272
110
–
62
444
IAG Loyalty
1 January and 31 December 2023
–
–
253
–
253
31 December 2023
347
451
253
1,377
2,428
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193
Basis for calculating recoverable amounts
The recoverable amounts of the Group’s CGUs have been measured based on their value-in-use, which utilises a weighted average multi-
scenario discounted cash flow model. The details of these scenarios are given in the going concern section of note 2, with a weighting of
70% to the Base Case and 30% to the Downside Case. Cash flow projections are based on the business plans approved by the relevant
operating companies covering a three-year period. Cash flows extrapolated beyond the three-year period are projected to increase
based on long-term growth rates. Cash flow projections are discounted using each CGU’s pre-tax discount rate.
Annually, the relevant operating companies prepare and their respective boards approve three-year business plans, and the IAG
Board approves the Group three-year business plan in the fourth quarter of the year. Adjustments have been made to the final year
of the business plan cash flows to incorporate the impacts of climate change that the Group can reliably estimate at the balance
sheet date. However, given the long-term nature of the Group’s sustainability commitments, there are other aspects of these
commitments that cannot be reliably estimated and, accordingly, have been excluded from the value-in-use calculations (see note
4). The business plan cash flows used in the value-in-use calculations also reflect all restructuring of the business where relevant that
has been approved by the Board and which can be executed by management under existing labour agreements.
Key assumptions
The value-in-use calculations for each CGU reflect the wider economic and geopolitical environments, including updated projected
cash flows for activity from 2025 through to the end of 2027. For each of the Group’s CGUs, the key assumptions used in the value-
in-use calculations are as follows:
2024
Per cent
British
Airways
Iberia
Vueling
Aer Lingus
IAG Loyalty
Operating margin1
12-16
11-13
8-10
8-13
20-21
Average ASK growth per annum1
0-8
2-7
1-8
2-3
n/a
Long-term growth rate
1.8
1.4
1.0
1.3
1.6
Pre-tax discount rate
11.3
11.6
13.7
10.7
15.5
2023
Per cent
British
Airways
Iberia
Vueling
Aer Lingus
IAG Loyalty
Operating margin1
7-14
7-14
4-12
6-14
23
Average ASK growth per annum1
3-9
4-10
1-6
2-16
n/a
Long-term growth rate
1.7
1.5
0.9
1.3
1.5
Pre-tax discount rate
11.2
12.2
14.3
10.9
14.8
1
Operating margin and average ASK growth per annum are stated as the weighted average derived from the multi-scenario discounted cash flow model.
Jet fuel price ($ per MT)
Within 12
months
1-2 years
2-3 years
3 years and
thereafter
2024
704
715
717
717
2023
895
829
800
800
Forecast ASKs in the current year modelling represent the range of average annual increases in capacity over the forecast period,
based on planned network growth and taking into account management’s expectation of the market.
The long-term growth rate is calculated for each CGU, considering a number of data points: (i) industry publications; (ii) forecast
weighted average exposure in each primary market using gross domestic product (GDP); and (iii) internal analysis regarding the
long-term changes in consumer preferences and the effects on demand from the increased costs to the Group of climate change.
The calculation of the long-term growth rate utilises a Base Case and a Downside Case growth rate, which is then weighted on the
same basis as the cash flows detailed above of 70% to the Base Case and 30% to the Downside Case. The terminal value cash flows
and long-term growth rate incorporate the impacts of climate change insofar as they can be determined (see note 4). The airlines’
network plans and the IAG Loyalty forecasts are reviewed annually as part of the three-year business plan preparation and reflect
management’s plans in response to specific market risk or opportunity.
Pre-tax discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time value
of money and underlying risks of its primary market. The discount rate calculations are based on the circumstances of the airline industry,
the loyalty scheme industry, the Group and the CGU. These rates are derived from the weighted average cost of capital (WACC). The
WACC takes into consideration both debt and equity available to airlines and loyalty schemes. The cost of equity is derived from the
expected return on investment by airline and loyalty scheme investors and the cost of debt is derived from both market data and industry
gearing levels derived from comparable companies. CGU-specific risk is incorporated by applying individual beta factors, which are
evaluated annually based on available market data. The pre-tax discount rate reflects the timing of future tax flows. The Group engages
an external valuation expert as at the valuation date to assist in the determination of the post-tax discount rate.
Jet fuel price assumptions are derived from forward price curves in the fourth quarter of each year and sourced externally from
readily available market data at the valuation date. The cash flow forecasts reflect these price increases after taking into
consideration the level of fuel derivatives and their associated prices that the Group has in place and the incremental price
differentials expected for the purchase of SAF.
As detailed above, the Group adjusts the final year of the three-year business plans to incorporate the medium-term impacts of
climate change from the Group’s Flightpath net zero climate strategy through to 2030. These adjustments include the following key
assumptions: (i) a 10% level of SAF consumption out of the overall fuel mix with an assumed price of €7,000 per metric tonne; (ii) a
kerosene tax of €526 per metric tonne on all intra-EU flights; (iii) for costs of carbon, prices of €120, €120, €179 and €42 for EU ETS
allowances, Swiss ETS allowances, UK ETS allowances and CORSIA allowances, respectively, per tonne of CO2 equivalents emitted;
and (iv) the removal of all free ETS and CORSIA allowances.
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International Airlines Group | Annual Report and Accounts 2024
194
Summary of results
At 31 December 2024 and 31 December 2023 management reviewed the recoverable amount of each of the CGUs and concluded
the recoverable amounts exceeded the carrying values.
Reasonably possible changes in key assumptions, both individually and in combination, have been considered for each CGU, where
applicable, which include reducing the operating margin by 2 percentage points in each year, reducing ASKs by 5 percentage points
in each year, reducing long-term growth rates in the terminal value calculation to zero, increasing pre-tax discount rates by 2.5
percentage points and increasing the fuel price (both jet fuel and SAF) by 40%, both with cost recovery consistent with that
experienced historically and with no assumed cost recovery. Given the inherent uncertainty associated with the impact of climate
change, these sensitivities represent a reasonably possible impact of climate change on the CGUs greater than that included in the
impairment models.
For the British Airways, Iberia, Vueling and Aer Lingus CGUs, while the recoverable amounts are estimated to exceed the carrying
amounts by €17,647 million, €6,130 million, €2,300 million and €1,490 million (2023: €15,752 million, €4,736 million, €1,271 million and
€1,884 million), respectively, the recoverable amounts would be equal the carrying amounts when applying reasonably possible but
not probable changes, over the forecast period, in assumptions in each of the following scenarios:
• British Airways: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 32% (2023: 24%); and
(ii) if the fuel price had been 41% (2023: 29%) higher without cost recovery;
• Iberia: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 32% (2023: 21%); and (ii) if the
fuel price had been 35% (2023: 24%) higher without cost recovery;
• Vueling: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 30% (2023: 12%); and (ii) if the
fuel price had been 37% (2023: 18%) higher without cost recovery; and
• Aer Lingus: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 13% (2023: 16%); and (ii)
if the fuel price had been 21% (2023: 23%) higher without cost recovery.
For the remainder of the reasonably possible changes in key assumptions applied to the British Airways, Iberia, Vueling and Aer
Lingus CGUs and for all the reasonably possible changes in key assumptions applied to the IAG Loyalty CGU, no impairment arises.
18 Investments
a Investments in subsidiaries
The Group’s subsidiaries at 31 December 2024 are listed in the Group investments section.
All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held
directly do not differ from the proportion of ordinary shares held. There have been no significant changes in ownership interests of
subsidiaries during the year.
The total non-controlling interest at 31 December 2024 is €6 million (2023: €6 million).
b Investments in associates and joint ventures
The share of assets, liabilities, revenue and profit of the Group’s associates and joint ventures, which are included in the Group’s
financial statements, are as follows:
€ million
2024
2023
Total assets
166
166
Total liabilities
(127)
(119)
Revenue
96
107
Profit for the year
–
6
The detail of the movement in investment in associates and joint ventures is shown as follows:
€ million
2024
2023
At beginning of year
47
43
Additions
1
–
Share of retained profits
–
6
Dividends received
(5)
(2)
Exchange movements
1
–
44
47
At 31 December 2024 there are no restrictions on the ability of associates or joint ventures to transfer funds to the parent, and there
are no related contingent liabilities.
At both 31 December 2024 and 31 December 2023, the investment in Sociedad Conjunta para la Emisión y Gestión de Medios de
Pago EFC, S.A. exceeded 50% ownership by the Group (50.5%). The entity is treated as a joint venture as decisions regarding its
strategy and operations require the unanimous consent of the parties who share control, including IAG.
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19 Other equity investments
Significant accounting judgement applied – Determining whether the Group has significant influence over Air Europa Holdings
The Group applies judgement in the determination as to whether it has the power with which to participate in the decision-
making of, and as a result significant influence over, Air Europa Holdings, S.L. (Air Europa Holdings). Such judgement includes
the consideration as to the ability of the Group to: have representation on the board of Air Europa Holdings; participate in the
policy-making processes, including participation in decisions regarding dividends and other distributions; the existence of
material transactions between Air Europa Holdings and the Group; and enable the interchange of management personnel and
provide essential technical information.
In forming its judgement, the Group notes that: it does not have the ability to have representation on the board of Air Europa
Holdings; it does not have the ability to participate in the policy-making processes; it has not entered into material transactions
outside of the normal course of business, with those transactions arising in the normal course of business being immaterial in nature;
it does not have the ability to enable the interchange of management personnel; and it does not have the ability to provide essential
technical information. The Group has, therefore, concluded that it does not have significant influence over Air Europa Holdings.
Accordingly, the Group accounts for its shareholding in Air Europa Holdings as an Other equity investment and measures
it at fair value through Other comprehensive income. Had the Group concluded that it does have significant influence over
Air Europa Holdings, then the shareholding would have been classified as an associate, measured at cost on inception and
subsequently measured using the equity method.
Other equity investments include the following:
€ million
2024
2023
Unlisted securities
190
188
190
188
The credit relating to Other equity investments was €7 million (2023: credit of €3 million).
Investment in Air Europa Holdings
On 15 June 2022, the Group entered into a financing arrangement with Globalia Corporación Empresarial, S,A, (‘Globalia’), whereby,
the Group provided a €100 million seven-year unsecured loan, which was convertible for a period of two years from inception into
a fixed number of the shares of Air Europa Holdings, a wholly owned subsidiary of Globalia. Subsequently, on 16 August 2022, the
Group exercised its exchange option with Globalia and converted the aforementioned loan into an investment in 20% of the share
capital of Air Europa Holdings, which is recorded as an Other equity investment.
On 23 February 2023, the Group entered into an agreement to acquire the remaining 80% of the share capital of Air Europa
Holdings that it had not previously owned. On 1 August 2024 the Group withdrew from the agreement. Up until the Group withdrew
from the agreement, the recognition criteria of IFRS 3 Business combinations had not been met.
As a result of the Group withdrawing from the agreement with Globalia, the Group was required to pay a break-fee to Globalia
of €50 million, which has been recognised as a charge to Other non-operating credits (note 3).
At 31 December 2024, the fair value of the investment in Air Europa Holdings was €139 million, representing an increase of
€10 million from the €129 million recorded at 31 December 2023, with the fair value movement having been recorded within
Other comprehensive income.
The Group, with its external valuation advisors, determined the fair value of the investment in Air Europa Holdings at 31 December
2024 using the market comparison approach (31 December 2023, both the market comparison approach and the income approach),
whereby the Group used both observable market data and unobservable inputs. The fair value was determined based on market-
multiples derived from quoted prices of comparable airline companies to Air Europa Holdings. These quoted prices were
subsequently adjusted for the effect of the non-marketability of the equity held and the revenue and EBITDA of Air Europa Holdings.
The range of market-multiples applied in determining the fair value of the investment in Air Europa Holdings at 31 December 2024
was between 1 and 6.
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196
20 Trade and other receivables
€ million
2024
20231
Amounts falling due within one year
Trade receivables
1,885
1,673
Provision for expected credit loss
(111)
(114)
Net trade receivables
1,774
1,559
Prepayments
887
750
Accrued income2
511
495
Carbon-related assets1,3
323
247
Other non-trade receivables
615
329
Carbon-related and other current assets
2,336
1,821
Amounts falling due after one year
Prepayments
515
401
Accrued income2
10
9
Carbon-related assets1,3
275
330
Other non-trade receivables
116
22
Carbon-related and other assets due after one year
916
762
1
For the year ended 31 December 2024, the Group has elected to present carbon-related assets as a component of Carbon-related and other assets
having previously presented such amounts within Intangible assets. Accordingly figures for the comparative year to 31 December 2023 have been
reclassified to conform with the current year presentation.
2 The accrued income balance (representing contract assets) predominantly relates to revenue earned from ongoing maintenance and overhaul
services, where the balances vary depending on the number of ongoing activities at the balance sheet date.
3 The disaggregation of Carbon-related assets by underlying scheme is presented in note 4f.
Movements in the provision for expected credit loss were as follows:
€ million
2024
2023
At beginning of year
114
114
Provided during the year
6
4
Released during the year
(4)
(3)
Receivables written off during the year
(7)
(1)
Exchange movements
2
–
111
114
Trade receivables are generally non-interest-bearing and on 30-day terms (2023: 30 days).
The credit risk exposure on the Group’s trade receivables is set out below:
31 December 2024
€ million
Current
<30 days
30-180 days
180-365 days
> 365 days
Trade receivables
1,224
188
284
49
140
Expected credit loss rate
0.1%
0.1%
0.7%
6.1%
75.7%
Provision for expected credit loss
–
–
2
3
106
31 December 2023
€ million
Current
<30 days
30-180 days
180-365 days
> 365 days
Trade receivables
959
296
241
53
124
Expected credit loss rate
0.1%
0.1%
1.7%
7.5%
85.2%
Provision for expected credit loss
–
–
4
4
106
21 Inventories
€ million
2024
2023
Engineering expendables
534
417
Catering consumables
44
43
Other inventories
39
34
617
494
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22 Cash, cash equivalents and other current interest-bearing deposits
a Cash
€ million
2024
2023
Cash at bank and in hand
2,975
1,531
Short-term deposits maturing within three months
5,214
3,910
Cash and cash equivalents
8,189
5,441
Current interest-bearing deposits maturing after three months
1,639
1,396
Cash, cash equivalents and other interest-bearing deposits
9,828
6,837
Cash at bank is primarily held in AAA money market funds and bank deposits. Short-term deposits are for periods up to three
months and earn interest based on the floating deposit rates.
At 31 December 2024, the Group had no outstanding bank overdrafts (2023: €nil).
Current interest-bearing deposits have maturities in excess of three months and typically within 12 months of the balance sheet date
and earn interest based on the market rates available at the time the deposit was made.
At 31 December 2024, Aer Lingus held €29 million of restricted cash (2023: €31 million) in interest-bearing deposits maturing after
more than three months to be used for employee-related obligations.
b Net debt
Movements in net debt were as follows:
€ million
Balance at 1
January 2024
Cash flows
Exchange
movements
New leases and
modifications
Other items
Balance at 31
December
2024
Bank, other loans, convertible bond and asset
financed liabilities
7,115
1,064
217
–
303
8,699
Lease liabilities
8,967
(1,737)
422
988
6
8,646
Cash and cash equivalents
(5,441)
(2,695)
(53)
–
–
(8,189)
Current interest-bearing deposits
(1,396)
(215)
(28)
–
–
(1,639)
9,245
(3,583)
558
988
309
7,517
€ million
Balance at 1
January 2023
Cash flows
Exchange
movements
New leases and
modifications
Other items
Balance at 31
December
2023
Bank, other loans, convertible bond and asset
financed liabilities
10,365
(3,267)
(102)
–
119
7,115
Lease liabilities
9,619
(1,731)
(259)
1,315
23
8,967
Cash and cash equivalents
(9,196)
3,753
2
–
–
(5,441)
Current interest-bearing deposits
(403)
(985)
(8)
–
–
(1,396)
10,385
(2,230)
(367)
1,315
142
9,245
23 Trade and other payables
€ million
2024
2023
Trade creditors
3,350
3,177
Other creditors
1,481
1,244
Other taxation and social security
280
262
Accruals
847
683
Deferred income relating to non-flight activity
191
224
6,149
5,590
Average payment days to suppliers – Spanish Group companies
Days
2024
2023
Average payment days for payment to suppliers
25
25
Ratio of transactions paid
26
25
Ratio of transactions outstanding for payment
19
17
€ million
2024
2023
Total payments made
9,606
10,966
Total payments outstanding
152
158
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Sustainability Statement
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International Airlines Group | Annual Report and Accounts 2024
198
Information on invoices paid in a period shorter than the maximum period established in the late payment regulations – Spanish
Group companies
2024
2023
Total payments made (€ million)
8,523
10,002
Percentage share of total payments to suppliers
89%
91%
Number of invoices paid (thousand)
218
213
Percentage share of total number of invoices paid
77%
76%
24 Deferred revenue
Significant accounting estimates applied - Revenue recognition: breakage assumptions applied to passenger revenue,
customer loyalty programmes and unredeemed vouchers
At 31 December 2024 the Group recognised €8,536 million (2023: €8,023 million) in respect of deferred revenue of which
€2,888 million (2023: €2,712 million) related to customer loyalty programmes.
Passenger revenue
Passenger revenue is recognised when the transportation service is provided. At the time of intended transportation, revenue
is also recognised in respect of estimated unused tickets breakage and is estimated based on the terms and conditions of the
tickets and historical experience. The Group considers that there is no reasonably possible change to unused ticket assumptions
that would have a material impact on passenger revenue recorded in the year. A two percentage point increase in the level
of unused ticket breakage of the sales in advance of carriage balance (excluding vouchers) at 31 December 2024 would result
in an adjustment to Deferred revenue of €101 million (2023: €93 million), with an offsetting adjustment to increase revenue and
operating profit recognised in the year.
Customer loyalty schemes
Revenue associated with the issuance of Avios under customer loyalty programmes is based on the relative standalone selling
prices of the related performance obligations (brand, marketing and Avios), determined using estimation techniques. The
transaction price of brand and marketing services is determined using specific brand valuation methodologies. The transaction
price of an Avios is determined as the price of the rewards against which they can be redeemed and is reduced to take account
of the proportion of Avios that are not expected to be redeemed by customers.
The Group estimates the number of Avios not expected to be redeemed using statistical modelling based on historical
experience and expected future trends in customer behaviour. The Group considers historical redemption activity representative
of long-term behavioural trends. A five percentage point increase in the assumption of Avios not expected to be redeemed
would result in an adjustment to Deferred revenue of €99 million (2023: €94 million), with an offsetting adjustment to increase
revenue and operating profit recognised in the year.
Unredeemed vouchers liability
At 31 December 2024, the Group recognised €587 million in respect of unredeemed vouchers, including associated taxes (2023:
€645 million) within Deferred revenue. Of the €587 million, €100 million (2023: €139 million) relates to vouchers issued due to
COVID-19 pandemic flight cancellations, referred to as ‘disrupted flights’ and €487 million (2023: €506 million) relates to non-
disrupted voucher issuance, such as the British Airways ‘Book with Confidence’ policy (where customers were provided the
flexibility to change their destination and/or date of travel on non-disrupted flights), certain other flexible fare options, non-air
partner companion vouchers and gift vouchers.
The jurisdiction in which a voucher is issued dictates the period over which a customer can redeem the voucher, which ranges
up to six years from the point of issuance. This period of time is also influenced by whether the voucher was issued for disrupted
flights or non-disrupted issuance and whether statutory or commercial expiry policies prevail. The Group expects the majority
of the total voucher liability to mature within 12 months of the balance sheet date.
Historically, where a voucher has been issued to a customer in the event of a flight cancellation, the Group estimated, based
on historical experience, the level of such vouchers not expected to be used prior to expiry and recognised revenue accordingly.
During 2020 and 2021, due to the significant level of flight cancellations arising from the COVID-19 pandemic, the Group issued
a greater volume of vouchers than it would have otherwise done. In addition, given the uncertainty as to the timing of customers
redeeming these vouchers, the Group was unable to estimate with a high degree of probability that there would not be a significant
reversal of revenue in the future had it applied the historical expiry trends over the period of the pandemic. Accordingly, for the
years to 31 December 2022, 31 December 2021 and 31 December 2020, the Group did not recognise revenue arising from those
vouchers issued due to COVID-19 pandemic-related cancellations until either the voucher was redeemed or it expired.
During 2024 and 2023, the Group considered historical redemption activity, including customers’ more recent behaviours
following the COVID-19 pandemic, representative of the redemption trends expected through to expiry of the vouchers, such
that the Group considers that the risk of a significant reversal of revenue to be sufficiently low. Accordingly, the Group has
updated its estimated level of redemption activity to incorporate current customer behaviour.
A five percentage point increase in the assumption of the number of vouchers outstanding at 31 December 2024 and not
expected to be redeemed prior to expiry would result in a reduction to Deferred revenue of €29 million (2023: €32 million),
with an offsetting adjustment to increase Passenger revenue and Operating profit recognised in the year.
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International Airlines Group | Annual Report and Accounts 2024
199
€ million
Customer
loyalty
programmes
Sales in
advance of
carriage
Total
Balance at 1 January 2024
2,712
5,311
8,023
Cash received from customers1
–
26,241
26,241
Revenue recognised in the Income statement2, 3
(1,397)
(26,248)
(27,645)
Financing charge recognised in the Income statement
13
–
13
Loyalty points issued to customers4
1,453
207
1,660
Exchange movements
107
137
244
Balance at 31 December 2024
2,888
5,648
8,536
Analysis:
Current
2,685
5,648
8,333
Non-current
203
–
203
2,888
5,648
8,536
€ million
Customer
loyalty
programmes
Sales in
advance of
carriage5
Total
Balance at 1 January 2023
2,630
5,014
7,644
Cash received from customers1, 5
–
24,405
24,405
Revenue recognised in the Income statement2, 3, 5
(1,052)
(24,313)
(25,365)
Financing charge recognised in the Income statement
15
–
15
Loyalty points issued to customers4
1,085
161
1,246
Exchange movements
34
44
78
Balance at 31 December 2023
2,712
5,311
8,023
Analysis:
Current
2,455
5,311
7,766
Non-current
257
–
257
2,712
5,311
8,023
1
Cash received from customers is net of refunds.
2 Where the Group acts as an agent in the provision of redemption products and services to customers through loyalty programmes, or in the
provision of interline flights to passengers, revenue is recognised in the Income statement net of the related costs.
3 Included within revenue recognised in the Income statement during 2024 is an amount of €4,924 million previously held as deferred revenue
at 1 January 2024 (recognised during 2023 and previously held as deferred revenue at 1 January 2023: €3,914 million).
4 Included within loyalty points issued to customers at 31 December 2024 is an amount of €207 million (31 December 2023: €161 million) classified
within Sales in advance of carriage representing the cash component of the consideration paid by customers, where such consideration comprises
both cash and the redemption of Avios.
5 The 2023 figures include a restatement to increase both Cash received from customers and Revenue recognised in the Income statement by
€3,298 million. There is no change to total deferred revenue.
The unsatisfied performance obligation under the Group’s customer loyalty programmes that is classified as non-current was
€203 million at 31 December 2024 (31 December 2023: €241 million), all of which is expected to be recognised as revenue within
one to five years from the balance sheet date.
Deferred revenue relating to customer loyalty programmes consists primarily of consideration allocated to performance obligations
associated with Avios. Avios are issued by the Group’s airlines through their loyalty programmes, or are sold to third parties such
as credit card providers, who issue them as part of their loyalty programmes. While Avios do not have an expiry date and can be
redeemed at any time in the future, a customer’s membership account is closed if there is a period of 36 months of inactivity in
terms of both issuances and redemptions. Revenue may, therefore, be recognised at any time in the future.
25 Other long-term liabilities
€ million
2024
2023
Non-current other creditors
343
164
Accruals and deferred income
58
55
401
219
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Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
200
26 Long-term borrowings
a Total borrowings
2024
2023
€ million
Current
Non-current
Total
Current
Non-current
Total
Bank and other loans1
601
1,294
1,895
113
1,840
1,953
Convertible bond1
1,016
–
1,016
735
–
735
Asset financed liabilities
381
5,407
5,788
303
4,124
4,427
Lease liabilities
1,477
7,169
8,646
1,826
7,141
8,967
Interest-bearing long-term borrowings
3,475
13,870
17,345
2,977
13,105
16,082
1
The 31 December 2023 total borrowings include a reclassification to conform with the current basis of presentation, where the non-current portion
of the 2028 convertible bond, amounting to €726 million at 31 December 2023, has been reclassified as a current liability. Further information is given
in notes 1 and 19.
Long-term borrowings of the Group amounting to €5,853 million (31 December 2023: €4,516 million) are secured on owned fleet
assets with a net book value of €5,958 million (31 December 2023: €4,736 million). All asset financed liabilities, included in long-term
borrowings, are all secured on the associated aircraft or other property, plant and equipment.
b Bank, other loans and convertible bond
€ million
2024
2023
€825 million fixed rate 1.125% convertible bond 20281
1,016
735
€700 million fixed rate 3.75% unsecured bond 20292
718
717
€500 million fixed rate 2.75% unsecured bond 20252
510
510
€500 million fixed rate 1.50% bond 20273
501
500
Floating rate euro mortgage loans secured on aircraft4
66
114
Fixed rate secured bonds5
56
56
Fixed rate unsecured US dollar mortgage loan6
35
46
Fixed rate unsecured euro loans with the Spanish State (Department of Industry)7
9
10
Total bank, other loans and convertible bond
2,911
2,688
Less: current instalments due on bank, other loans and convertible bond
(1,617)
(848)
Total non-current bank, other loans and convertible bond
1,294
1,840
1
See details of the 2028 convertible bond below.
2 On 25 March 2021, the Group issued two tranches of senior unsecured bonds for an aggregate principal amount of €1.2 billion, €500 million due
25 March 2025 and €700 million due 25 March 2029. The bonds bear a fixed rate of interest of 2.75% and 3.75% per annum, payable in arrears,
respectively. The bonds were issued at 100% of their principal amount, respectively, and, unless previously redeemed or purchased and cancelled,
will be redeemed at 100% of their principal amount on their respective maturity dates.
3 In July 2019, the Group issued two tranches of senior unsecured bonds for an aggregate principal amount of €1 billion, €500 million due 4 July 2023
and €500 million due 4 July 2027. The 2023 bond bore a fixed rate of interest of 0.5% per annum and was redeemed in full at maturity on 4 July
2023. The 2027 bond bears a fixed rate of interest of 1.5% per annum annually payable in arrears. The 2027 bond was issued at 98.803% of its
principal amount, and, unless previously redeemed or purchased and cancelled, will be redeemed at 100% of its principal amount on its maturity date.
4 Floating rate euro mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 4.34% and 4.52%. The loans are
repayable in 2027.
5 Fixed rate secured bonds with 3.75% coupon repayable in 2027.
6 Fixed rate unsecured US dollar mortgage loan bearing interest between 1.38% and 2.86%. The loan is repayable between 2025 and 2026.
7 Fixed rate unsecured euro loans with the Spanish State (Department of Industry) bear nil interest and are repayable in 2031.
In addition, on 14 June 2024, the Group entered into a five-year $3.0 billion, sustainability-linked, secured Revolving Credit Facility,
with two one-year extension options available subject to the approval of lenders, accessible by British Airways, Iberia and Aer
Lingus, each of which has separate limits. At 31 December 2024 no amounts had been drawn under the facility. While the Group
does not forecast drawing down on the Revolving Credit Facility, should it do so, the resultant debt would be secured, in the
respective operating companies, against: (i) specific landing rights; or (ii) aircraft; or (iii) or a combination of both. Concurrent
to entering into the facility, the Group extinguished its $1,755 million secured Revolving Credit Facility, which was due to mature,
in part, in March 2025, with the remainder maturing in March 2026.
On 28 June 2024, as a result of securing the aforementioned Revolving Credit Facility, British Airways extinguished its two
£1.0 billion Export Development Guarantee Facilities that were partially guaranteed by the UK Export Finance, which were undrawn
at the time of extinguishment and were due to mature in equal amounts in November 2026 and September 2028.
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201
Details of the 2028 convertible bond
On 11 May 2021, the Group issued the €825 million fixed rate 1.125% senior unsecured bond convertible into ordinary shares of IAG.
The convertible bond raised net proceeds of €818 million and matures in 2028. The Group holds an option to redeem the convertible
bond at its principal amount, together with accrued interest, no earlier than two years prior to the final maturity date.
The convertible bond provides bondholders with dividend protection and included a total of 244,850,715 options at inception and
following the 2024 interim dividend, includes 248,269,636 options at 31 December 2024 to convert into ordinary shares of IAG.
The Group also holds an option to redeem the convertible bond, in full or in part, in cash in the event that bondholders exercise their
right to convert the bond into ordinary shares of IAG. The bondholders conversion right is currently exercisable.
The convertible bond is recorded at its fair value, which at 31 December 2024 was €1,016 million (2023: €735 million), representing
an increase of €281 million since 1 January 2024. Of this increase, the charge recorded in Other comprehensive income arising from
credit risk of the convertible bonds was €44 million and a charge recorded within Finance costs in the Income statement attributable
to changes in market conditions of €237 million.
Transactions with unconsolidated entities
The Group has entered into asset financing transactions with unconsolidated entities as follows:
• the British Airways Pass Through Certificates, Series 2019-1 were entered into in the third quarter of 2019, recognising Asset
financed liabilities of €725 million for eight aircraft that mature between 2029 and 2034;
• the British Airways Pass Through Certificates, Series 2020-1 were entered into in the fourth quarter of 2020, recognising Asset
financed liabilities of €472 million for nine aircraft that mature between 2028 and 2032;
• the British Airways Pass Through Certificates, Series 2021-1 were entered into in the third quarter of 2021, recognising Asset
financed liabilities of €204 million for seven aircraft that mature between 2031 and 2035;
• the Iberia Pass Through Certificates, Series 2022-1 were entered into in April 2022, recognising Asset financed liabilities of €680
million for five aircraft that mature between 2032 and 2036;
• the British Airways Pass Through Certificates, Series 2022-1 were entered into in October 2022, recognising Asset financed
liabilities of €159 million for four aircraft that mature between 2032 and 2036; and
• there have been no asset financing transactions with unconsolidated entities during the years to 31 December 2024 and
31 December 2023.
As at 31 December 2024, Asset financed liabilities include cumulative amounts of €2,956 million (2023: €2,948 million) and the
associated assets recorded within Property, plant and equipment include cumulative amounts of €2,076 million (2023: €2,757
million) associated with transactions with unconsolidated structured entities having issued EETCs.
c Total loans, convertible bond, asset financed liabilities and lease liabilities
Million
2024
2023
Loans
Bank:
US dollar
$38
$50
Euro
€75
€124
€110
€170
Fixed rate bonds:
Euro
€1,785
€1,783
€1,785
€1,783
Convertible bond
Euro
€1,016
€735
€1,016
€735
Asset financed liabilities
US dollar
$3,977
$3,849
Euro
€1,730
€746
Japanese yen
¥35,051
¥28,432
€5,788
€4,427
Lease liabilities
US dollar
$6,873
$7,399
Euro
€799
€1,008
Japanese yen
¥58,881
¥68,998
Pound sterling
£696
£690
€8,646
€8,967
Total interest-bearing borrowings
€17,345
€16,082
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Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
202
27 Provisions
Significant accounting estimate applied – Restoration and handback provisions: key assumptions underlying the carrying
value of the provisions
At 31 December 2024, the Group recognised €3,014 million in respect of maintenance, restoration and handback provisions,
principally in respect of leased aircraft (31 December 2023: €2,529 million).
The Group has a number of contracts with service providers to replace or repair engine parts and for other maintenance checks.
These agreements are complex and generally cover a number of years. Provisions for maintenance, restoration and handback
are made based on the best estimate of the likely committed cash outflow. In determining this best estimate, the Group applies
significant judgement as to the level of forecast costs expected to be incurred when the major maintenance event occurs.
Other assumptions not considered to be significant include aircraft utilisation, expected maintenance intervals and the aircraft’s
condition. The associated forecast costs are discounted to their present value. While the Group considers that there are no
reasonably possible changes to any of the individual assumptions that would have a material impact on the provisions, a
combination of changes in several assumptions may. The Group considers that a reasonably possible change in the inflation rate
and discount rate assumptions of a 100 basis point increase would give rise to an increase of €62 million (2023: €53 million) and
a decrease of €70 million (2023: €59 million), respectively, in the provisions balance when applied in isolation to one another.
Significant accounting judgement applied – Restoration and handback provisions: determination of accounting policy for
leased aircraft
IFRS 16 does not address the accounting for maintenance, restoration and handback provisions that arise through the usage
of the underlying asset and, accordingly, the Group has applied judgement in applying an accounting policy with regard to the
recognition and subsequent measurement of such provisions for leased aircraft. The Group’s accounting policy for provisions
that arise through usage or through the passage of time is to recognise the associated estimated costs in the Income statement
as the underlying asset is used or through the passage of time. The approach applied by the Group is consistent with the
majority of major airlines that prepare their financial statements under IFRS. Were the Group to apply an alternative accounting
policy, the financial impact would be materially different at the balance sheet date. An alternative accounting policy that the
Group could have applied was the components approach, where the Group would capitalise the estimated costs of major
maintenance events and depreciate them until the subsequent maintenance event (or to the end of lease term) and providing
over the lease term for any expected cash compensation for maintenance obligations at the end of the lease. The Group
considers that the current accounting policy for maintenance, restoration and handback activities reflects the obligations under
its lease arrangements.
€ million
Restoration
and handback
provisions
Restructuring
provisions
Employee
leaving
indemnities
and other
employee
related
provisions
Legal claims
and
contractual
disputes
provisions
Carbon-
related
obligations1
Other
provisions
Total
Net book value 1 January 2024
2,529
94
735
82
247
53
3,740
Provisions recorded during the year
609
162
34
26
314
32
1,177
Reclassifications
(18)
–
–
1
–
–
(17)
Utilised during the year
(276)
(39)
(42)
(22)
–
(32)
(411)
Extinguished during the year
–
–
–
–
(236)
–
(236)
Release of unused amounts
(97)
(18)
–
(14)
(13)
–
(142)
Unwinding of discount
107
1
22
–
–
–
130
Remeasurements
20
–
93
–
–
–
113
Exchange differences
140
1
–
2
4
–
147
Net book value 31 December 2024
3,014
201
842
75
316
53
4,501
Analysis:
Current
691
63
85
45
307
8
1,199
Non-current
2,323
138
757
30
9
45
3,302
3,014
201
842
75
316
53
4,501
1
The disaggregation of Carbon-related obligations by underlying scheme is presented in note 4f.
Restoration and handback provisions
Provisions for restoration and handback costs are recognised to meet the contractual major maintenance and return conditions on
aircraft held under lease. For those obligations arising on inception of an aircraft lease, the associated estimated cost is capitalised
within the ROU asset. For those obligations that arise through usage or through the passage of time, the associated estimated costs
are recognised in the Income statement as the associated asset is used or through the passage of time. The provision is long-term
in nature, typically covering the leased asset term, which for aircraft is up to 12 years.
The provisions also include an amount relating to leased land and buildings where restoration costs are contractually required at the
end of the lease. Such costs are capitalised within ROU assets.
The provisions are determined by discounting the future cash flows using pre-tax risk-free rates specific to the tenor of the provision
and the currency in which it arises. The unwinding of the discounting of the provisions is recorded as a Finance cost in the Income
statement (see note 9a).
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203
Remeasurements arising from changes in estimates relating to the effects of both discounting and inflation are recorded in the
Income statement to the extent they relate to avoidable provisions or are recorded as an adjustment to the right of use asset
(see note 14) for those unavoidable provisions.
Where amounts are finalised and the uncertainty relating to these provisions removed, the associated liability is reclassified to either
current or non-current Other creditors, dependent on the expected timing of settlement.
Restructuring provisions
The restructuring provision includes provisions for voluntary redundancies including the collective redundancy programme for
Iberia's Transformation Plan implemented prior to 2023 and Iberia’s ground handling restructuring programme implemented in 2024,
which provides for payments to affected employees until they reach the statutory retirement age. The amounts provided for have
been determined by actuarial valuations made by independent actuaries and were based on the same assumptions as those made
to determine the provisions for obligations to flight crew below, with the exception of the discount rate, which in this case was 3.2%
and 2.7%, respectively. The payments related to these provisions are expected to continue through to 2032.
At 31 December 2024, €199 million of this provision related to collective redundancy programmes (2023: €88 million).
Employee leaving indemnities and other employee related provisions
This provision includes employee leaving indemnities relating to staff under various contractual arrangements. As part of these
provisions, the Group recognises provisions relating to the Iberia flight crew (both pilots and cabin crew):
• pilots – under the relevant collective bargaining agreement, pilots have the option at the age of 60 to elect to: continue in full-time
employment; being placed on reserve and retaining their employment relationship until reaching the statutory retirement age
(referred to as ‘active’); or, alternatively, taking early retirement (referred to as ‘inactive’). Additionally, and in certain cases, those
pilots from the age of 55, may apply for retaining their employment relationship, but with reduced activity (referred to as ‘special
leave’); and
• cabin crew – under the relevant collective bargaining agreement, cabin crew have the option at the age of 62 to elect to: continue
in full-time employment; being transferred to active status; or being transferred to inactive status. Additionally, and in certain
cases, cabin crew employees from the age of 57, may apply for ‘special leave’.
The Group is required to remunerate these employees until they reach the statutory retirement age. In determining the provision
to be recognised for the proportion of employees that will elect either special leave or to be inactive, the Group estimates a number
of financial assumptions, including, but not limited to: (i) medium- to long-term salary growth and inflation; (ii) the discount rate to
apply; (iii) the rate of public social security growth; (iv) mortality rates; and (v) staff turnover.
The provision was re-assessed at 31 December 2024 with the use of independent actuaries using the projected unit credit method,
based on a discount rate consistent with the iBoxx index of 3.24% for active employees and 2.80% for inactive employees (2023: iBoxx
index of 3.17% and 2.98%, respectively), the PER_Col_2020.1er.orden. mortality tables, and assuming contractual salary increases of
up to 2.8% in 2025 and 2.0% in 2026 and then 2.0% per annum thereafter derived from increases in the Consumer Price Index (CPI).
At 31 December 2024, there were a total of 5,594 flight crew (31 December 2023: 5,179) eligible for making such elections when they
reach the age of 60. At 31 December 2024, there were 638 employees who had not reached the age of retirement, and eligible to elect
for early retirement (‘special leave’) who had elected to become inactive (31 December 2023: 479). In addition, at 31 December 2024,
there were 23 employees having reached the age of retirement and had elected to become inactive (31 December 2023: 25).
At 31 December 2024, the average length of employment of the eligible flight crew was 16 years (31 December 2023: 17 years).
This is mainly a long-term provision. Remeasurements in the valuation of this provision are recorded in Other comprehensive income.
The amount relating to this provision was €780 million at 31 December 2024 (2023: €677 million).
Legal claims and contractual disputes provisions
Legal claims and contractual disputes provisions include:
• amounts for multi-party claims from groups of employees on a number of matters related to their employment, including claims
for additional holiday pay and for age discrimination;
• amounts related to ongoing contractual disputes arising from the Group’s operations; and
• amounts related to investigations by a number of competition authorities in connection with alleged anti-competitive activity
concerning the Group’s passenger and cargo businesses.
The final amount required to settle the remaining claims and fines is subject to uncertainty.
Carbon-related obligations
Carbon-related obligations relate to the Emissions Trading Systems/Schemes and the CORSIA scheme for CO2 equivalent emitted
on flights within the EU, Switzerland, the UK and globally and are due to be extinguished in the year subsequent to the balance sheet
date through settlement with the relevant authorities. See notes 2 and 4 for further information.
28 Contingent liabilities
There are a number of legal and regulatory proceedings against the Group in a number of jurisdictions, which at 31 December 2024,
where they could be reliably estimated, amounted to €42 million (31 December 2023: €58 million). The Group does not consider it
probable that there will be an outflow of economic resources with regard to these proceedings and, accordingly, no provisions have
been recorded.
Included in contingent liabilities is the following:
Vueling commercial hand luggage policy
During 2023, Vueling received a number of information requests from the Ministerio de Consumo (Ministry of Consumer Affairs)
in Spain, with regard to its commercial hand luggage policy.
On 12 January 2024, the Ministerio de Consumo issued Vueling with a List of Charges asserting that the Vueling commercial hand
luggage policy infringes consumers’ rights under Article 47.1 of the Royal Legislative Decree 1/2007 in Spain and Regulation (EC)
No 1008/2008 of the European Parliament on the common rules for the operation of air services. Subsequently, on 14 May 2024,
the Ministerio de Consumo issued Vueling with a Sanctioning Resolution, which reconfirmed the details of the List of Charges and
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fined Vueling €39 million and sought rectification of the alleged infringements. On 14 June 2024, Vueling appealed the Sanctioning
Resolution to the Ministerio de Consumo. On 1 December 2024, the Ministerio de Consumo confirmed the aforementioned
Sanctioning Resolution. On 29 January 2025, Vueling filed a contentious administrative appeal, in relation to the Sanctioning
Resolution, with the Audiencia Nacional (National High Court) in Spain. Concurrently, Vueling filed a precautionary measure to
suspend the sanction until such time as a final judgment is issued. The Group expects a resolution of the precautionary measure
around mid-2025 and a hearing with the Audiencia Nacional in 2026, at the earliest.
The Group, with its advisors, has reviewed the Sanctioning Resolution and considers it has strong legal arguments to support
its commercial hand luggage policy and does not consider it probable that an adverse outcome will result in the future. As such,
the Group does not consider it appropriate to record any provision.
Contingent liabilities associated with income taxes, deferred taxes and indirect taxes are presented in note 10.
29 Financial risk management objectives and policies
The Group is exposed to a variety of financial risks: market risk (including fuel price risk, foreign currency risk, interest rate risk),
credit risk and liquidity risk. The principal impacts of these on the financial statements are discussed below:
a Fuel price risk
The Group is exposed to fuel price risk. In order to mitigate such risk, under the Group’s fuel price risk management strategy, a
variety of over the counter derivative instruments are entered into. The Group strategy is to hedge a proportion of fuel consumption
up to two years within the approved hedging profile.
The following table demonstrates the sensitivity of the Group’s principal exposure to a reasonable possible change in the fuel price,
based on current market volatility, with all other variables held constant on the profit before tax and equity1. The sensitivity analysis
has been performed on fuel derivatives (both those designated in hedge relationships and those not designated in hedge
relationships) at the balance sheet date only and is not reflective of the impact had the sensitised rates been applied through the
duration of the years to 31 December 2024 and 2023.
2024
2023
Increase/(decrease)
in fuel price
%
Effect on profit
before tax
€ million
Effect on
equity
€ million
Increase/(decrease)
in fuel price
%
Effect on profit
before tax
€ million
Effect on
equity
€ million
40
–
2,079
40
–
1,497
(40)
–
(1,865)
(40)
–
(1,526)
1
The sensitivity analysis on equity excludes the sensitivity amounts recognised in the profit before tax.
During 2024, following a substantial recovery in the global price of crude oil and jet fuel, which continues to be impacted by
geopolitical events, the fair value of such net liability derivative instruments was €189 million at 31 December 2024 (2023: net
liability of €115 million), representing an increase of €74 million since 1 January 2024. Of the carrying amount of the net liability
at 31 December 2024, all (2023: all) of the associated derivatives were designated within hedge relationships.
b Foreign currency risk
The Group is exposed to foreign currency risk on revenue, purchases and borrowings that are denominated in a currency other than
the functional currency of each of the Group’s operating companies, being pound sterling and the euro. The currencies in which
these transactions are denominated are primarily US dollar, pound sterling and the euro. The Group has a number of strategies to
hedge foreign currency risk including hedging a proportion of its foreign currency sales and purchases for up to three years.
The following table demonstrates the sensitivity of the Group’s principal foreign exchange exposure to a reasonable possible change
in the US dollar, pound sterling and Japanese yen exchange rates, based on current market volatility, with all other variables held
constant on the profit before tax and equity1. The sensitivity analysis has been performed on interest-bearing liabilities, lease
liabilities and derivatives (both those designated in hedge relationships and those not designated in hedge relationships)
denominated in foreign currencies at the balance sheet date only and is not reflective of the impact had the sensitised rates been
applied through the duration of the years to 31 December 2024 and 2023.
Strengthening/
(weakening) in US
dollar rate
%
Effect on
profit
before tax
€ million
Effect on
equity
€ million
Strengthening/
(weakening) in
pound
sterling rate
%
Effect on
profit
before tax
€ million
Effect on
equity
€ million
Strengthening/
(weakening) in
Japanese yen rate
%
Effect on
profit
before tax
€ million
Effect on
equity
€ million
2024
20
404
975
20
(13)
394
20
(1)
(21)
(20)
(404)
(969)
(20)
13
(394)
(20)
1
21
2023
20
343
1,005
20
6
262
20
(50)
(64)
(20)
(346)
(1,159)
(20)
(8)
(262)
(20)
50
64
1
The sensitivity analysis on equity excludes the sensitivity amounts recognised in the profit before tax.
At 31 December 2024, the fair value of foreign currency net asset derivative instruments was €505 million (2023: net liability of
€357 million), representing an increase of €862 million since 1 January 2024. These comprise both derivatives designated in hedge
relationships and those derivatives that are not designated in a hedge relationship at inception. Of the carrying amount of the net
asset at 31 December 2024, €191 million (2023: net liability of €151 million) of the associated derivatives were designated within
hedge relationships. Those derivatives not designated in a hedge relationship on inception have their mark-to-market movements
recorded directly in the Income statement and recognised within Net currency retranslation (charges)/credits.
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c Interest rate risk
The Group is exposed to changes in interest rates on debt and on cash deposits. In order to mitigate the interest rate risk, the
Group’s policies allow a variety of over the counter derivative instruments to be entered into.
The following table demonstrates the sensitivity of the Group’s interest rate exposure to a reasonable possible change in the euro
interest rates, based on expectations regarding forward rate movements, on the profit before tax and equity1. The sensitivity analysis
has been performed on interest rate derivatives (both those designated in hedge relationships and those not designated in hedge
relationships) at the balance sheet date only and is not reflective of the impact had the sensitised rates been applied through the
duration of the years to 31 December 2024 and 2023.
2024
2023
Strengthening/
(weakening) in
euro interest
rate
Basis points
Effect on profit
before tax
€ million
Effect on
equity
€ million
Strengthening/
(weakening) in
euro interest
rate
Basis points
Effect on profit
before tax
€ million
Effect on
equity
€ million
100
(17)
9
100
(12)
16
(100)
17
(7)
(100)
12
(16)
1
The sensitivity analysis on equity excludes the sensitivity amounts recognised in the profit before tax.
At 31 December 2024, the fair value of interest rate net asset derivative instruments was €12 million (2023: net asset of €28 million),
representing a decrease of €16 million since 1 January 2024. Of the carrying amount of net asset at 31 December 2024, all (2023: all)
of the associated derivatives were designated within hedge relationships.
d Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
The Group is exposed to credit risk from its financing activities, including deposits with banks and financial institutions, foreign exchange
transactions and other financial instruments. The Group has policies and procedures to monitor the risk by assigning limits to each counterparty
by underlying exposure and by operating company and by only entering into transactions with counterparties with a very low credit risk.
At each period end, the Group assesses the effect of counterparties’ and the Group’s own credit risk on the fair value of derivatives
and any ineffectiveness arising is immediately recognised in the Income statement within Other non-operating credits.
e Counterparty risk
The Group is exposed to the non-performance by its counterparties in respect of financial assets receivable. The Group has policies
and procedures to monitor the risk by assigning limits to each counterparty by underlying exposure and by operating company.
The underlying exposures are monitored on a daily basis and the overall exposure limit by counterparty is periodically reviewed
by using available market information.
The financial assets recognised in the financial statements, net of impairment losses (if any), represent the Group’s maximum
exposure to credit risk, without taking into account any guarantees in place or other credit enhancements.
At 31 December 2024 the Group’s credit risk position, allocated by region, in respect of treasury managed cash and derivatives was
as follows:
Mark-to-market of treasury
controlled financial
instruments allocated by
geography
Region
2024
2023
United Kingdom
39 %
55 %
Spain
2 %
– %
Ireland
25 %
16 %
Rest of eurozone
27 %
24 %
Rest of world
7 %
5 %
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f Liquidity risk
The Group invests cash in interest-bearing accounts, time deposits and money market funds, choosing instruments with appropriate
maturities or liquidity to retain sufficient headroom to readily generate cash inflows required to manage liquidity risk. The Group
has also committed revolving credit facilities.
The Group held the following committed undrawn general and committed aircraft financing facilities:
2024
Million
Currency
€ equivalent
Committed general facilities1
Euro facilities expiring between March and April 2025
€120
120
Euro facility expiring March 20252
€350
350
US dollar facilities expiring June 20292
$3,000
2,874
3,344
Committed aircraft facilities
US dollar facilities expiring between May and June 20253
$140
134
134
2023
Million
Currency
€ equivalent
Committed general facilities1
Euro facilities expiring between March and May 2024
€87
87
Euro facility expiring March 20252
€350
350
US dollar facilities expiring March 2025 and March 20262
$1,755
1,605
Pound sterling facilities expiring November 2026 and September 20282
£2,000
2,317
4,359
Committed aircraft facilities
US dollar facilities expiring between June and July 20243
$410
375
375
1
The general facilities can be drawn at any time at the discretion of the Group subject to the provision of up to three days’ notice of the intended
utilisation, depending on the facility.
2 Further information regarding these facilities is given in note 26b.
3 At 31 December 2024, the Group had available committed aircraft facilities maturing between May and June 2025 (2023: maturing between June and
July 2024) for specific committed aircraft deliveries.
In addition, at 31 December 2024, the Group had undrawn overdraft facilities of €56 million (2023: €53 million).
The following table analyses the Group’s (outflows) and inflows in respect of financial liabilities and derivative financial instruments
into relevant maturity groupings based on the remaining period at 31 December to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows and include interest.
€ million
Within
6 months
6-12
months
1-2
years
2-5
years
More than
5 years
Total 2024
Interest-bearing loans and borrowings:
Asset financing liabilities
(266)
(262)
(524)
(1,795)
(3,901)
(6,748)
Lease liabilities
(801)
(805)
(1,550)
(3,468)
(4,783)
(11,407)
Fixed rate borrowings
(576)
(14)
(56)
(2,186)
–
(2,832)
Floating rate borrowings
(14)
(13)
(26)
(16)
–
(69)
Trade and other payables
(6,149)
–
(401)
–
–
(6,550)
Derivative financial instruments (assets):
Interest rate derivatives
6
3
4
1
–
14
Foreign exchange contracts
203
174
201
20
–
598
Fuel derivatives
5
9
13
1
–
28
Derivative financial instruments (liabilities):
Interest rate derivatives
(1)
–
(1)
–
–
(2)
Foreign exchange contracts
(56)
(12)
(13)
–
–
(81)
Fuel derivatives
(64)
(64)
(61)
(36)
–
(225)
31 December 2024
(7,713)
(984)
(2,414)
(7,479)
(8,684)
(27,274)
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€ million
Within 6
months
6-12
months
1-2
years
2-5
years
More than 5
years
Total 2023
Interest-bearing loans and borrowings:
Asset financing liabilities
(241)
(230)
(448)
(1,317)
(3,195)
(5,431)
Lease liabilities
(1,303)
(864)
(1,546)
(3,798)
(5,017)
(12,528)
Fixed rate borrowings
(59)
(16)
(588)
(1,513)
(726)
(2,902)
Floating rate borrowings
(15)
(38)
(27)
(42)
–
(122)
Trade and other payables
(5,590)
–
(219)
–
–
(5,809)
Derivative financial instruments (assets):
Interest rate derivatives
12
9
8
4
1
34
Foreign exchange contracts
35
17
6
–
–
58
Fuel derivatives
5
4
26
–
–
35
Derivative financial instruments (liabilities):
Interest rate derivatives
(1)
(1)
(1)
(1)
–
(4)
Foreign exchange contracts
(206)
(179)
(38)
–
–
(423)
Fuel derivatives
(42)
(43)
(35)
(39)
–
(159)
31 December 2023
(7,405)
(1,341)
(2,862)
(6,706)
(8,937)
(27,251)
g Offsetting financial assets and liabilities
The Group enters into derivative transactions under ISDA (International Swaps and Derivatives Association) documentation.
In general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding
are aggregated into a single net amount that is payable by one party to the other.
The following financial assets and liabilities are subject to offsetting, enforceable master netting arrangements and similar agreements.
31 December 2024
€ million
Gross value of
financial
instruments
Gross
amounts set
off in the
Balance sheet1
Net amounts
of financial
instruments in
the Balance
sheet
Related
amounts not
offset in the
Balance sheet1
Net amount
Financial assets
Derivative financial assets
679
(55)
624
(6)
618
Financial liabilities
Derivative financial liabilities
351
(55)
296
(6)
290
1
The Group has pledged cash and cash equivalents as collateral against certain of its derivative financial liabilities. As at 31 December 2024, the Group
recognised €55 million of collateral (2023: €28 million) offset in the balance sheet and €6 million (2023: €2 million) not offset in the Balance sheet.
31 December 2023
€ million
Gross value of
financial
instruments
Gross
amounts set
off in the
Balance sheet
Net amounts
of financial
instruments in
the Balance
sheet
Related
amounts not
offset in the
Balance sheet
Net amount
Financial assets
Derivative financial assets
151
(28)
123
(2)
121
Financial liabilities
Derivative financial liabilities
595
(28)
567
(2)
565
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h Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain
an optimal capital structure, to reduce the cost of capital and to provide returns to shareholders.
The Group monitors capital on the basis of both the Gross debt to EBITDA before exceptional items ratio and the Net debt to
EBITDA before exceptional items ratio. For the year to 31 December 2024, the Gross debt to EBITDA before exceptional items
was 2.5 times (2023: 2.9 times) and the Net debt to EBITDA before exceptional items was 1.1 times (2023: 1.7 times). The definition
and calculation for these performance measures are included in the Alternative performance measures section.
Further detail on liquidity and capital resources and capital risk management is disclosed in the going concern section in note 2.
30 Financial instruments
a Financial assets and liabilities by category
The detail of the Group’s financial instruments at 31 December 2024 and 31 December 2023 by nature and classification for
measurement purposes is as follows:
31 December 2024
Financial assets
€ million
Amortised cost
Fair value through
Other
comprehensive
income
Fair value through
Income statement
Non-financial assets
Total
carrying amount by
balance sheet item
Non-current assets
Other equity investments
–
190
–
–
190
Derivative financial instruments
–
–
229
–
229
Other non-current assets
225
–
4
687
916
Current assets
Trade receivables
1,774
–
–
–
1,774
Other current assets
699
–
–
1,637
2,336
Derivative financial instruments
–
–
395
–
395
Other current interest-bearing deposits
1,639
–
–
–
1,639
Cash and cash equivalents
8,189
–
–
–
8,189
Financial liabilities
€ million
Amortised cost
Fair value through
Income statement
Non-financial
liabilities
Total
carrying amount by
balance sheet item
Non-current liabilities
Lease liabilities
7,169
–
–
7,169
Interest-bearing long-term borrowings
6,701
–
–
6,701
Derivative financial instruments
–
102
–
102
Other long-term liabilities
171
–
230
401
Current liabilities
Lease liabilities
1,477
–
–
1,477
Current portion of long-term borrowings
982
1,016
–
1,998
Trade and other payables
4,746
–
1,403
6,149
Derivative financial instruments
–
194
–
194
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31 December 2023
Financial assets
€ million
Amortised cost
Fair value through
Other
comprehensive
income
Fair value through
Income statement
Non-financial assets
Total
carrying amount by
balance sheet item
Non-current assets
Other equity investments
–
188
–
–
188
Derivative financial instruments
–
–
42
–
42
Other non-current assets1
211
–
–
551
762
Current assets
Trade receivables
1,559
–
–
–
1,559
Other current assets1
545
–
–
1,276
1,821
Derivative financial instruments
–
–
81
–
81
Other current interest-bearing deposits
1,396
–
–
–
1,396
Cash and cash equivalents
5,441
–
–
–
5,441
Financial liabilities
€ million
Amortised cost
Fair value through
Income statement
Non-financial
liabilities
Total
carrying amount by
balance sheet item
Non-current liabilities
Lease liabilities
7,141
–
–
7,141
Interest-bearing long-term borrowings2
5,964
–
–
5,964
Derivative financial instruments
–
106
–
106
Other long-term liabilities
151
–
68
219
Current liabilities
Lease liabilities
1,826
–
–
1,826
Current portion of long-term borrowings2
416
735
–
1,151
Trade and other payables
5,198
–
392
5,590
Derivative financial instruments
–
461
–
461
1
The results for 2023 include a reclassification of ETS allowances from Intangible assets to Carbon-related and other assets. Amounts of €330 million
and €247 million at 31 December 2023 have been reclassified to Other non-current assets and Other current assets, respectively. Further information
is given in notes 2 and 37.
2 The 2023 total borrowings include a reclassification to conform with the current basis of presentation, where the non-current portion of the 2028
convertible bond, amounting to €726 million at 31 December 2023, has been reclassified as a current liability. Further information is given in notes 2
and 37.
b Fair value of financial assets and financial liabilities
The fair values of the Group’s financial instruments are disclosed in hierarchy levels depending on the nature of the inputs used
in determining the fair values and using the following methods and assumptions:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. A market is regarded as active if quoted
prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency, and
those prices represent actual and regularly occurring market transactions on an arm’s length basis. Level 1 methodologies (market
values at the balance sheet date) were used to determine the fair value of listed asset investments classified as equity investments
and listed interest-bearing borrowings. The fair value of financial liabilities and financial assets incorporates own credit risk and
counterparty credit risk, respectively.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly. The fair value of financial instruments that are not traded in an active market is determined by valuation techniques.
These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on
entity-specific estimates.
Derivative instruments are measured based on the market value of instruments with similar terms and conditions using forward
pricing models, which include forward exchange rates, forward interest rates, forward fuel curves and corresponding volatility
surface data at the balance sheet date. The fair value of the principal derivative financial assets and liabilities is determined as
follows, incorporating adjustments for own credit risk and counterparty credit risk:
• commodity reference contracts including swaps and options transactions, referenced to: (i) CIF NWE cargoes jet fuel; (ii) ICE
Gasoil; (iii) ICE Brent; (iv) ICE Gasoil Brent crack; (v) Jet Differential; and (vi) Jet fuel Brent crack – the mark-to-market valuation
prices are determined by reference to current forward curve and standard option pricing valuation models, values are discounted
to the balance sheet date based on the corresponding interest rate;
• currency forward and option contracts – by reference to current forward prices and standard option pricing valuation models,
values are discounted to the balance sheet date based on the corresponding interest rate; and
• interest rate swap contracts – by discounting the future cash flows of the swap contracts at market interest rate valued with
the current forward curve.
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The fair value of the Group’s interest-bearing borrowings, excluding lease liabilities, is determined by discounting the remaining
contractual cash flows at the relevant market interest rates at the balance sheet date. The fair value of the Group’s interest-bearing
borrowings is adjusted for own credit risk.
Level 3: Inputs for the asset or liability that are not based on observable market data. The principal method of such valuation
is performed using a valuation model that considers the present value of the dividend cash flows expected to be generated by
the associated assets. For other equity investments where cash flow information is not available, an adjusted net asset method
is applied. For the methodology in the determination of the fair value of the investment in Air Europa Holdings, see note 19.
The fair value of cash and cash equivalents, other current interest-bearing deposits, trade receivables, other current assets and trade
and other payables approximate their carrying value largely due to the short-term maturities of these instruments.
The carrying amounts and fair values of the Group’s financial assets and liabilities at 31 December 2024 are as follows:
Fair value
Carrying value
€ million
Level 1
Level 2
Level 3
Total
Total
Financial assets
Other equity investments
1
–
189
190
190
Other non-current financial assets
–
22
4
26
23
Derivative financial assets:
Interest rate swaps1
–
14
–
14
14
Foreign exchange contracts1
–
583
–
583
583
Fuel derivatives1
–
27
–
27
27
Financial liabilities
Interest-bearing loans and borrowings:
Asset financed liabilities
–
5,400
–
5,400
5,788
Fixed rate borrowings
2,762
45
–
2,807
2,845
Floating rate borrowings
–
66
–
66
66
Derivative financial liabilities:
Interest rate derivatives2
–
2
–
2
2
Foreign exchange contracts2
–
78
–
78
78
Fuel derivatives2
–
216
–
216
216
1
Current portion of derivative financial assets is €395 million.
2 Current portion of derivative financial liabilities is €194 million.
The carrying amounts and fair values of the Group’s financial assets and liabilities at 31 December 2023 are set out below:
Fair value
Carrying value
€ million
Level 1
Level 2
Level 3
Total
Total
Financial assets
Other equity investments
1
–
187
188
188
Other non-current financial assets
–
12
–
12
25
Derivative financial assets:
Interest rate swaps1
–
32
–
32
32
Foreign exchange contracts1
–
58
–
58
58
Fuel derivatives1
–
33
–
33
33
Financial liabilities
Interest-bearing loans and borrowings:
Asset financed liabilities
–
3,900
–
3,900
4,427
Fixed rate borrowings
2,429
53
–
2,482
2,574
Floating rate borrowings
–
111
–
111
114
Derivative financial liabilities:
Interest rate derivatives2
–
4
–
4
4
Foreign exchange contracts2
–
415
–
415
415
Fuel derivatives2
–
148
–
148
148
1
Current portion of derivative financial assets is €81 million.
2 Current portion of derivative financial liabilities is €461 million.
There have been no transfers between levels of fair value hierarchy during the year.
Financial assets, other equity instruments, financial liabilities and derivative financial assets and liabilities are all measured at fair value
in the consolidated financial statements. Interest-bearing borrowings, with the exception of the €825 million convertible bond due
2028, which is measured at fair value, are measured at amortised cost.
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c Level 3 financial assets reconciliation
The following table summarises key movements in Level 3 financial assets:
€ million
2024
2023
Opening balance for the year
187
55
Additions
20
5
Transfers to Level 1 financial assets
–
(1)
Net (losses)/gains recognised in Other comprehensive income
(19)
128
Exchange movement
1
–
Closing balance for the year
189
187
d Hedges
Cash flow hedges
At 31 December 2024, the Group’s principal risk management activities that were hedging future forecast transactions were:
• foreign exchange contracts, hedging foreign currency exchange risk on cash inflows and certain operational payments.
Remeasurement gains and losses on the derivatives are (i) recognised in equity and transferred to the Income statement, where
the hedged item is recorded directly in the Income statement, to the same caption as the underlying hedged item is classified;
(ii) recognised in equity and transferred to the Balance sheet, where the hedged item is a non-financial asset or liability, and
recorded to the Balance sheet to the same caption as the hedged item is recognised; and (iii) recognised in equity and transferred
to the Income statement, where the hedged item is a financial asset or liability, at the same time as the financial asset or liability
is recorded in the Income statement. Reclassification gains and losses on derivatives, arising from the discontinuance of hedge
accounting, are recognised in the Income statement when the future transaction is no longer expected to occur and recorded
in the relevant Income statement caption to which the hedged item is classified;
• crude, gas oil and jet kerosene derivative contracts, hedging price risk on fuel expenditure. Remeasurement gains and losses
on the derivatives are: (i) recognised in equity and transferred to the Income statement within Fuel costs and emissions charges
to match against the related fuel cash outflow, where the underlying hedged item does not give rise to the recognition of fuel
inventory; and (ii) recognised in equity and transferred to the Balance sheet within Inventory, where the underlying hedged item
is fuel inventory. Gains and losses recorded within Inventory are recognised in the Income statement when the underlying fuel
inventory is consumed, within Fuel, oil costs and emission charges. Reclassification gains and losses on derivatives, arising from
the discontinuance of hedge accounting, are recognised in the Income statement within Fuel costs and emissions charges when
the future transaction is no longer expected to occur;
• interest rate contracts, hedging interest rate risk on floating rate debt and certain operational payments. Remeasurement gains
and losses on the derivatives are recognised in equity and transferred to the Income statement within Interest expense; and
• future loan repayments denominated in foreign currency are designated in a hedge relationship hedging foreign exchange
fluctuations on revenue cash inflows. Remeasurement gains and losses on the associated loans are recognised in equity and
transferred to the Balance sheet, where the hedged item is a non-financial asset or liability when the loan repayments are made
(generally in instalments over the life of the loan).
The amounts included in equity are summarised below:
Losses in respect of cash flow hedges included within equity
€ million
2024
2023
Loan repayments to hedge future revenue
(42)
22
Foreign exchange contracts to hedge future revenue and expenditure1
(169)
94
Crude, gas oil and jet kerosene derivative contracts1
229
67
Derivatives used to hedge interest rates1
11
(1)
Instruments for which hedge accounting no longer applies1, 2
40
123
69
305
Related deferred tax credit
(17)
(75)
Total amount included within equity
52
230
1
The carrying value of derivative instruments recognised in assets and liabilities is analysed in parts a and b of this note.
2 Relates to previously terminated hedge relationships for which the underlying forecast transactions remain expected to occur.
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212
Notional amounts of significant financial instruments used as cash flow hedging instruments:
Notional principal amounts
€ million
Average
hedge rate
Hedge range
Within
1 year
1-2
years
2-5
years
5+
years
Total 31
December
2024
Foreign exchange contracts to hedge
future revenue and expenditure from US
dollars to pound sterling1
1.26
1.16 to 1.34
3,716
1,352
206
–
5,274
Foreign exchange contracts to hedge
future revenue and expenditure from US
dollars to euros1
1.11
1.04 to 1.19
1,907
959
295
–
3,161
Foreign exchange contracts to hedge
future revenue and expenditure from euros
to pound sterling1
1.25
1.11 to 1.42
561
386
452
731
2,130
Fuel commodity price contracts to hedge
future US dollar fuel expenditure2
670
489 to 1,200
4,219
1,735
883
–
6,837
Interest rate contracts to hedge future
interest expenditure3, 4
1.87
(0.06) to 3.90
2,052
509
149
–
Notional principal amounts
€ million
Average
hedge rate
Hedge range
Within
1 year
1-2
years
2-5
years
5+
years
Total 31
December
2023
Foreign exchange contracts to hedge future
revenue and expenditure from US dollars to
pound sterling1
1.21
1.05 to 1.35
3,147
1,239
–
–
4,386
Foreign exchange contracts to hedge future
revenue and expenditure from US dollars to
euros1
1.00
0.86 to 1.24
2,458
939
305
–
3,702
Foreign exchange contracts to hedge future
revenue and expenditure from euros to
pound sterling1
1.21
1.07 to 1.42
479
375
357
124
1,335
Fuel commodity price contracts to hedge
future US dollar fuel expenditure2
722
489 to 1,200
5,425
1,948
980
–
8,353
Interest rate contracts to hedge future
interest expenditure3, 4
1.83 (0.06) to 3.90
2,127
912
493
2
1
Expenditure includes both operating and capital expenditure.
2 Notional amounts of fuel commodity price hedging instruments at 31 December 2024 represent 10.0 million metric tonnes of jet fuel equivalent
(31 December 2023: 10.0 million metric tonnes), and the hedge range is expressed as the US dollar price per metric tonne, which for those products
typically priced in barrels, has been determined using a conversion factor of 7.88.
3 The hedge range for interest rate contracts is expressed as a percentage.
4 The notional amount of interest rate contracts at 31 December 2024 were €1,742 million (31 December 2023: €1,354 million). Amounts included
reflect the notional amortising amounts outstanding at the end of each period and align with the profiles of the underlying hedged items.
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Movements recorded in the cash flow hedge reserve
Amounts recognised in the Income statement
For the year to 31 December 2024
€ million
Ineffectiveness1
Reclassified to
the Income
statement
Total
recognised
movements
Fair value
movements
recognised in
Other
comprehensive
income2
Amounts
transferred to
the Balance
sheet
Foreign exchange contracts to hedge future revenue and
expenditure
1
(102)
(101)
(185)
21
Crude, gas oil and jet kerosene derivative contracts
1
(26)
(25)
190
(7)
Derivatives used to hedge interest rates
–
17
17
(5)
–
Loan repayments to hedge future revenue
19
–
19
(72)
(10)
Instruments for which hedge accounting no longer applies
–
–
–
–
(87)
21
(111)
(90)
(72)
(83)
Related deferred tax
21
19
20
Total movements recorded in the cash flow hedge reserve
(69)
(53)
(63)
Amounts recognised in the Income statement
For the year to 31 December 2023
€ million
Ineffectiveness1
Reclassified to
the Income
statement
Total
recognised
movements
Fair value
movements
recognised in
Other
comprehensive
income2
Amounts
transferred to
the Balance
sheet
Foreign exchange contracts to hedge future revenue and
expenditure
(1)
31
30
234
3
Crude, gas oil and jet kerosene derivative contracts
9
99
108
71
13
Derivatives used to hedge interest rates
–
48
48
(3)
–
Loan repayments to hedge future revenue
–
–
–
(47)
(18)
Instruments for which hedge accounting no longer applies
–
–
–
–
(92)
8
178
186
255
(94)
Related deferred tax
(44)
(60)
10
Total movements recorded in the cash flow hedge reserve
142
195
(84)
1
Ineffectiveness recognised in the Income statement is presented as Realised and Unrealised gains and losses on derivatives not qualifying for hedge
accounting within non-operating items.
2 Amounts recognised in Other comprehensive income represent gains and losses on the hedging instrument.
Fair value hedges
At 31 December 2024, the Group’s principal risk management activities associated with fair value hedging were related to interest
rate contracts hedging the fair value risk on fixed rate lease liabilities. Remeasurement gains and losses on both the derivatives
and the host financial liability are recognised in Income statement within Other non-operating credits.
The carrying values of the hedged items and hedging instruments of the Group’s fair value hedges at 31 December 2024 are as follows:
€ million
2024
2023
Carrying value of lease liabilities to which fair value hedging has been applied (hedged items)1
(54)
(65)
Carrying amount of the interest rate derivatives (hedging instruments)
(2)
(4)
Accumulated amount of fair value hedge adjustments on the hedged item included in the carrying
amount of the hedged item
(3)
(2)
Change in value used for calculating hedge ineffectiveness
4
3
1
Hedged items included in the fair value hedges are presented within Borrowings in the Balance sheet and in note 26.
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International Airlines Group | Annual Report and Accounts 2024
214
31 Share capital, share premium and treasury shares
Allotted, called up and fully paid
Number of
shares
‘000s
Ordinary
share capital
€ million
Share
premium
€ million
31 December 2023: Ordinary shares of €0.10 each
4,971,476
497
7,770
31 December 2024: Ordinary shares of €0.10 each
4,971,476
497
7,770
a Treasury shares
During the year to 31 December 2024, the Group acquired treasury shares for IAG’s use, which will be applied to employee share
scheme requirements. In total, the Group purchased 74.9 million shares at a weighted average share price of €2.82 per share
totalling €211 million, which are held as treasury shares.
In addition, during the year to 31 December 2024, the Group commenced a €350 million share buyback programme, with an
expected completion date of February 2025. At 31 December 2024, as part of the total of 74.9 million shares purchased, 47.9 million
shares, amounting to €156 million, related to the share buyback programme. The treasury shares acquired under the €350 million
share buyback programme will be cancelled after approval at the 2025 General Shareholders Meeting.
A total of 13.1 million (2023: 3.3 million) shares were issued to employees during the year as a result of vesting of employee share schemes.
At 31 December 2024 the Group held 117.6 million treasury shares (2023: 55.8 million), which represented 2.37% (2023: 1.12%) of the
issued share capital of the Company.
32 Share-based payments
The Group operates share-based payment schemes as part of the total remuneration package provided to employees. These
schemes comprise both share option schemes where employees acquire shares at an option price and share award plans whereby
shares are issued to employees at no cost, subject to the achievement by the Group of specified performance targets.
a IAG Performance Share Plan
The IAG Performance Share Plan (PSP) was granted to senior executives and managers of the Group who are most directly involved
in shaping and delivering business success over the medium to long term. Awards made from 2015 to 2020 were nil-cost options,
with a two-year holding period following the three-year performance period, before options can be exercised. All awards had three
independent performance measures with equal weighting: Total Shareholder Return (TSR) relative to the STOXX Europe 600 Travel
and Leisure Index (2020 awards) or MSCI European Transportation Index (prior to 2020 awards), earnings per share and Return
on Invested Capital.
b IAG Restricted Share Plan
The IAG Restricted Share Plan was introduced in 2021 to increase the alignment of both interests and outcomes between the
Group’s senior management and shareholders through the build-up and maintenance of senior management shareholdings and
an increased focus on the long-term, sustainable performance of the Group. Awards have been made as conditional awards, with
a two-year holding period following the three-year vesting period. There are no performance measures associated with the awards.
Vesting will be contingent on the satisfaction of a discretionary underpin, normally assessed over three financial years commencing
from the financial year in which the award was granted. Approval at the end of the vesting period will be at the discretion of the
Remuneration Committee, considering the Group’s overall performance, including financial and non-financial performance measures
over the course of the vesting period, as well as any material risk or regulatory failures identified.
c IAG Full Potential Incentive Plan
In 2021, the Group launched the Full Potential Incentive Plan, which was granted to key individuals involved in the delivery of a series
of transformation projects that will enable the Group to deliver business success over the medium to long term. The awards have been
made as conditional awards, vesting in 2025 and dependent on stretch performance targets for 2024 and the approval of the Board.
d IAG Incentive Award Deferral Plan
The IAG Incentive Award Deferral Plan (IADP) is granted to qualifying employees based on performance and service tests. It will
be awarded when an annual incentive award is triggered subject to the employee remaining in employment with the Group for
three years after the grant date. The relevant population will receive a proportion of their incentive award up front in cash, and the
remaining proportion in shares after three years through the IADP.
e Share-based payment schemes summary
Number of awards ’000s
Outstanding
at 1 January
2024
Granted
number
Lapsed
number
Vested
number
Outstanding at
31 December
2024
Exercisable 31
December
2024
Performance Share Plan
9,132
–
204
4,737
4,191
4,191
Restricted Share Plan
59,213
27,237
2,881
13,063
70,506
–
Full Potential Incentive Plan
29,600
860
1,429
–
29,031
–
Incentive Award Deferral Plan1
1,007
465
–
560
912
–
98,952
28,562
4,514
18,360
104,640
4,191
1
The figures for the Incentive Award Deferral Plan include a restatement at 1 January 2024 to increase the balance by 149 thousand awards.
The weighted average share price at the date of exercise of options exercised during the year to 31 December 2024 was £1.66
(2023: £1.52). The weighted average contractual life for awards outstanding at 31 December 2024 was 1.1 years (2023: 1.6 years).
The Group recognised a share-based payment charge of €72 million for the year to 31 December 2024 (2023: €52 million).
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215
33 Other reserves and non-controlling interests
For the year to 31 December 2024
Other reserves
€ million
Unrealised
gains and
losses1
Cost of
hedging
reserve2
Currency
translation3
Merger
reserve4
Capital
reserves5
Total other
reserves
Non-
controlling
interest
1 January 2024
(178)
(118)
(100)
(2,467)
867
(1,996)
6
Other comprehensive (loss)/income for the year
Cash flow hedges reclassified and reported in net
profit:
Fuel costs and emission charges
93
–
–
–
–
93
–
Currency differences
3
–
–
–
–
3
–
Finance costs
(11)
–
–
–
–
(11)
–
Ineffectiveness recognised in other non-
operating costs
(16)
–
–
–
–
(16)
–
Net change in fair value of cash flow hedges
53
–
–
–
–
53
–
Net change in fair value of other equity
investments
(19)
–
–
–
–
(19)
–
Net change in fair value of cost of hedging
–
24
–
–
–
24
–
Cost of hedging reclassified and reported in net
profit
–
48
–
–
–
48
–
Fair value movements on liabilities attributable
to credit risk changes
(44)
–
–
–
–
(44)
–
Currency translation differences
–
–
118
–
–
118
–
Hedges transferred and reported in property,
plant and equipment
(6)
(5)
–
–
–
(11)
–
Hedges transferred and reported in sales in
advance of carriage
59
1
–
–
–
60
–
Hedges transferred and reported in inventory
10
–
–
–
–
10
–
31 December 2024
(56)
(50)
18
(2,467)
867
(1,688)
6
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International Airlines Group | Annual Report and Accounts 2024
216
Other reserves
€ million
Unrealised
gains and
losses1
Cost of
hedging
reserve2
Currency
translation3
Merger
reserve4
Redeemed
capital
reserve5
Total other
reserves
Non-
controlling
interest
1 January 2023
67
(66)
(118)
(2,467)
867
(1,717)
6
Other comprehensive (loss)/income for the year
Cash flow hedges reclassified and reported in
net profit:
Fuel costs and emission charges
(81)
–
–
–
–
(81)
–
Currency differences
(20)
–
–
–
–
(20)
–
Finance costs
(35)
–
–
–
–
(35)
–
Ineffectiveness recognised in other non-
operating costs
(6)
–
–
–
–
(6)
–
Net change in fair value of cash flow hedges
(195)
–
–
–
–
(195)
–
Net change in fair value of other equity
investments
127
–
–
–
–
127
–
Net change in fair value of cost of hedging
–
(120)
–
–
–
(120)
–
Cost of hedging reclassified and reported in net
profit
–
82
–
–
–
82
–
Fair value movements on liabilities attributable
to credit risk changes
(119)
–
–
–
–
(119)
–
Currency translation differences
–
–
18
–
–
18
–
Hedges transferred and reported in property,
plant and equipment
9
(15)
–
–
–
(6)
–
Hedges transferred and reported in sales in
advance of carriage
84
1
–
–
–
85
–
Hedges transferred and reported in inventory
(9)
–
–
–
–
(9)
–
31 December 2023
(178)
(118)
(100)
(2,467)
867
(1,996)
6
1
The unrealised gains and losses reserve records fair value changes on equity investments and the portion of the amounts on hedging instruments
in cash flow hedges that are determined to be effective hedges. The amounts at 31 December 2024 that relate to the fair value changes on equity
instruments and to the cash flow hedge reserve were €119 million credit and €69 million charge, respectively.
2 The cost of hedging reserve records, among others, changes on the time value of options.
3 The currency translation reserve records exchange differences arising from the translation of the financial statements of non-euro functional currency
subsidiaries and investments accounted for under the equity method into the Group’s reporting currency of euros. The movement through this
reserve is affected by the fluctuations in the pound sterling to euro foreign exchange translation rate.
4 The merger reserve originated from the merger transaction between British Airways and Iberia. The balance represents the difference between the
fair value of the Group on the transaction date and the fair value of Iberia and the book value of British Airways (including its reserves).
5 Capital reserves include a Redeemed capital reserve of €70 million (2023: €70 million) associated with the decrease in share capital relating to
cancelled shares and a Share capital reduction reserve of €797 million (2023: €797 million) associated with a historical reduction in the nominal value
of the Company’s share capital.
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217
34 Employee benefit obligations
Significant accounting estimate applied - Employee benefit obligations: Airways Pension Scheme (APS) and New Airways
Pension Scheme (NAPS) key actuarial assumptions
At 31 December 2024, the Group recognised €19,796 million in respect of employee benefit obligations (2023: €21,239 million),
of which €19,275 million related to the APS and NAPS obligations (2023: €20,692 million).
The calculation of the APS and NAPS employee benefit obligations is determined using the valuation requirements of IAS 19.
These valuations involve making assumptions about discount rates, mortality rates and future pension increases. Due to the long-
term nature of these schemes, such assumptions are subject to significant uncertainty. The Group determines the assumptions to
be adopted in discussion with qualified actuaries. Any difference between these assumptions and the actual outcome will impact
future net assets and total comprehensive income. The impact of sensitising these assumptions is given below.
The Group operates a variety of post-employment benefit arrangements, covering both defined contribution and defined benefit
schemes. The Group also has a scheme for flight crew who meet certain conditions and, therefore, have the option of being
placed on reserve and retaining their employment relationship until reaching the statutory retirement age, or taking early
retirement (see note 27).
Defined contribution schemes
The Group operates a number of defined contribution schemes for its employees.
Costs recognised in respect of defined contribution pension plans in Spain, the UK and Ireland for the year to 31 December 2024
were €292 million (2023: €279 million).
Defined benefit schemes
The principal funded defined benefit pension schemes within the Group are the APS and the NAPS, both of which are in the UK
and are closed to new members.
APS has been closed to new members since 1984, but remains open to future accrual for a small group of active members. The
benefits provided under APS are based on final average pensionable pay and, for the majority of members, are subject to inflationary
increases in payment.
NAPS has been closed to new members since 2003 and closed to future accrual since 2018. Following closure, members’ deferred
pensions are increased annually by inflation up to 5% per annum (measured using the Government’s annual Pension Increase
(Review) Orders, which since 2011 have been based on CPI).
APS and NAPS are governed by separate Trustee Boards. Although APS and NAPS have separate Trustee Boards, certain aspects
of the business of the two schemes are common. APS and NAPS have developed certain joint working groups that are attended by
the Trustee Board members of each scheme although each Trustee Board reaches its decisions independently. There are sub-committees
which are separately responsible for the governance, operation and investments of each scheme. British Airways Pension Trustees
Limited holds the assets of both schemes on behalf of their respective Trustees. The Trustees are responsible for administering the
pension benefits in line with the pension scheme rules and relevant pensions legislation including applicable case law.
Triennially, the Trustees of APS and NAPS undertake actuarial valuations, which are subsequently agreed with British Airways to
determine the cash contributions and any deficit payment plans through to the next valuation date, as well as ensuring that the
schemes have sufficient funds available to meet future benefit payments to members. These actuarial valuations are prepared using
the principles set out in UK Pension legislation. This differs from the IAS 19 ‘Employee benefits’ valuation, which is used for deriving
the Income statement and Balance sheet positions and uses a best-estimate approach overall. The different purpose and principles
lead to different assumptions being used, and, therefore, a different estimate for the liabilities and funding levels.
At 31 December 2024, the triennial valuations as at 31 March 2024 for both APS and NAPS had not been finalised and, accordingly,
the latest actuarial valuations were performed as at 31 March 2021, which resulted in a technical surplus of €343 million (£295 million)
for APS and a technical deficit of €1,887 million (£1,650 million) for NAPS. The actuarial valuations performed for APS and NAPS are
different to the valuation performed as at 31 December 2024 under IAS 19 mainly due to timing differences of the measurement
dates and to the specific scheme assumptions in the actuarial valuation performed as at 31 March 2021 compared with IAS 19
requirements used in the accounting valuation assumptions as at the balance sheet date. The actuarial valuation of neither APS nor
NAPS is updated outside of the triennial valuations, making comparability between the scheme liabilities applying the principles set
out in the UK Pension legislation and the requirements of IAS 19 not possible. The principal difference relates to the discount rate
applied, which under the triennial actuarial valuation, aligns with a prudent estimate of the future investment returns on the assets of
the respective schemes, whereas, under IAS 19, the rates are based on high-quality corporate bond yields, regardless of how the
assets are invested.
The triennial valuation as at 31 March 2021 for NAPS supersedes the previous agreements reached in 2020 and 2021 between British
Airways and the Trustee of NAPS relating to the deferral of deficit contributions. The deferred deficit contributions have been
incorporated into the deficit payment plan agreed as part of the triennial valuation as at 31 March 2021.
As part of the triennial valuation as at 31 March 2021 for NAPS, British Airways agreed to provide certain property assets as security,
which will remain in place until 30 September 2028 unless otherwise modified in the 31 March 2024 triennial valuation.
Other plans
British Airways also operates post-retirement schemes in a number of jurisdictions outside of the UK. The principal scheme is the
British Airways Plc Pension Plan (USA) based in the United States and referred to as the ‘US Plan’. The US Plan is considered to be
a defined benefit scheme and is closed to new members and to future accrual.
The majority of British Airways’ other plans are fully funded, but there are also a number of unfunded plans, for which the Group
meets the benefit payment obligations as they fall due.
In addition, the IAG Loyalty and Aer Lingus operating segments operate certain defined benefit plans, both funded and unfunded.
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International Airlines Group | Annual Report and Accounts 2024
218
Risk associated with the defined benefit schemes
The defined benefit schemes expose the Group to a range of risks, with the following being the most significant:
• asset volatility risk – the scheme obligations are calculated using a discount rate set with reference to high-quality corporate bond
yields. If scheme assets underperform this yield, this will reduce the surplus/increase the deficit, depending on the scheme. Certain
of the schemes hold a significant amount of equities, which are expected to outperform corporate bonds in the long term while
creating volatility and risk in the short term;
• longevity risk – the majority of the scheme obligations are to provide benefits over the life of the scheme members. An increase
in life expectancy will result in a corresponding increase in the defined benefit obligation;
• interest rate risk – a decrease in interest rates will increase plan liabilities, although this will be partially offset by an increase in the
value of certain of the scheme assets;
• inflation risk – a significant proportion of the scheme obligations are linked to inflation, such that any increase in inflation will cause
an increase in the obligations. While certain of the scheme assets are indexed to inflation, any expected increase in the scheme
assets from inflation would be disproportionately lower than the increase in the scheme obligations; and
• currency risk – a number of scheme assets are denominated in currencies other than the pound sterling. Weakening of those
currencies, or strengthening of the pound sterling, in the long term, will have the effect of reducing the value of scheme assets.
a Cash payments and funding arrangements
Cash payments in respect to pension obligations comprise normal employer contributions by the Group and deficit contributions
based on the agreed deficit payment plan with NAPS. Total payments for the year to 31 December 2024, net of service costs made
by the Group, were €37 million (2023: €48 million) being the employer contributions of €38 million (2023: €49 million) less the
current service cost of €1 million (2023: €1 million) (note 34b,c).
Future funding arrangements
Pension contributions for APS and NAPS were determined by actuarial valuations made at 31 March 2021, using assumptions and
methodologies agreed between the Group and Trustee of each scheme.
In total, the Group expects to pay €1 million in employer contributions to APS and NAPS in 2025.
The following graph provides the undiscounted benefit payments to be made by the Trustees of APS and NAPS over the remaining
expected duration of the schemes:
Projected benefit payments from the balance sheet date (€ million, unaudited)
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
0
100
200
300
400
500
600
700
800
900
1,000
n
APS
n
NAPS
The amounts and timing of these projected benefit payments are subject to the aforementioned risks to the schemes.
Deficit contributions
At the date of the actuarial valuation, the actuarial deficit of NAPS amounted to €1,887 million. In order to address the deficit in the
scheme, the Group committed to deficit contribution payments through to 30 June 2023, amounting to approximately €58 million
per year, increasing by €58 million each year up to 30 June 2026 and subsequently capped at €257 million per year through to
31 May 2032. The deficit contribution plan includes an over-funding protection mechanism, based on the triennial valuation
methodology for measuring the deficit, whereby deficit contributions are suspended if the funding position reaches 100%, with a
mechanism for contributions to resume if the contribution level subsequently falls below 100%, or until such point as the scheme
funding level reaches 100%.
During the year ended and as at 31 December 2024, the NAPS funding position exceeded 100% and, accordingly,
deficit contributions were suspended. At 31 December 2024, the valuation of the funding level incorporates significant forward-
looking assumptions, such that the Group currently does not expect to make further deficit contributions. Given the long-term
nature of the NAPS scheme, these assumptions are subject to uncertainty and there can be no guarantee that deficit contributions
will not resume in the future or that additional deficit contributions will not need to be incorporated into future triennial
actuarial valuations.
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International Airlines Group | Annual Report and Accounts 2024
219
At 31 December 2024, the Group is committed to the following undiscounted deficit payments, which are deductible for tax
purposes at the statutory rate of tax:
€ million
NAPS1
Other
schemes
Within 12 months
–
38
1-2 years
–
33
2-5 years
–
31
Greater than 5 years
–
–
Total expected deficit payments
–
102
1
Committed deficit contributions, agreed as part of the 31 March 2021 actuarial valuation, were suspended at 31 December 2024 as an effect of the
over-funding protection mechanism.
Deficit payments in respect of local arrangements outside of the UK have been determined in accordance with local practice.
Under the triennial valuation of NAPS as at 31 March 2021, in the year to 31 December 2023, no dividend payment was permitted
from British Airways to IAG. In the year to 31 December 2024, any dividends paid by British Airways were required to be matched by
contributions to NAPS of 50% of the value of the dividends paid. In the period from 1 January to 30 September 2025, any dividend
payment from British Airways to IAG that exceeds 50% of the pre-exceptional profit after tax will require additional payments to be
made to NAPS if the scheme is not at least 100% funded. All dividend restrictions cease from 1 October 2025 onwards. British
Airways must maintain a minimum cash level of €1,933 million (£1,600 million) as at the date of the declaration of any dividends as
well as immediately following the payment of any dividends to IAG and the associated matching contributions to NAPS. The amount
of any deficit contributions and dividend matching contributions in a single financial year is limited to €362 million (£300 million).
b Employee benefit scheme amounts recognised in the financial statements
i Amounts recognised on the Balance sheet
2024
€ million
APS
NAPS
Other
Total
Scheme assets at fair value1,2
5,819
15,713
417
21,949
Present value of scheme liabilities1
(5,819)
(13,456)
(521)
(19,796)
Net pension asset/(liability)
–
2,257
(104)
2,153
Effect of the asset ceiling3
–
(564)
(2)
(566)
Other employee benefit obligations
–
–
(11)
(11)
31 December 2024
–
1,693
(117)
1,576
Represented by:
Employee benefit asset
1,711
Employee benefit obligation
(135)
Net employee benefit asset4
1,576
2023
€ million
APS
NAPS
Other
Total
Scheme assets at fair value1
6,070
16,724
393
23,187
Present value of scheme liabilities1
(6,048)
(14,644)
(547)
(21,239)
Net pension asset/(liability)
22
2,080
(154)
1,948
Effect of the asset ceiling3
(7)
(728)
–
(735)
Other employee benefit obligations
–
–
(8)
(8)
31 December 2023
15
1,352
(162)
1,205
Represented by:
Employee benefit asset
1,380
Employee benefit obligation
(175)
Net employee benefit asset4
1,205
1
Includes Additional Voluntary Contributions (AVCs), which the Trustees hold as assets to secure additional benefits on a defined contribution basis
for those members who elect to make such AVCs. At 31 December 2024, such assets were €317 million (2023: €322 million) with a corresponding
amount recorded in the scheme liabilities.
2 Included within the fair value of scheme assets are €2,395 million of private equities and alternatives at 31 December 2024, where the fair value has
been determined based on the most recent third-party valuations. The dates of these valuations typically precede the balance sheet date and have
been adjusted for any cash movements between the date of the valuation and the balance sheet date. Typically, the valuation approach and inputs
for these investments are not through to the balance sheet date unless there are indications of significant market movements.
3 Both APS and NAPS are in an IAS 19 accounting surplus, which would be available to the Group as a refund upon wind up of the scheme. This refund
is restricted due to withholding taxes that would be payable by the Trustee arising on both the net pension asset and the future contractual minimum
funding requirements.
4 The net deferred tax asset recognised on the net employee benefit asset (2023: asset) was €34 million at 31 December 2024 (2023: €48 million).
The defined benefit obligation includes €20 million (2023: €20 million) arising from unfunded plans.
Strategic Report
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Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
220
ii Amounts recognised in the Income statement
Pension costs charged to operating result are:
€ million
2024
2023
Defined benefit plans:
Current service cost
1
1
Administrative expenses
19
17
20
18
Defined contribution plans
292
279
Pension costs recorded as employee costs
312
297
€ million
2024
2023
Interest income on scheme assets
(1,041)
(1,117)
Interest expense on scheme liabilities
951
955
Interest expense on asset ceiling
27
59
Net financing credit relating to pensions
(63)
(103)
iii Amounts recognised in the Statement of other comprehensive income
€ million
2024
2023
Return on plan assets excluding interest income
2,024
857
Remeasurement of plan liabilities from changes in financial assumptions
(1,592)
314
Remeasurement of plan liabilities from changes in demographic assumptions
(235)
55
Remeasurement of experience losses
(208)
430
Remeasurement of the APS and NAPS asset ceilings
(220)
(583)
Pension remeasurements (charged)/credited to Other comprehensive income
(231)
1,073
Tax arising on pension remeasurements
25
3
Pension remeasurements charged to Other comprehensive income, net of tax
(206)
1,076
c Fair value of scheme assets
i Investment strategies
For both APS and NAPS, the Trustee has ultimate responsibility for decision-making on investments matters, including the asset-
liability matching strategy. The latter is a form of investing designed to match the movement in pension plan assets with the
movement in the projected benefit obligation over time. The Trustees’ investment committee adopts an annual business plan which
sets out investment objectives and work required to support achievement of these objectives. The committee also deals with the
monitoring of performance and activities, including work on developing the strategic benchmark to improve the risk return profile
of the scheme where possible, as well as having a trigger-based dynamic governance process to be able to take advantage of
opportunities as they arise. The investment committee reviews the existing investment restrictions, performance benchmarks and
targets, as well as continuing to develop the de-risking and liability hedging portfolio.
Both schemes use derivative instruments for investment purposes and to manage exposures to financial risks, such as interest rate,
foreign exchange, longevity and liquidity risks arising in the normal course of business. Exposure to interest rate risk is managed
through the use of Inflation-Linked Swap contracts. Foreign exchange forward contracts are entered into to mitigate the risk of
currency fluctuations. Longevity risk is managed through the use of buy-in insurance contracts, asset swaps and longevity swaps.
Along with existing contracts with Rothesay Life (as detailed in note 34c(iii)) and following the completion of a further longevity
swap in 2024, APS is 100% protected against all longevity risk and fully protected in relation to all pensions that were already being
paid as at 31 March 2018. APS is nearly 90% protected against interest rates and inflation (on a Retail Price Index (RPI) basis). NAPS
is 95% protected against interest rates and inflation (on a Consumer Price Index (CPI) basis).
The assets held by APS and NAPS are split between ‘return seeking assets’ and ‘liability matching assets’ depending on the maturity
of each scheme. At 31 December 2024, the actual asset allocation for NAPS was 20% (2023: 19%) in return seeking assets and 80%
(2023: 81%) in liability matching investments. For NAPS, the Trustee agreed an updated investment framework with British Airways
as part of the Scheme’s 31 March 2021 actuarial valuation agreement. The Trustee aims towards an overall asset allocation with an
agreed modest expected return relative to liabilities and sufficient liquidity to manage investment risk appropriately on an ongoing
basis. The actual asset allocation for APS at 31 December 2024 was 1% (2023: 1%) in return seeking assets and 99% (2023: 99%)
in liability matching investments. NAPS uses Liability Driven Investments (LDIs) to effectively hedge volatility in the scheme liabilities.
This is achieved through direct bond holdings as opposed to the use of derivatives and, as such, leverage is low. Accordingly,
as at 31 December 2024, NAPS has not been required to raise additional cash or liquidate existing assets in order to fund
derivative positions.
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International Airlines Group | Annual Report and Accounts 2024
221
ii Movement in scheme assets
A reconciliation of the opening and closing balances of the fair value of scheme assets is set out below:
€ million
2024
2023
1 January
23,187
23,668
Interest income
1,041
1,114
Administrative expenses
(18)
(14)
Return on plan assets excluding interest income
(2,024)
(857)
Employer contributions1
38
49
Employee contributions
–
8
Benefits paid
(1,223)
(1,065)
Exchange movements
948
284
31 December
21,949
23,187
1
Includes employer contributions to APS of €1 million (2023: €1 million) and to NAPS of €nil (2023: €nil) of which deficit-funding payments
represented €nil for APS (2023: €nil) and €nil for NAPS (2023: €nil).
iii Composition of scheme assets
Scheme assets held by the Group at 31 December comprise:
2024
€ million
APS
NAPS
Other
Total
2023
Return seeking investments
Listed equities – UK
8
120
–
128
123
Listed equities – rest of world
1
912
160
1,073
602
Private equities
27
625
15
667
721
Properties
–
1,307
12
1,319
1,591
Alternative investments
27
1,702
–
1,729
1,732
63
4,666
187
4,916
4,769
Liability matching investments
Government issued fixed bonds
1,168
4,458
156
5,782
6,120
Government issued index-linked bonds
646
8,741
13
9,400
10,320
Asset and longevity swaps
872
–
–
872
899
Insurance contract
3,224
–
37
3,261
3,391
5,910
13,199
206
19,315
20,730
Other
Cash and cash equivalents
79
671
10
760
697
Derivative financial instruments
(233)
(2,852)
10
(3,075)
(3,015)
Other investments
–
29
4
33
6
(154)
(2,152)
24
(2,282)
(2,312)
Total scheme assets
5,819
15,713
417
21,949
23,187
The fair values of the Group’s scheme assets, which are not derived from quoted prices on active markets, are determined
depending on the nature of the inputs used in determining the fair values (see note 30b for further details) and using the following
methods and assumptions:
• private equities are valued at fair value based on the most recent transaction price or third-party net asset, revenue or earnings-
based valuations that generally result in the use of significant unobservable inputs. The dates of these valuations typically precede
the balance sheet date and have been adjusted for any cash movements between the date of the valuation and the balance sheet
date. Typically, the valuation approach and inputs for these investments are not updated through to the balance sheet date unless
there are indications of significant market movements.
• properties are valued based on an analysis of recent market transactions supported by market knowledge derived from third-party
professional valuers that generally result in the use of significant unobservable inputs.
• alternative investments fair values, which predominantly include holdings in investment and infrastructure funds, are determined
based on the most recent available valuations applying the Net Asset Value methodology and issued by fund administrators or
investment managers and adjusted for any cash movements having occurred from the date of the valuation to the balance sheet
date. The dates of these valuations typically precede the balance sheet date and have been adjusted for any cash movements
between the date of the valuation and the balance sheet date. Typically, the valuation approach and inputs for these investments
are not updated through to the balance sheet date unless there are indications of significant market movements.
• other investments predominantly includes: interest receivable on bonds; dividends from listed and private equities that have been
declared but not received at the balance sheet date; receivables from the sale of assets for which the proceeds have not been
collected at the balance sheet date; and payables for the purchase of assets which have not been settled at the balance sheet date.
• derivative financial instruments are entered into predominantly to mitigate interest rate and inflation rate risks. These derivative
financial instruments are stated at their fair value using pricing models and relevant market data as at the balance sheet date.
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Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
222
• asset and longevity swaps - APS has a contract with Rothesay Life, entered into in 2010 and extended in 2013, which covers 25%
(2023: 25%) of the pensioner liabilities for an agreed list of members. Under the contract, to reduce the risk of long-term longevity
risk, Rothesay Life makes benefit payments monthly in respect of the agreed list of members in return for the contractual return
receivable on a portfolio of assets (made up of quoted government debt) held by the scheme and the contractual payments made
by APS to Rothesay Life on the longevity swaps. The Group holds the portfolio of assets at their fair value, with the government
debt held at their quoted market price and the swaps accounted for at their estimated discounted future cash flows.
During 2011, APS entered into a longevity swap with Rothesay Life, which covers an additional 21% (2023: 21%) of the pensioner
liabilities for the same agreed list of members as the 2010 contract. Under the longevity swap, to reduce the risk of long-term
longevity risk, APS makes a fixed payment to Rothesay Life each month reflecting the prevailing mortality assumptions at the
inception of the contract, and Rothesay Life makes a monthly payment to APS reflecting the actual monthly benefit payments
to members. The cash flows are settled net each month. If pensioners live longer than expected at inception of the longevity swap,
Rothesay Life will make payments to the scheme to offset the additional cost of paying pensioners and if pensioners do not live
as long as expected, then the scheme will make payments to Rothesay Life. The Group holds the longevity swap at fair value,
determined at the estimated discounted future cash flows.
• insurance contract – during 2018, the Trustee of APS secured a buy-in contract with Legal & General. The buy-in contract covers
all members in receipt of pensions from APS at 31 March 2018, excluding dependent children, receiving a pension at that date and
members in receipt of equivalent pension only benefits, who were alive on 1 October 2018. Benefits coming into payment for
retirements after 31 March 2018 are not covered. The contract covers benefits payable from 1 October 2018 onwards. The policy
covers approximately 60% of all benefits APS expects to pay out in future.
iv Effect of the asset ceiling
In measuring the valuation of the net defined benefit asset for each scheme, the Group limits such measurement to the lower of
the surplus in each scheme and the respective asset ceiling. The asset ceiling represents the present value of the economic benefits
available in the form of a refund or a reduction in future contributions after they are paid into the plan. The Group has determined
that the recoverability of such surpluses, including minimum funding requirements, will be subject to withholding taxes in the UK,
payable by the Trustee.
On 22 November 2023, the UK Government announced that it intended to reduce the withholding tax payable upon winding up
of pension schemes from 35% to 25%. This change was substantively enacted on 11 March 2024, and hence, was not reflected in the
2023 figures.
The future committed NAPS deficit contributions, as detailed in note 34a, are treated as minimum funding requirements under IAS 19
and are not recognised as part of the scheme assets or liabilities. The Group has determined that upon the wind up of the scheme,
that if the scheme is in surplus, including the incorporation of the minimum funding requirements, then the surplus will be available
as a refund or a reduction in future contributions after they are paid into the scheme. The recovery of such amounts is subject to UK
withholding tax payable by the Trustee. In measuring the recoverability of the surplus for each scheme, the Group limits such
measurement to the lower of the surplus in each scheme and the respective asset ceiling. The asset ceiling represents the present
value of the economic benefits available upon wind up of the scheme, less the application of withholding taxes in the UK, payable
by the Trustee, at 25%.
A reconciliation of the effect of the asset ceiling used in calculating the IAS 19 irrecoverable surplus in APS and NAPS is set out below:
€ million
2024
2023
1 January
735
1,248
Interest expense
27
59
Remeasurements1
(220)
(583)
Exchange movements
24
11
31 December
566
735
1
Included within remeasurements of the asset ceiling is an amount of €215 million (£184 million) that arose as a result of the reduction in the UK rate
of withholding tax of 35% to 25%, resulting in an increase in the net employee benefit asset.
d Present value of scheme liabilities
i Movement in scheme liabilities
A reconciliation of the opening and closing balances of the present value of the defined benefit obligations is set out below:
€ million
2024
2023
1 January
21,239
20,292
Current service cost
1
1
Interest expense
950
952
Remeasurements – financial assumptions1
(1,592)
314
Remeasurements – demographic assumptions
(235)
55
Remeasurements of experience losses
(208)
430
Benefits paid
(1,223)
(1,065)
Employee contributions
–
8
Exchange movements
864
252
31 December
19,796
21,239
1
Included in the remeasurements from financial assumptions is an amount of €1,959 million (2023: increase of €670 million) that reduces the scheme
liabilities relating to changes in the discount rates and €367 million (2023: reduction of €356 million) that increases the scheme liabilities relating
to changes in inflation rates.
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
223
ii Scheme liability assumptions
The principal assumptions used for the purposes of the IAS 19 valuations were as follows:
2024
2023
% per annum
APS
NAPS
Other
schemes
APS
NAPS
Other
schemes
Discount rate1
5.30
5.45
1.5 - 6.7
4.50
4.55
1.0 - 7.1
Rate of increase in pensionable pay2
3.30
–
2.0 - 5.0
3.20
–
2.0 - 5.0
Rate of increase of pensions in payment3
3.30
2.80
1.0 - 3.4
3.20
2.65
0.7 - 3.4
RPI rate of inflation
3.30
3.10
2.0 - 2.5
3.20
3.00
2.2 - 2.9
CPI rate of inflation
2.85
2.80
2.0 - 2.5
2.65
2.65
2.0 - 2.5
1
Discount rate is determined by reference to the yield on high quality corporate bonds of currency and term consistent with the scheme liabilities.
2 Rate of increase in pensionable pay, which reflects inflationary increases, is assumed to be in line with increases in RPI.
3 It has been assumed that the rate of increase of pensions in payment, which reflects inflationary increases, will be in line with CPI for NAPS and RPI
for APS as at 31 December 2024.
The current longevities underlying the values of the scheme liabilities were as follows:
Mortality assumptions
2024
2023
Life expectancy at age 60 for a:
• male currently aged 60
27.6
27.5
• male currently aged 40
29.0
28.8
• female currently aged 60
29.2
29.0
• female currently aged 40
31.3
31.2
For APS, the base mortality tables are based on the Agreed Valuation Basis (AVB) as agreed between British Airways and the
trustees of APS. For NAPS, the base mortality tables are based on analysis undertaken for the purpose of the triennial valuation
dated 31 March 2021. Future mortality improvements reflect the most recent model published by the UK actuarial profession’s
Continuous Mortality Investigation (CMI), being its 2023 model. These standard mortality tables, for both APS and NAPS, incorporate
adjustments specific to the demographics of scheme members, including a long-term improvement parameter of 1.00% per annum
(2023: 1.00%).
For schemes in the United States, mortality rates were based on the Agreed Valuation Basis (AVB) mortality tables incorporating
adjustments for the long-term impact COVID-19 is expected to have on mortality.
At 31 December 2024, the weighted average duration of the defined benefit obligation was 9 years for APS (2023: 9 years) and
13 years for NAPS (2023: 14 years). The weighted average duration of the defined benefit obligations was 1 to 16 years for other
schemes (2023: 2 to 16 years). The weighted average duration represents a single figure for the average number of years over which
the employee benefit liability discounted cash flows is extinguished and is highly dependent on movements in the aforementioned
discount rates.
iii Sensitivity analysis
Reasonable possible changes at the balance sheet date to significant valuation assumptions, holding other assumptions constant,
would have affected the present value of scheme liabilities by the amounts shown:
2024
Increase in scheme liabilities
2023
Increase in scheme liabilities
€ million
APS
NAPS
Other
schemes
APS
NAPS
Other
schemes
Discount rate (decrease of 50 basis points)1
242
858
25
278
1,020
29
Future pension growth (increase of 50 basis points)1
217
822
2
243
973
5
Future mortality rate (one year increase in life
expectancy)
290
338
21
301
394
22
1
Sensitivities smaller than those disclosed can be approximately interpolated from those sensitivities above.
Although the analysis does not take into account the full distribution of cash flows expected under the plan, it does provide an
approximation of the sensitivity of the assumptions shown.
Strategic Report
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Financial Statements
Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
224
35 Supplemental cash flow information
a Reconciliation of movements of liabilities to cash flows arising from financing activities
€ million
Bank, other
loans and
asset financed
liabilities
Convertible
bond
Lease
liabilities
Derivatives to
mitigate
volatility in
financial
liabilities
Total
Balance at 1 January 2024
6,380
735
8,967
180
16,262
Proceeds from borrowings
1,474
–
–
–
1,474
Repayment of borrowings
(410)
–
–
–
(410)
Repayment of lease liabilities
–
–
(1,737)
–
(1,737)
Settlement of derivative financial instruments
–
–
–
(151)
(151)
Total changes from financing cash flows
1,064
–
(1,737)
(151)
(824)
Interest paid
(233)
(9)
(472)
23
(691)
Interest expense
255
9
485
–
749
New leases and lease modifications
–
–
988
–
988
Fair value movements
–
281
–
(380)
(99)
Other non-cash movements
–
–
(7)
–
(7)
Exchange movements
217
–
422
2
641
Balance at 31 December 2024
7,683
1,016
8,646
(326)
17,019
€ million
Bank, other
loans and
asset
financed
liabilities
Convertible
bond
Lease
liabilities
Derivatives to
mitigate
volatility in
financial
liabilities
Total
Balance at 1 January 2023
9,760
605
9,619
(71)
19,913
Proceeds from borrowings
1,001
–
–
–
1,001
Repayment of borrowings
(4,268)
–
–
–
(4,268)
Repayment of lease liabilities
–
–
(1,731)
–
(1,731)
Settlement of derivative financial instruments
–
–
–
(119)
(119)
Total changes from financing cash flows
(3,267)
–
(1,731)
(119)
(5,117)
Interest paid
(488)
(9)
(472)
44
(925)
Interest expense
476
9
508
–
993
New leases and lease modifications
–
–
1,315
–
1,315
Fair value movements
–
130
–
322
452
Other non-cash movements
1
–
(13)
(2)
(14)
Exchange movements
(102)
–
(259)
6
(355)
Balance at 31 December 2023
6,380
735
8,967
180
16,262
b Reconciliation of movement in provisions included within Net cash flows from operating activities
€ million
2024
2023
Opening provisions
3,740
3,548
Non-cash additions recorded in operating profit
1,121
862
Non-cash releases of unused provisions recorded in operating profit
(142)
(133)
Other non-cash amounts recorded within operating profit
18
4
Cash settlements relating to operating provisions
(411)
(496)
Less non-cash carbon-related obligations reported in operating profit (note 35c)
(304)
(212)
Movements in provisions recorded within net cash flows from operating activities
282
25
Movements in provisions recorded within Other comprehensive income
93
24
Movements elsewhere within the Balance sheet
41
(6)
Unrealised currency differences arising on provisions recorded within operating profit
147
(68)
Non-cash extinguishment of Carbon-related obligations
(236)
(98)
Add non-cash carbon-related obligations reported in operating profit (note 35c)
304
212
Movements in provisions recorded in the Income statement outside of operating profit
130
103
Closing provisions (note 27)
4,501
3,740
1
For the year to 31 December 2024, the Group has elected to disaggregate the impact of Carbon-related obligations from the Movement in provisions
included within Net cash flows from operating activities within the Cash flow statement. The figures for the comparative year to 31 December 2023
have been updated accordingly.
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
225
c Reconciliation of movement in carbon assets and obligations included within Net cash flows from operating activities
€ million
2024
2023
Non-cash carbon-related obligations recorded in operating profit
304
212
Purchase of carbon-related assets
(242)
(262)
Movements in carbon-related assets and obligations recorded within net cash flows from operating activities
62
(50)
d Other items included within Net cash flows from operating activities
€ million
2024
2023
Non-cash equity settled share-based payments
61
50
Ineffectiveness arising on hedge accounting
–
6
Non-cash movements on derivative and non-derivative financial instruments
30
16
Settlement of interest rate derivatives
22
44
Other
(6)
(5)
107
111
e Details of Acquisition of property, plant and equipment and intangible assets within Net cash flows from investing activities
€ million
2024
2023
Purchase of property, plant and equipment – fleet
2,035
2,715
Purchase of property, plant and equipment – other
296
193
Purchase of intangible assets
485
374
2,816
3,282
1
During the year to 31 December 2024, the Group has presented Carbon-related assets separately from Intangible assets and now includes these
amounts within Carbon-related and other assets (note 20) with the associated cash flows now presented within Net cash flows from operating
activities (see note 35c). The 2023 details have been updated accordingly. Refer to notes 2 and 37 for further information.
36 Related party transactions
The following transactions took place with related parties for the financial years to 31 December:
€ million
2024
2023
Sales of goods and services
Sales to associates1
6
5
Sales to significant shareholders2
246
261
Purchases of goods and services
Purchases from associates3
76
72
Purchases from significant shareholders2
181
131
Receivables from related parties
Amounts owed by associates4
20
18
Amounts owed by significant shareholders5
91
136
Payables to related parties
Amounts owed to associates6
10
6
Amounts owed to significant shareholders5
15
12
1
Sales to associates: Consisted primarily of sales for airline-related services to Dunwoody Airline Services (Holding) Limited (‘Dunwoody’) of €5 million
(2023: €4 million) and €1 million (2023: €1 million) to Serpista, S.A., Multiservicios Aeroportuarios, S.A., Empresa Hispano Cubana de Mantenimiento
de Aeronaves, Ibeca, S.A. and Sociedad Conjunta para la Emisión y Gestión de Medios de Pago, EFC, S.A.
2 Sales to and purchases from significant shareholders principally relates to interline services, the purchase of cargo capacity, the provision of
maintenance services and the income from licensing of the Avios brand with Qatar Airways (Q.C.S.C.).
3 Purchases from associates: Consisted primarily of €50 million of airport auxiliary services purchased from Multiservicios Aeroportuarios, S.A. (2023:
€41 million), €15 million of maintenance services received from Serpista, S.A. (2023: €17 million) and €11 million of handling services provided by
Dunwoody (2023: €13 million).
4 Amounts owed by associates: Consisted primarily of €19 million from a long-term loan provided to LanzaJet, Inc. (2023: €17 million) and €1 million of
services provided to Multiservicios Aeroportuarios, S.A., Serpista, S.A., Dunwoody, Empresa Hispano Cubana de Mantenimiento de Aeronaves, Ibeca,
S.A., Empresa Logística de Carga Aérea, S.A., Sociedad Conjunta para la Emisión y Gestión de Medios de Pago, EFC, S.A., Viajes AME, S.A.U. and
Mundiplan Turismo y Ocio, S.L. (2023: €1 million).
5 Amounts owed by and to significant shareholders related to Qatar Airways (Q.C.S.C.).
6 Amounts owed to associates: Consisted primarily of €7 million of auxiliary airport services to Multiservicios Aeroportuarios, S.A. and Dunwoody
(2023: €3 million) and €3 million of maintenance of airport equipment to Serpista, S.A. (2023: €2 million).
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
226
During the year to 31 December 2024 British Airways met certain costs of administering its retirement benefit plans, including
the provision of support services to the Trustees. Costs borne on behalf of the retirement benefit plans amounted to €nil (2023:
€1 million) in relation to the costs of the Pension Protection Fund levy.
The Group has transactions with related parties that are conducted in the normal course of the airline and loyalty operating
companies, which include the provision of airline and related services and loyalty services. All such transactions are carried out on
an arm’s length basis.
For the year to 31 December 2024, the Group has not made any provision for expected credit loss arising relating to amounts owed
by related parties (2023: €nil).
Significant shareholders
In this instance, significant shareholders are those parties who have the power to participate in the financial and operating
policy decisions of the Group, as a result of their shareholdings in the Group, but who do not have control over these policies.
At 31 December 2024, the only significant shareholder of the Group was Qatar Airways (Q.C.S.C.).
At 31 December 2024 the Group had no cash deposit balances with shareholders, who were not significant shareholders, holding
a participation of more than 3% (2023: none).
Board of Directors and Management Committee remuneration
Compensation received by the Group’s Board of Directors and Management Committee, in 2024 and 2023 is as follows:
Year to 31 December
€ million
2024
2023
Base salary, fees and benefits
Board of Directors
Short-term benefits
5
4
Share-based payments
–
1
Management Committee
Short-term benefits
17
15
Share-based payments
3
–
For the year to 31 December 2024, the Board of Directors includes remuneration for one executive director (31 December 2023:
one executive director). The Management Committee includes remuneration for 11 members (31 December 2023: 14 members)
and excludes remuneration for the one executive director.
The Company provides life insurance for the executive director and all members of the Management Committee. For the year to
31 December 2024, the Company’s obligation was €47,000 (2023: €45,000).
At 31 December 2024 the transfer value of accrued pensions covered under defined benefit pension obligation schemes, relating
to the current members of the Management Committee, totalled €4 million (2023: €4 million).
No loan or credit transactions were outstanding with directors or officers of the Group at 31 December 2024 (2023: €nil).
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
227
37 Change in accounting policies
The Group has applied the amendments to IAS 1 for the first for the year to 31 December 2024 with the year to 31 December 2023
restated to conform with the current presentation of the Balance sheet. Further information is given in note 2.
In addition, while the Group has maintained its accounting policy for emissions allowances, it has, during the year to 31 December
2024, changed how it presents the associated assets and liabilities in the Balance sheet and associated classification in the Cash flow
statement. Further information is given in note 2.
The following tables summarise the impacts of these changes on the Balance sheet as at 31 December 2023 and on the Cash flow
statement for the year to 31 December 2023:
Consolidated balance sheet (extract as at 31 December 2023)
€ million
As reported
IAS 1
amendments
Carbon-
related
adjustments
Restated
Non-current assets
Intangible assets
3,909
–
(577)
3,332
Carbon-related and other non-current assets
432
–
330
762
Other
22,635
–
–
22,635
26,976
–
(247)
26,729
Current assets
Carbon-related and other current assets
1,574
–
247
1,821
Other
9,130
–
–
9,130
10,704
–
247
10,951
Total assets
37,680
–
–
37,680
Total equity
3,278
–
–
3,278
Non-current liabilities
Borrowings
13,831
(726)
–
13,105
Other non-current liabilities
3,592
–
–
3,592
17,423
(726)
–
16,697
Current liabilities
Borrowings
2,251
726
–
2,977
Other current liabilities
14,728
–
–
14,728
16,979
726
–
17,705
Total liabilities
34,402
–
–
34,402
Total equity and liabilities
37,680
–
–
37,680
Consolidated cash flow statement (extract for the year to 31 December 2023)
Year to 31 December
€ million
As reported
Carbon-
related
adjustments
Restated
Cash flows from operating activities
Operating profit
3,507
–
3,507
Increase in provisions (excluding carbon-related obligations)
237
(212)
25
Purchase of carbon-related assets net of the change in carbon-related obligations
–
(50)
(50)
Other cash flows from operating activities
1,120
–
1,120
Net cash flows from operating activities
4,864
(262)
4,602
Cash flows from investing activities
Acquisition of property, plant and equipment and intangible assets
(3,544)
262
(3,282)
Other cash flows from investing activities
121
–
121
Net cash flows from investing activities
(3,423)
262
(3,161)
Net cash flows from financing activities
(5,194)
–
(5,194)
Net decrease in cash and cash equivalents
(3,753)
–
(3,753)
Net foreign exchange differences
(2)
–
(2)
Cash and cash equivalents at 1 January
9,196
–
9,196
Cash and cash equivalents at year end
5,441
–
5,441
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Notes to the accounts continued
International Airlines Group | Annual Report and Accounts 2024
228
38 Post balance sheet events
Partial redemption of 2027 and 2029 bonds
On 17 January 2025, the Group paid €574 million to redeem, at a net discount, €577 million of the notional value of its unsecured
bonds in advance of maturity. The notional value of the bonds redeemed amounted to €277 million of the €500 million fixed rate
bond 2027 and €300 million of the €700 million fixed rate bond 2029. In addition, the Group paid accrued interest for the bonds
that were redeemed amounting to €11 million. Further information relating to these two bonds is given in note 26b.
Completion of share buyback programme
As detailed in notes 3 and 31, on 8 November 2024 the Group announced a €350 million share buyback programme, with an
expected completion date of February 2025. The shares purchased under the programme will be cancelled at the Annual General
Meeting in June 2025.
IAG Loyalty payment of historical VAT to HMRC in the UK
As detailed in note 10g and reported in prior years, HMRC in the UK has been considering the appropriate VAT accounting that
should be applied by IAG Loyalty. In October 2024, HMRC issued the Group with its decision letter relating to the appropriate VAT
accounting, which differs to the accounting approach applied by IAG Loyalty. Subsequent to 31 December 2024 and prior to the
date of this report, the Group appealed this matter to the First-tier Tribunal (Tax) in the UK. In order to advance the case to the
First-tier Tribunal (Tax), without admission of liability, the Group paid to HMRC €673 million (£557 million). Of these amounts,
the Group expects to recover €260 million (£215 million) through input VAT for certain of its subsidiaries, with the residual
€413 million (£342 million), being refunded if the matter is resolved in the Group’s favour.
In addition, subsequent to 31 December 2024 and prior to the date of this report, the Group applied to the High Court in the UK
for a judicial review of whether IAG Loyalty had a legitimate expectation that it could rely on a historical ruling issued by HMRC.
As at the date of this report, the Group is awaiting confirmation as to whether its application for a judicial review has been accepted.
Final dividend
A final dividend of €0.06 per share was proposed by the Board of Directors on 27 February 2025 (31 December 2023: €nil).
It is payable from 30 June 2025 to shareholders who are on the register at 27 June 2025. The final dividend amounting to €288
million, calculated based on the number of shares in issue less treasury shares at the close of trading on 27 February 2025, has not
been recognised as a liability in these consolidated financial statements. It will be recognised in total equity in the year
to 31 December 2025.
Share buyback programme
On 27 February 2025 the Board approved a share buyback programme of up to €1,000 million (31 December 2023: €nil) to be
completed in up to 12 months from the date of this report.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
229
The performance of the Group is assessed using a number of alternative performance measures (APMs), some of which have been
identified as key performance indicators of the Group. These measures are not defined under International Financial Reporting
Standards (IFRS), should be considered in addition to IFRS measurements, may differ to definitions given by regulatory bodies
applicable to the Group and may differ to similarly titled measures presented by other companies. They are used to measure the
outcome of the Group’s strategy based on the Group’s strategic imperatives of: strengthening our core; driving earnings growth
through asset-light businesses; and operating under a strengthened financial and sustainability framework.
During 2024, the Group has introduced the Gross debt to EBITDA before exceptional items measure. This measure is used by the
Group, in conjunction with the Net debt to EBITDA before exceptional items measure, in monitoring the Group’s leverage and to
enable users to supplement their assessment of the Group’s financial headroom and performance against its peers. Other than the
aforementioned change, the Group has made no changes to its pre-existing disclosures and treatments of APMs compared to those
disclosed in the Annual report and accounts for the year to 31 December 2023.
The definition of each APM, together with a reconciliation to the nearest measure prepared in accordance with IFRS is presented below.
a Profit after tax before exceptional items
Exceptional items are those that in the Board’s and management’s view need to be separately disclosed by virtue of their size or
incidence to supplement the understanding of the entity’s financial performance. The Management Committee of the Group uses
financial performance on a pre-exceptional basis to evaluate operating performance and to make strategic, financial and operational
decisions, and externally because it is widely used by security analysts and investors in evaluating the performance of the Group
between reporting periods and against other companies.
While there have been four exceptional items recorded in 2024, there were no exceptional items recorded in 2023.
The table below reconciles the statutory Income statement to the Income statement before exceptional items of the Group:
Year to 31 December
€ million
Statutory
2024
Exceptional
items
Before
exceptional
items
2024
Statutory
2023
Exceptional
items
Before
exceptional
items
2023
Passenger revenue
28,274
–
28,274
25,810
–
25,810
Cargo revenue
1,234
–
1,234
1,156
–
1,156
Other revenue
2,592
–
2,592
2,487
–
2,487
Total revenue
32,100
–
32,100
29,453
–
29,453
Employee costs1
6,356
160
6,196
5,423
–
5,423
Fuel costs and emissions charges
7,608
–
7,608
7,557
–
7,557
Handling, catering and other operating costs
4,135
–
4,135
3,849
–
3,849
Landing fees and en-route charges
2,405
–
2,405
2,308
–
2,308
Engineering and other aircraft costs
2,729
–
2,729
2,509
–
2,509
Property, IT and other costs
1,120
–
1,120
1,058
–
1,058
Selling costs
1,082
–
1,082
1,155
–
1,155
Depreciation, amortisation and impairment
2,364
–
2,364
2,063
–
2,063
Net gain on sale of property, plant and equipment
(14)
–
(14)
(2)
–
(2)
Currency differences
32
–
32
26
–
26
Total expenditure on operations
27,817
160
27,657
25,946
–
25,946
Operating profit
4,283
(160)
4,443
3,507
–
3,507
Finance costs
(917)
–
(917)
(1,113)
–
(1,113)
Finance income
404
–
404
386
–
386
Net change in fair value of financial instruments
(237)
–
(237)
(11)
–
(11)
Net financing credit relating to pensions
63
–
63
103
–
103
Net currency retranslation (charges)/credits
(127)
–
(127)
176
–
176
Other non-operating credits2
94
(50)
144
8
–
8
Total net non-operating costs
(720)
(50)
(670)
(451)
–
(451)
Profit before tax
3,563
(210)
3,773
3,056
–
3,056
Tax3
(831)
140
(971)
(401)
–
(401)
Profit after tax
2,732
(70)
2,802
2,655
–
2,655
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Alternative performance measures
International Airlines Group | Annual Report and Accounts 2024
230
The rationale for each exceptional item is given below.
1 Restructuring costs
The exceptional charge of €160 million is attributable to the Iberia ground handling restructuring programme, which right-sizes
the Group’s ground handling function for the near term. The exceptional charge has been recorded within Employee costs in the
Income statement.
During 2024, the Group incurred cash outflows associated with the Iberia ground handling restructuring programme of €3 million,
with the remaining amounts expected to be paid through to 2032, dependent on the age of each individual that is part of the Iberia
ground handing restructuring programme.
The related tax credit was €40 million.
2 Termination of the agreement with Globalia to purchase Air Europa Holdings
The exceptional charge of €50 million represents the amount agreed with Globalia to terminate the agreement, signed on 23
February 2023, to purchase the remaining 80% of the share capital of Air Europa Holdings that the Group had not previously owned.
On 1 August 2024, the Group exercised its right to withdraw from the acquisition and, as such, the agreement was terminated. The
exceptional charge has been recorded within Other non-operating credits in the Income statement. There was no related tax impact
in the Income statement. The Group recognised the cash outflow impact of the termination agreement during 2024, recorded within
cash flows from investing activities within the Cash flow statement.
3 Changes to Spanish tax legislation
The exceptional tax credit of €100 million recorded in the year to 31 December 2024, relates to the revocation of Royal Decree-Law
3/2016 (RDL 3/2016) amounting to a net credit of €135 million, and the enactment of Law 7/2024 amounting to a charge of €35
million. These two items are described below:
(i) Revocation of RDL 3/2016
RDL 3/2016 for fiscal years 2016 to 2023 was revoked by the Tribunal Constitucional (Constitutional Court) in Spain on 18 January 2024.
Prior to the introduction of RDL 3/2016, the Company and the Spanish subsidiaries of the Group were permitted to offset up to 70%
of their taxable profits with historical accumulated tax losses (to the extent there were sufficient tax losses to do so) and the
impairment of subsidiaries was treated as deductible for tax purposes. With the introduction of the RDL 3/2016, this limitation of tax
losses applied to taxable profits was reduced to 25% and the deductibility for tax purposes of historical impairments of subsidiaries
that had occurred prior to 2013 was reversed. The revocation by the Tribunal Constitucional in January 2024 principally meant that
the loss limitation reverted to 70% and historical impairments in subsidiaries reverted to being deductible for tax purposes, giving
rise to the aforementioned net exceptional tax credit. The combination of the above gave rise to an exceptional current tax credit,
which has been partially offset by a net deferred tax charge.
During the year to 31 December 2024, the Group received €101 million from the Spanish tax authorities relating to fiscal years 2021
to 2023 as a result of a refund of current taxes. During the remainder of 2025, at the earliest, the Group expects to receive a further
€88 million of the claims relating to fiscal years 2016 to 2023.
(ii) Enactment of Law 7/2024
On 20 December 2024, the Spanish parliament enacted Law 7/2024, which reinstates the aforementioned tax measures that had
been previously declared unconstitutional by the Tribunal Constitucional (Constitutional Court). Law 7/2024 is effective from
1 January 2024, whereby the Spanish subsidiaries of the Group are permitted to offset only up to 25% of their taxable profits with
historical accumulated losses (to the extent there are sufficient tax losses to do so). In addition to the change in the loss limitation
rate, the non-deductibility of historical impairments in subsidiaries that occurred prior to 1 January 2013 has been reintroduced.
There was no cash flow impact in 2024 as a result of the enactment of Law 7/2024.
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
231
The table below provides a reconciliation of the statutory to pre-exceptional condensed alternative income statement by operating
segment for the years to 31 December 2024 and 2023:
Year to 31 December 2024
British Airways (£)
British Airways (€)
Iberia
Vueling
Aer Lingus
Million
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Passenger revenue
13,466
– 13,466
15,871
– 15,871
5,862
– 5,862
3,244
– 3,244
2,304
– 2,304
Cargo revenue
789
–
789
931
–
931
305
–
305
–
–
–
55
–
55
Other revenue
153
–
153
185
–
185
1,375
–
1,375
17
–
17
17
–
17
Total revenue
14,408
– 14,408
16,987
– 16,987
7,542
– 7,542
3,261
–
3,261
2,376
– 2,376
Employee costs
2,871
–
2,871
3,386
– 3,386
1,618 160
1,458
427
–
427
514
–
514
Fuel costs and
emissions charges
3,676
– 3,676
4,328
– 4,328
1,611
–
1,611
895
–
895
638
–
638
Ownership costs
1,134
–
1,134
1,337
– 1,337
461
–
461
279
–
279
164
–
164
Supplier costs
4,679
– 4,679
5,514
– 5,514
2,985
– 2,985
1,260
–
1,260
855
–
855
Total expenditure on
operations
12,360
– 12,360
14,565
– 14,565
6,675 160
6,515
2,861
–
2,861
2,171
–
2,171
Operating profit
2,048
– 2,048
2,422
– 2,422
867 (160) 1,027
400
–
400
205
–
205
Operating margin (%)
14.2%
14.2%
11.5%
13.6%
12.3%
12.3%
8.6%
8.6%
Year to 31 December 2024
IAG Loyalty (£)
IAG Loyalty (€)
Million
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Passenger revenue
1,247
–
1,247
1,470
– 1,470
Other revenue
1,183
–
1,183
1,392
– 1,392
Total revenue
2,430
–
2,430
2,862
– 2,862
Employee costs
88
–
88
104
–
104
Ownership costs
19
–
19
23
–
23
Supplier costs
1,903
–
1,903
2,240
– 2,240
Total expenditure on operations
2,010
–
2,010
2,367
– 2,367
Operating profit/(loss)
420
–
420
495
–
495
Operating margin (%)
17.3%
17.3%
Strategic Report
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Financial Statements
Sustainability Statement
Alternative performance measures continued
International Airlines Group | Annual Report and Accounts 2024
232
Year to 31 December 2023
British Airways (£)1
British Airways (€)1
Iberia
Vueling
Aer Lingus
Million
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Passenger revenue
12,668
– 12,668
14,558
– 14,558
5,262
– 5,262
3,181
–
3,181
2,209
– 2,209
Cargo revenue
757
–
757
869
–
869
275
–
275
–
–
–
55
–
55
Other revenue
141
–
141
161
–
161
1,421
–
1,421
17
–
17
10
–
10
Total revenue
13,566
– 13,566
15,588
– 15,588
6,958
– 6,958
3,198
–
3,198
2,274
– 2,274
–
–
–
–
Employee costs
2,559
– 2,559
2,939
– 2,939
1,284
–
1,284
399
–
399
471
–
471
Fuel costs and
emissions charges
3,825
– 3,825
4,394
– 4,394
1,496
– 1,496
907
–
907
639
–
639
Ownership costs
1,009
– 1,009
1,159
–
1,159
411
–
411
256
–
256
150
–
150
Supplier costs
4,829
– 4,829
5,546
– 5,546
2,827
– 2,827
1,240
– 1,240
789
–
789
Total expenditure on
operations
12,222
– 12,222
14,038
– 14,038
6,018
– 6,018
2,802
– 2,802
2,049
– 2,049
Operating profit
1,344
– 1,344
1,550
–
1,550
940
–
940
396
–
396
225
–
225
Operating margin (%)
9.9%
9.9%
13.5%
13.5%
12.4%
12.4%
9.9%
9.9%
Year to 31 December 2023
IAG Loyalty (£)1
IAG Loyalty (€)1
Million
Statutory
Exceptional
items
Before
exceptional
items
Statutory
Exceptional
items
Before
exceptional
items
Passenger revenue
844
–
844
961
–
961
Other revenue
1,209
–
1,209
1,395
– 1,395
Total revenue
2,053
–
2,053
2,356
– 2,356
Employee costs
79
–
79
89
–
89
Ownership costs
12
–
12
18
–
18
Supplier costs
1,595
–
1,595
1,828
– 1,828
Total expenditure on operations
1,686
–
1,686
1,935
– 1,935
Operating profit
367
–
367
421
–
421
Operating margin (%)
17.9%
17.9%
1
During the year 2024, the Group changed its internal organisation, resulting in BA Holidays, a previously fully owned and consolidated subsidiary
of British Airways Plc, being transferred from the British Airways segment to the IAG Loyalty segment, which aligns with the revised reporting to
the IAG MC. Accordingly, the Group has restated its previously reported segmental information for 2023. There is no change to the total segmental
results of the Group.
Strategic Report
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Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
233
b Adjusted earnings per share (KPI)
Adjusted earnings are based on results before exceptional items after tax and adjusted for earnings attributable to equity holders
and interest on convertible bonds, divided by the weighted average number of ordinary shares, adjusted for the dilutive impact,
when applicable, of the assumed conversion of the bonds and employee share schemes outstanding.
€ million
Note
2024
2023
Profit after tax attributable to equity holders of the parent
a
2,732
2,655
Exceptional items
a
(70)
–
Profit after tax attributable to equity holders of the parent before exceptional items
2,802
2,655
Income statement impact of convertible bonds
11
185
15
Adjusted profit
2,987
2,670
Weighted average number of ordinary shares in issue used for basic earnings per share
11
4,903
4,933
Weighted average number of ordinary shares used for diluted earnings per share
11
5,260
5,277
Basic earnings per share (€ cents)
55.7
53.8
Basic earnings per share before exceptional items (€ cents)
57.1
53.8
Adjusted earnings per share before exceptional items (€ cents)
56.8
50.6
c Ownership costs
Ownership costs represents the income statement impact of the historical purchase of capital assets and is defined as depreciation,
amortisation and impairment, arising on both property, plant and equipment and intangible assets, and the Net gain on sale of
property, plant and equipment. The Group believes that this measure is useful to the users of the financial statements in
understanding the impact of capital assets in deriving the operating result of the Group.
€ million
2024
2023
Depreciation, amortisation and impairment
2,364
2,063
Net gain on sale of property, plant and equipment
(14)
(2)
Ownership costs
2,350
2,061
d Airline non-fuel costs per ASK
The Group monitors airline unit costs (per available seat kilometre (ASK), a standard airline measure of capacity) as a means of
tracking operating efficiency of the core airline business. As fuel costs can vary with commodity prices, the Group monitors fuel
and non-fuel costs individually. Within non-fuel costs are the costs associated with generating Other revenue, which typically do not
represent the costs of transporting passengers or cargo and instead represent the costs of handling and maintenance for other
airlines, non-flight products in BA Holidays and costs associated with other miscellaneous non-flight revenue streams. Airline non-
fuel costs per ASK is defined as total operating expenditure before exceptional items, less fuel costs and emission charges and less
non-flight specific costs divided by total ASKs, and is shown on a constant currency basis (abbreviated to ‘ccy’).
€ million
Note
2024
Reported
Constant
currency
adjustment
2024 ccy
2023
Total expenditure on operations
a
27,817
(326)
27,491
25,946
Less: exceptional items in operating expenditure
a
160
–
160
–
Less: fuel costs and emission charges
a
7,608
(78)
7,530
7,557
Non-fuel costs
20,049
(248)
19,801
18,389
Less: non-flight specific costs
2,232
(43)
2,189
2,141
Airline non-fuel costs
17,817
(205)
17,612
16,248
ASKs (millions)
343,253
–
343,253
323,111
Airline non-fuel unit costs per ASK (€ cents)
5.19
–
5.13
5.03
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International Airlines Group | Annual Report and Accounts 2024
234
e Free cash flow (KPI)
Free cash flow represents the cash generated by the businesses and is defined as the net cash flows from operating activities taken
from the Cash flow statement, less the cash flows associated with the acquisition of property, plant and equipment and intangible
assets reported in net cash flows from investing activities from the Cash flow statement. The Group believes that this measure is
useful to the users of the financial statements in understanding the cash generating ability of the Group to support operations and
maintain its capital assets.
€ million
2024
20231
Net cash flows from operating activities
6,372
4,602
Acquisition of property, plant and equipment and intangible assets
(2,816)
(3,282)
Free cash flow
3,556
1,320
1
The 2023 results include reclassifications to conform with the current period presentation for Carbon-related assets. There is no change in the total
2023 reported Free cash flow. Further information is given in notes 2 and 37.
f Gross and Net debt to EBITDA before exceptional items (KPI)
To supplement total borrowings as presented in accordance with IFRS, the Group reviews both Gross debt to EBITDA before
exceptional items and Net debt to EBITDA before exceptional items to assess its level of gross and net debt in comparison to the
underlying earnings generated by the Group in order to evaluate the underlying business performance of the Group. These measures
are used to monitor the Group’s leverage and to assess financial headroom against internal and external security analyst and
investor benchmarks and their long-term industry expectations.
Gross debt is defined as long-term borrowings (both current and non-current). Net debt is defined as Gross debt, less cash, cash
equivalents and current interest-bearing deposits.
EBITDA before exceptional items is defined as operating result before exceptional items, interest, taxation, depreciation,
amortisation and impairment.
The Group believes that this additional measure, which is used internally to assess the Group’s financial capacity, is useful to the
users of the financial statements in helping them to see how the Group’s financial capacity has changed over the year. It is a measure
of the profitability of the Group and of the core operating cash flows generated by the business model.
€ million
Note
2024
2023
Gross debt: interest-bearing long-term borrowings
26
17,345
16,082
Less: Cash and cash equivalents
22
8,189
5,441
Less: Other current interest-bearing deposits
22
1,639
1,396
Net debt
7,517
9,245
Operating profit
a
4,283
3,507
Add: Depreciation, amortisation and impairment
a
2,364
2,063
EBITDA
6,647
5,570
Add: Exceptional items
a
160
–
EBITDA before exceptional items
6,807
5,570
Gross debt to EBITDA before exceptional items (times)
2.5
2.9
Net debt to EBITDA before exceptional items (times)
1.1
1.7
g Return on invested capital (KPI)
The Group monitors return on invested capital (RoIC) as it gives an indication of the Group’s capital efficiency relative to the capital
invested, as well as the ability to fund growth and to pay dividends. RoIC is defined as EBITDA before exceptional items, less fleet
depreciation adjusted for inflation, depreciation of other property, plant and equipment, and amortisation of software intangibles,
divided by average invested capital and is expressed as a percentage.
Invested capital is defined as the average of property, plant and equipment and software intangible assets over a 12-month period
between the opening and closing net book values. The fleet aspect of property, plant and equipment is inflated over the average age
of the fleet to approximate the replacement cost of the associated assets.
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International Airlines Group | Annual Report and Accounts 2024
235
€ million
Note
2024
2023
EBITDA before exceptional items
f
6,807
5,570
Less: Fleet depreciation multiplied by inflation adjustment
(2,246)
(1,976)
Less: Other property, plant and equipment depreciation
(234)
(194)
Less: Software intangible amortisation
(232)
(185)
4,095
3,215
Invested capital
Average fleet value1
13
18,068
16,919
Less: Average progress payments2
13
(892)
(993)
Fleet book value less progress payments
17,176
15,926
Inflation adjustment3
1.18
1.18
20,326
18,811
Average net book value of other property, plant and equipment4
13
2,387
2,143
Average net book value of software intangible assets5
17
976
737
Total invested capital
23,689
21,691
Return on invested capital
17.3%
14.8%
1
The average net book value of aircraft is calculated from an amount of €18,615 million at 31 December 2024 and €17,520 million at 31 December 2023.
2 The average net book value of progress payments is calculated from an amount of €870 million at 31 December 2024 and €914 million at 31
December 2023.
3 Presented to two decimal places and calculated using a 1.5% inflation (31 December 2023: 1.5% inflation) rate over the weighted average age of the
fleet at 31 December 2024: 11.6 years (31 December 2023: 11.0 years).
4 The average net book value of other property, plant and equipment is calculated from an amount of €2,517 million at 31 December 2024 and €2,256
million at 31 December 2023.
5 The average net book value of software intangible assets is calculated from an amount of €1,115 million at 31 December 2024 and €837 million at 31
December 2023.
h Results on a constant currency basis
Movements in foreign exchange rates impact the Group’s financial results. The IAG Board and Management Committee review the
results, including revenue and operating costs at constant rates of exchange. These financial measures are calculated at constant
rates of exchange based on a retranslation, at prior year exchange rates, of the current year’s results of the Group. Although
the Board and Management Committee do not believe that these measures are a substitute for IFRS measures, the Board and
Management Committee do believe that such results excluding the impact of currency fluctuations year-on-year provide additional
useful information to investors regarding the Group’s operating performance on a constant currency basis. Accordingly, the financial
measures at constant currency within the discussion of the Group Financial review should be read in conjunction with the
information provided in the consolidated financial statements.
The following table represents the main average and closing exchange rates for the reporting periods. Where 2024 figures are
stated at a constant currency basis, the 2023 rates stated below have been applied:
Foreign exchange rates
Weighted average
Closing
2024
2023
2024
2023
Pound sterling to euro
1.18
1.15
1.21
1.16
Euro to US dollar
1.09
1.09
1.04
1.09
Pound sterling to US dollar
1.28
1.26
1.26
1.27
i Liquidity
The Board and the Management Committee monitor liquidity in order to assess the resilience of the Group to adverse events and
uncertainty and develop funding initiatives to maintain this resilience.
Liquidity is used by analysts, investors and other users of the financial statements as a measure of the financial health and resilience
of the Group.
Liquidity is defined as Cash and cash equivalents plus Current interest-bearing deposits, plus Committed general undrawn facilities
and Committed aircraft undrawn facilities.
€ million
Note
2024
2023
Cash and cash equivalents
22
8,189
5,441
Current interest-bearing deposits
22
1,639
1,396
Committed and undrawn general facilities
29f
3,344
4,359
Committed and undrawn aircraft facilities
29f
134
375
Overdrafts and other facilities
29f
56
53
Total liquidity
13,362
11,624
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Sustainability Statement
Alternative performance measures continued
International Airlines Group | Annual Report and Accounts 2024
236
Subsidiaries
British Airways
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
BA and AA Holdings Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
BA Call Centre India Private Limited (callBA)
F-42, East of Kailash, New Delhi, 110065
Call centre
India
100%
BA Cityflyer Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Airline operations
England
100%
BA Euroflyer Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Airline operations
England
100%
BA European Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
BA Excepted Group Life Scheme Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Life insurance
England
100%
BA Healthcare Trust Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
BA Holdco Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
BA Number One Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
BA Number Two Limited
IFC 5, St Helier, JE1 1ST
Holding company
Jersey
100%
Bealine Plc
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
BritAir Holdings Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
British Airways (BA) Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
British Airways 777 Leasing Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft leasing
England
100%
British Airways Associated Companies Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
British Airways Avionic Engineering Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance
England
100%
British Airways Capital Limited
Queensway House, Hilgrove Street, St Helier, JE1 1ES
Aircraft financing
Jersey
100%
British Airways Holdings B.V.
Strawinskylaan 3105, Atrium, Amsterdam, 1077ZX
Holding company
Netherlands
100%
British Airways Interior Engineering Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance
England
100%
British Airways Leasing Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft leasing
England
100%
British Airways Maintenance Cardiff Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance
England
100%
British Airways Pension Trustees (No 2) Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Trustee company
England
100%
British Midland Airways Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
British Midland Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
Gatwick Ground Services Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Ground services
England
100%
Speedbird Insurance Company Limited*
Canon’s Court, 22 Victoria Street, Hamilton, HM 12
Insurance
Bermuda
100%
British Airways Engineering Gatwick Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance
England
100%
Avios Group (AGL) Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Management of airline
loyalty reward currency
England
86%1
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Sustainability Statement
Group investments
International Airlines Group | Annual Report and Accounts 2024
237
Iberia
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
Compañía Operadora de Corto y Medio Radio Iberia Express, S.A.*
Calle Alcañiz 23, Madrid, 28006
Airline operations
Spain
100%
Compañía Explotación Aviones Cargueros Cargosur, S.A.
Calle Martínez Villergas 49, Madrid, 28027
Cargo transport
Spain
100%
Iberia LAE México SA de CV
Xochicalco 174, Col. Narvarte, Alcaldía Benito Juárez,
Mexico City, 03020
Aircraft technical
assistance
Mexico
100%
Iberia Líneas Aéreas de España, S.A. Operadora*
Calle Martínez Villergas 49, Madrid, 28027
Airline operations and
maintenance
Spain
100%2
Iberia Operadora UK Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%1
Iberia Tecnología, S.A.*
Calle Martínez Villergas 49, Madrid, 28027
Aircraft maintenance
Spain
100%
South Europe Ground Services, S.L.
Avenida de la Hispanidad 6, Madrid, 28042
Ground handling services
Spain
100%
Iberia Desarrollo Barcelona, S.L.*
Avenida de les Garrigues 38-44, Edificio B,
El Prat de Llobregat, Barcelona, 08220
Airport infrastructure
development
Spain
75%
Fly Level Barcelona LH, S.L.
Calle Catalunya 83, Viladecans, Barcelona, 08840
Airline operations
Spain
50%
Avios Group (AGL) Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Management of airline
loyalty reward currency
England
14%1
Aer Lingus
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
Aer Lingus (Ireland) Limited
Dublin Airport, Dublin
Provision of human resources
support to fellow group companies
Republic of
Ireland
100%
Aer Lingus 2009 DCS Trustee Limited
Dublin Airport, Dublin
Trustee
Republic of
Ireland
100%
Aer Lingus Beachey Limited
Penthouse Suite, Analyst House, Peel Road, Douglas, IM1 4LZ
Dormant
Isle of Man
100%
Aer Lingus Group DAC*
Dublin Airport, Dublin
Holding company
Republic of
Ireland
100%3
Aer Lingus Limited*
Dublin Airport, Dublin
Airline operations
Republic of
Ireland
100%
Aer Lingus (UK) Limited
Victoria House, 15-17 Gloucester Street, Belfast, BT1 4LS
Airline operations
Northern
Ireland
100%
ALG Trustee Limited
33-37 Athol Street, Douglas, IM1 1LB
Trustee
Isle of Man
100%
Dirnan Insurance Company Limited
Canon’s Court, 22 Victoria Street, Hamilton, HM 12
Insurance
Bermuda
100%
Santain Developments Limited
Dublin Airport, Dublin
Dormant
Republic of
Ireland
100%
IAG Loyalty
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
Avios South Africa Proprietary Limited
Block C, 1 Marignane Drive, Bonaero Park, Gauteng, 1619
Dormant
South Africa
100%
IAG Loyalty Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
IAG Loyalty Retail Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Retail services
England
100%
British Airways Holidays
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Tour operator
England
100%
Overseas Air Travel Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Flight procurement
England
100%
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Corporate Governance
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Sustainability Statement
Group investments continued
International Airlines Group | Annual Report and Accounts 2024
238
IAG Cargo
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
Cargo Innovations Limited
Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow Airport,
Hounslow, Middlesex, TW6 2JS
Dormant
England
100%
Zenda Group Limited
Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow Airport,
Hounslow, Middlesex, TW6 2JS
Dormant
England
100%
Vueling
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
Yellow Handling, S.L.U
Calle Catalunya 83, Viladecans, Barcelona, 08840
Ground handling
services
Spain
100%
LEVEL
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
Fly Level UK Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant
England
100%
Openskies SASU
3 Rue le Corbusier, Rungis, 94150
Airline operations
France
100%
International Consolidated Airlines Group, S.A.
Name and address
Principal activity
Country of
incorporation
Percentage of
equity owned
AERL Holding Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company
England
100%
British Airways Plc*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Airline operations
England
100%4
Fly Level Barcelona LH, S.L.
Calle Catalunya 83, Viladecans, Barcelona, 08840
Airline operations
Spain
100%5
Fly Level, S.L.
El Caserío, Iberia Zona Industrial 2 (La Muñoza), Camino de la
Muñoza s/n, Madrid, 28042
Airline operations
Spain
100%
IAG Cargo Limited*
Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow
Airport, Hounslow, TW6 2JS
Air freight operations
England
100%
IAG Connect Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
In-flight eCommerce platform
Republic of
Ireland
100%
IAG GBS Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
IT, finance, procurement
services
England
100%
IAG GBS Poland sp z.o.o.*
Ul. Opolska 114, Krakow, 31-323
IT, finance, procurement
services
Poland
100%
IB Opco Holding, S.L.
Calle Martínez Villergas 49, Madrid, 28027
Holding company
Spain
100%2
Vueling Airlines, S.A.*
Calle Catalunya 83, Viladecans, Barcelona, 08840
Airline operations
Spain
99.5%6
* Principal subsidiaries
1
The Group holds 100% of both the nominal share capital and economic rights in Avios Group (AGL) Limited, held directly by British Airways Plc,
which owns 86% and Iberia Operadora UK Limited, which owns 14%.
2 The Group holds 49.9% of both the total nominal share capital and the total number of voting rights in IB Opco Holding, S.L. (and thus, indirectly,
in Iberia Líneas Aéreas de España, S.A. Operadora), such stake having almost 100% of the economic rights in these companies. The remaining shares,
representing 50.1% of the total nominal share capital and the total number of voting rights belong to a Spanish company incorporated for the
purposes of implementing the Iberia nationality structure.
3 The Group holds 49.75% of the total number of voting rights and the majority of the economic rights in Aer Lingus Group DAC. The remaining voting
rights, representing 50.25%, correspond to a trust established for implementing the Aer Lingus nationality structure.
4 The Group holds 49.9% of the total number of voting rights and 99.65% of the total nominal share capital in British Airways Plc, such stake having
almost 100% of the economic rights. The remaining nominal share capital and voting rights, representing 0.35% and 50.1% respectively, are held
by a trust established for the purposes of implementing the British Airways nationality structure.
5 The Group holds 100% of both the nominal share capital and economic rights in Fly Level Barcelona LH, S.L., held directly by Iberia, which owns
50.1% and the Company, which owns 49.9%.
6 The Group holds 99.5% of both the nominal share capital and economic rights in Vueling Airlines, S.A., held directly by Iberia, which owns 50.1%
and the Company, which owns 49.4%.
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Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
239
Associates
Name and address
Country of
incorporation
Percentage of
equity owned
Empresa Hispano Cubana de Mantenimiento de Aeronaves, Ibeca, S.A.
Carretera Aerocaribbean y Final, Terminal No 5
Jose Martí Airport, Wajay, Municipio Boyeros, Havana
Cuba
50%
Empresa Logística de Carga Aérea, S.A.
Carretera de Wajay km 1 ½, Jose Martí Airport, Havana
Cuba
50%
Mundiplan Turismo y Ocio S.L.
Calle Hermanos García Noblejas 41, Madrid, 28037
Spain
50%
Multiservicios Aeroportuarios, S.A.
Avenida de Manoteras 46, 2ª planta, Madrid, 28050
Spain
49%
Dunwoody Airline Services Limited
Building 552 Shoreham Road East, London Heathrow Airport, Hounslow, TW6 3UA
England
40%
Serpista, S.A.
Calle Cardenal Marcelo Spínola 10, Madrid, 28016
Spain
39%
Air Miles España, S.A.
Avenida de Bruselas 20, Alcobendas, Madrid, 28108
Spain
26.7%
Inloyalty by Travel Club, S.L.U.
Avenida de Bruselas 20, Alcobendas, Madrid, 28108
Spain
26.7%
Viajes Ame, S.A.U.
Avenida de Bruselas 20, Alcobendas, Madrid, 28108
Spain
26.7%
LanzaJet Inc.
520 Lake Cook Road, Suite 680, Deerfield, Illinois, 60015
USA
12.8%
Joint ventures
Name and address
Country of
incorporation
Percentage of
equity owned
Sociedad Conjunta para la Emisión y Gestión de Medios de Pago EFC, S.A.
Calle de O’Donnell 12, Madrid, 28009
Spain
50.5%
Other equity investments
The Group’s principal other equity investments are as follows:
Name and address
Country of
incorporation
Percentage of
equity owned
Currency
Shareholder’s
funds
(million)
Profit/(loss)
before tax
(million)
Air Europa Holdings S.L.1
Carretera Arenal - Llucmajor, km 21.5, Llucmajor, 07620
Spain
20%
€
32
7
Servicios de Instrucción de Vuelo, S.L.
El Caserío, Iberia Zona Industrial 2 (La Muñoza), Camino de la
Muñoza s/n, Madrid, 28042
Spain
19.9%
€
74
4
The Airline Group Limited
5th Floor, Brettenham House South, Lancaster Place, London,
WC2N 7EN
England
16.7%
£
208
–
Travel Quinto Centenario, S.A.
Calle Alemanes 3, Sevilla, 41004
Spain
10%
€
–
–
i6 Group Limited
Farnborough Airport, Ively Road, Farnborough, Hampshire,
GU14 6XA
England
7.4%
£
–
(2)
NAYAKJV1, SL
Carrer d'Osona 2, 08820 El Prat de Llobregat
Spain
5.0%
€
1
–
Monese Limited
Eagle House 163 City Road, London, EC1V 1NR
England
4.8%
£
8
(31)
1
The Shareholder funds and result before tax of Air Europa Holdings S.L. represent the data for the year to 31 December 2023 and are prepared under
Spanish GAAP. The Group does not have access to financial information other than that reported in the statutory financial statements of the
company, which are published subsequent to the authorisation of these consolidated financial statements.
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Financial Statements
Sustainability Statement
Group investments continued
International Airlines Group | Annual Report and Accounts 2024
240
LIABILITY STATEMENT OF DIRECTORS FOR THE PURPOSES ENVISAGED UNDER ARTICLE 8.1.b OF SPANISH ROYAL DECREE
1362/2007 OF 19 OCTOBER (REAL DECRETO 1362/2007).
At a meeting held on 27 February 2025, the directors of International Consolidated Airlines Group, S.A. state that, to the best of
their knowledge, the individual and consolidated financial statements for the year to 31 December 2024, prepared in accordance
with the applicable set of accounting standards and in single electronic format, give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole, and that
the individual and consolidated management reports include a fair review of the development and performance of the business and
the position of the Company and the undertakings included in the consolidation taken as a whole, together with the description of
the principal risks and uncertainties that they face.
27 February 2025
Javier Ferrán Larraz
Chairman
Luis Gallego Martín
Chief Executive Officer
Peggy Bruzelius
Eva Castillo Sanz
Margaret Ewing
Maurice Lam
Bruno Matheu
Heather Ann McSharry
Robin Phillips
Emilio Saracho Rodríguez de Torres
Lucy Nicola Shaw
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Financial Statements
Sustainability Statement
Statement of Directors’ responsibilities
International Airlines Group | Annual Report and Accounts 2024
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Sustainability Statement
Independent Auditor’s Report
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Financial Statements
Sustainability Statement
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Independent Auditor’s Report continued
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Strategic Report
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Sustainability Statement
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Adjusted earnings per share
Earnings are based on results before exceptional items after tax, adjusted for earnings
attributable to equity holders and income statement impact of convertible bonds, divided
by the weighted average number of ordinary shares, adjusted for the dilutive impact of the
assumed conversion of the bonds and employee share schemes outstanding
Airline non-fuel costs
Total operating expenditure before exceptional items, less fuel costs and emission charges and
less non-flight specific costs. Within non-fuel costs are the costs associated with generating
Other revenue, which typically do not represent the costs of transporting passengers or cargo
and instead represent the costs of handling and maintenance for other airlines, non-flight
products in BA Holidays and costs associated with other miscellaneous non-flight revenue
streams. Shown on a constant currency basis
Airline non-fuel costs per ASK
Airline non-fuel costs divided by ASK
Available seat kilometres (ASK)
The number of seats available for sale multiplied by the distance flown
Available tonne kilometres (ATK)
The number of tonnes of capacity available for the carriage of load (passenger and cargo)
multiplied by the distance flown
Block hours
Hours of service for aircraft, measured from the time that the aircraft leaves the gate at the
departure airport to the time that it arrives at the gate at the destination airport
Cargo revenue per CTK
Cargo revenue divided by CTK
Cargo tonne kilometres (CTK)
The number of tonnes of cargo carried that generate revenue (freight and mail) multiplied
by the distance flown
Dividend cover
The number of times the result for the year covers the dividends paid and proposed
EBITDA
Operating result before exceptional items, interest, taxation, depreciation, amortisation and
impairment
Emissions Trading System (ETS)
Emission Trading Systems are a market-based carbon pricing instrument that sets an explicit
price on emissions. Group airlines participate in the EU, UK and Swiss Emission Trading Systems
Free cash flow
Cash generated by the businesses, defined as the net cash flows from operating activities taken
from the Cash flow statement, less the cash flows associated with the acquisition of property,
plant and equipment and intangible assets reported in net cash flows from investing activities
from the Cash flow statement
Gross capex
Gross capital expenditure is the acquisition of property, plant and equipment and intangible
assets reported in the Group’s consolidated Cash flow statement and includes fleet, customer
product, IT, ETS allowances and infrastructure, including those assets initially purchased and
then subject to subsequent sale and leaseback transactions and recognised as right of use
assets
Interest cover
The number of times the profit/(loss) before taxation and exceptional items adding back net
interest expense and interest income cover the net interest expense and interest income
Invested capital
The average of property, plant and equipment and software intangible assets over a 12-month
period between the opening and closing net book values. The fleet aspect of property, plant
and equipment is inflated over the average age of the fleet to approximate the replacement
cost of the associated assets
Liquidity
Cash and cash equivalents plus Current interest-bearing deposits, plus committed general
undrawn facilities and committed aircraft undrawn facilities
Net debt
Current and long-term interest-bearing borrowings less cash and cash equivalents and current
interest-bearing deposits
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Additional information
Glossary
International Airlines Group | Annual Report and Accounts 2024
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Net Promoter Score (NPS)
The Net Promoter Score is a metric based on survey responses to the ‘likelihood to
recommend’ question and is calculated by subtracting the percentage of customers who are
‘Detractors’ (score 0–6, unlikely to recommend) from the percentage of customers who are
‘Promoters’ (score 9–10, extremely likely to recommend)
Operating margin
Operating result before exceptional items as a percentage of total revenue
Overall load factor
RTK expressed as a percentage of ATK
Passenger load factor
RPK expressed as a percentage of ASK
Passenger unit revenue per ASK
(PRASK)
Passenger revenue before exceptional items divided by ASK
Passenger revenue per RPK
(yield)
Passenger revenue before exceptional items divided by RPK
Punctuality
The industry’s standard, measured as the percentage of flights departing within 15 minutes
of schedule
Regularity
The percentage of flights completed to flights scheduled, excluding flights cancelled for
commercial reasons
Return on Invested Capital (RoIC) EBITDA, less fleet depreciation adjusted for inflation, depreciation of other property, plant and
equipment, and amortisation of software intangibles, divided by average invested capital and is
expressed as a percentage
Revenue passenger kilometres
(RPK)
The number of passengers that generate revenue carried multiplied by the distance flown
Revenue tonne kilometres (RTK)
The revenue load in tonnes multiplied by the distance flown
Sector
A one-way revenue flight
Sold cargo tonnes
The number of cargo tonnes sold, including freight, courier, mail and interline
Sustainable Aviation Fuel (SAF)
SAF is a fuel that is chemically almost identical to jet kerosene. The feedstocks for these fuels
(currently waste materials such as municipal waste or waste wood) absorb CO2 in their growth
cycle before this carbon is recycled into fuel and then emitted in the flight
Total capital
Total equity plus net debt
Total revenue per ASK (RASK)
Total revenue before exceptional items divided by ASK
Total operating expenditure
excluding fuel per ASK
Total operating expenditure before exceptional items excluding fuel divided by ASK
Total operating expenditure
per ASK (CASK)
Total operating expenditure before exceptional items divided by ASK
Total traffic revenue per ATK
Revenue from total traffic before exceptional items (passenger and cargo) divided by ATK
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Number in service with Group companies
Owned
Finance
lease
Operating
lease
Total
31 December
2024
Total
31 December
2023
Changes
since
31 December
2023
Future
deliveries
Options1
Airbus A319ceo
12
–
24
36
41
(5)
–
–
Airbus A320ceo
51
8
134
193
190
3
7
–
Airbus A320neo
–
46
28
74
66
8
47
30
Airbus A321ceo
14
–
28
42
43
(1)
–
–
Airbus A321neo
3
9
19
31
29
2
35
–
Airbus A321LR
–
–
8
8
8
–
–
–
Airbus A321XLR
3
–
–
3
–
3
11
14
Airbus A330-200
2
1
19
22
19
3
–
–
Airbus A330-300
4
4
12
20
20
–
–
–
Airbus A350-900
–
6
16
22
21
1
3
13
Airbus A350-1000
–
16
2
18
17
1
–
36
Airbus A380
5
7
–
12
12
–
–
–
Boeing 737-8200
–
–
–
–
–
–
25
100
Boeing 737-10
–
–
–
–
–
–
25
–
Boeing 777-200
40
–
3
43
43
–
–
–
Boeing 777-300
9
–
7
16
16
–
–
–
Boeing 777-9
–
–
–
–
–
–
18
24
Boeing 787-8
8
2
2
12
12
–
–
–
Boeing 787-9
1
8
9
18
18
–
–
–
Boeing 787-10
–
9
2
11
7
4
7
6
Embraer E190
9
–
11
20
20
–
–
–
Group total
161
116
324
601
582
19
178
223
1
The options to purchase 100 Boeing 737 aircraft allow for flexibility in the choice of variant.
Aircraft are reported based on their contractual definitions as opposed to their accounting determination. For accounting purposes, while all operating
leases are presented as lease liabilities, finance leases are presented as either lease liabilities or asset financed liabilities, depending on the nature of the
individual arrangement. See note 2 in the consolidated financial statements for further information.
As well as those aircraft in service, the Group also holds 11 aircraft (31 December 2023: 9) not in service.
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Aircraft fleet
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Total Group operations
2024
2023
20221
2021
20202
Traffic and capacity
Available seat km (ASK)
million
343,253
323,111
263,592
121,965
113,195
Revenue passenger km (RPK)
million
296,877
275,727
215,749
78,689
72,262
Cargo tonne km (CTK)
million
5,253
4,666
3,980
3,970
3,399
Passengers carried
‘000
122,047
115,559
94,726
38,864
31,275
Sold cargo tonnes
‘000
651
596
561
539
444
Sectors
741,653
714,562
619,122
307,519
267,748
Block hours
hours 2,276,790 2,137,749 1,781,829
892,455
820,983
Operations
Average headcount3
73,498
69,762
61,192
56,618
65,481
Aircraft in service at year end
601
582
558
531
533
Aircraft utilisation – long-haul (average hours per
aircraft per day)
hours
13.5
14.3
12.8
8.1
6.4
Aircraft utilisation – short-haul (average hours per
aircraft per day)
hours
8.9
8.3
7.7
4.5
2.7
Punctuality – within 15 minutes
%
77.8
72.2
61.7
86.4
88.8
Regularity
%
98.7
98.5
98.7
96.7
91.8
Financial
Passenger unit revenue per ASK (PASK)4
€ cents
8.24
7.99
7.38
4.78
4.92
Passenger revenue per RPK4
€ cents
9.52
9.36
9.02
7.41
7.71
Cargo revenue per CTK4
€ cents
23.49
24.77
40.58
42.14
38.42
Total revenue per ASK (RASK)4
€ cents
9.35
9.12
8.75
6.93
6.95
Average fuel price
$/metric tonne
795
883
1,074
587
376
Fuel cost per ASK4
€ cents
2.22
2.34
2.32
1.59
1.80
Operating (loss)/profit before depreciation and
amortisation (EBITDA)4
€ million
6,807
5,570
3,325
(1,017)
(2,291)
Total operating expenditure excluding fuel per ASK
(CASK ex. fuel)4
€ cents
5.84
5.69
5.96
7.78
9.03
Operating margin4
%
13.8
11.9
5.4
(35.1)
(55.8)
Total operating expenditure per ASK (CASK)4
€ cents
8.06
8.03
8.28
9.36
10.83
Dividend cover4
times
6.4
n/a
n/a
n/a
n/a
Interest cover4
times
8.4
5.1
1.4
(4.0)
(6.6)
Net debt
€ million
7,517
9,245
10,385
11,667
9,762
Equity
€ million
6,176
3,278
2,022
846
1,610
Net debt to EBITDA before exceptional items
times
1.1
1.7
3.1
(11.5)
(4.3)
Exchange rates - weighted average
Translation
£:€
1.18
1.15
1.17
1.15
1.13
Transaction
£:€
1.18
1.15
1.17
1.15
1.13
Transaction
€:$
1.09
1.09
1.05
1.20
1.13
Transaction
£:$
1.28
1.26
1.23
1.38
1.27
1
The 2022 results have been restated for the reclassification of the Net gain on sale of property, plant and equipment within Operating profit.
2 The 2020 results have been restated for the treatment of administration costs associated with the Group’s defined benefit pension schemes.
3 Average headcount in 2020, 2021 and 2022 includes those employees who were on furlough, wage support and equivalent schemes, including the
Temporary Redundancy Plan arrangements in Spain.
4 Figures are shown before exceptional items.
n/a: not applicable
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Operating and financial statistics
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Consolidated Non-Financial
Information Statement and
Sustainability Information
General requirements
263
ESRS 2 Preparation for CSRD
requirements
263
BP-1 General basis for preparation
264
BP-2 Disclosures in relation to
specific circumstances
265
Governance
268
Strategy
Environment (Planet)
275
ESRS E1 Climate change
Social (People and Prosperity)
292
ESRS S1 Own workforce
305
ESRS S2 Workers in the value
chain
307
ESRS S4 Consumers and end-users
Governance
309
ESRS G1 Business conduct
Appendix
314
Sustainability due diligence
314
Phase in reliefs taken
315
Calculation methodology and
factors
318
Datapoints from other EU
legislation
EU Taxonomy
323
EU Taxonomy
330
KPIs of non-financial
undertakings
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262
General requirements
ESRS 2 General disclosures
BP-1 General basis for preparation
International Consolidated Airlines Group (IAG) Consolidated
Non-Financial Information Statement and Sustainability
Information (together referred to as the ‘Sustainability
statement’ thereafter) complies with Spanish Law 11/2018,
of December 28, amending the Commercial Code, the
consolidated text of the Companies Law approved by Royal
Legislative Decree 1/2010, of July 2, Law 22/2015, of July 20,
on Auditing, in matters of non-financial and diversity
information, and Law 5/2021, of April 12, amending Article
49.6.II, fourth paragraph, of the Commercial Code. This
statement is prepared in accordance with the EU Corporate
Sustainability Reporting Directive (CSRD) on a voluntary basis.
For the disclosure of transitional requirements outlined by
the joint communication by the CNMV and ICAC released
on 27 November 2024, the Global Reporting Initiative
(GRI Standards), an international initiative for sustainability
reporting, has been applied.
IAG also complies with the 2018 UK Streamlined Energy and
Carbon Reporting regulation, the Task Force on Climate-related
Financial Disclosures (TCFD) recommendations, and the
EU Taxonomy Regulation (2020/852).
Chapters in IAG’s Annual Report that are not included within
the scope of this statement, but are relevant to addressing the
requirements of the CSRD include Business model, Corporate
governance, Stakeholder Engagement and Risk management
and principal risk factors.
References are provided in the appendix to this statement.
External review
The full contents of this Sustainability statement are
independently verified by a third party to limited assurance
standards in line with ISAE3000 (Revised) standards.
IAG is working towards reasonable assurance in the medium
term and is implementing internal controls accordingly.
Emissions data from intra-European flights is also
independently verified to reasonable assurance standards
within six months of the year end for compliance with the
UK and EU ETS, and for all flights for the UN CORSIA scheme.
Scope of this statement
IAG provides information about key environmental, social,
employee-related and human-rights-related issues, where this
is relevant to the Group and its activities. The scope of this
statement has been determined via a double materiality
assessment completed in 2024, details of which follow
in this statement.
The scope of environmental performance data and targets
relates to all IAG airlines, subsidiaries and cargo operations.
The scope of workforce and ethics and integrity data includes
all IAG operating companies. In both cases a number of
exceptions and assumptions have been applied and these
are clearly stated with rationale provided.
The scope of human rights and modern slavery reporting
relates to data from our operators and key aspects of the
IAG supply chain.
Group revenue is used to calculate revenue intensity data
points as required under section ‘E1 Climate Change’.
Scope of the value chain
This report covers sustainability impacts resulting from direct, upstream and downstream operations of IAG and its operating
companies. Examples of these operations include, but are not limited to:
Upstream
IAG
Downstream
Fuel production
Operation of own aircraft
Provision of travel and tourism services,
including hotels and car hire
Aircraft manufacturing, including
airframes, engines and components
Operation of leased aircraft
Aircraft leasing to other airlines
Leasing firms and other sources of capital
Own maintenance, repair and overhaul
(MRO)
Loyalty rewards programme and
associated benefits
Airports, air navigation service providers
(ANSP) and communications
Cargo operations
Freight forwarders
Ground services, including aircraft
handling and catering
Office operations
Other supply chain services
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Sustainability Statement
General requirements
International Airlines Group | Annual Report and Accounts 2024
263
BP-2 Disclosures in relation to specific
circumstances
Time horizon
Under the enterprise risk management (ERM), IAG assesses
the potential impact of principal risks over the next three years
against the strategic business plan (‘the plan’). IAG considers
risks to the plan over the short term (up to three years),
medium term (from three to five years) and in the longer
term (beyond five years).
This Sustainability statement is aligned to this risk assessment,
where short term (S) is defined as one to three years, medium
term (M) is up to five years and long term (L) is more than
five years.
To assess climate-change-related risks, IAG looks at a range
of timescales including up to 2030 and 2050. Group-wide
emerging risks are considered as they are identified, in addition
to key threats and trends faced by the industry over a
timeframe beyond the plan period. Longer term considerations
are assessed in parallel with the near-term priorities and
adaptations required by the Group.
Please refer to the Principal Risk and Uncertainties section
of this Annual Report for more information.
Value chain estimation
IAG has assessed all 15 categories of Scope 3 emissions
as defined by the global GHG Protocol. Please refer to section
E1 - Climate Change and the appendix of this statement for
more information.
Standardised conversion factors are used where data from
suppliers is not available, which means that as more data from
suppliers becomes available some values may be restated.
Any significant restatements will be provided in future reports
with explanations provided.
Sources of estimation and outcome uncertainty
For any specific cases where full-year data was not available
for selected metrics, estimates have been applied based
on business forecasts and data from prior months. Internal
governance is in place to ensure that any estimations made
are robust. Any prior-year restatements are indicated next
to relevant metrics with reasons provided. We have deemed
the following metrics in the table below to have a high outcome
of uncertainty based on known omissions in the dataset.
Metrics in this report that carry a high level of uncertainty (as per the definition above) include the following:
Metric
Key assumptions or omissions
Source of measurement uncertainty
Scope 3, Category 11
Activity relates to IAG loyalty programme members redeeming
Avios via IAG loyalty programmes only and excludes transfers
of Avios outside of IAG loyalty programmes
Methodology is under development to
assess ability to broaden reporting scope
Changes in preparation or presentation of sustainability information
IAG’s 2023 Sustainability report formed part of the Group’s Management Report. IAG also prepared a Consolidated Statement of
Non-Financial Information (NFIS) in 2023, required under Spanish Law 11/2018, of 28 December 2018, on non-financial information
and diversity (amending the Commercial Code, the revised Capital Companies Law approved by Legislative Royal Decree 1/2010, of
2 July 2010 and Audit Law 22/2015, of 20 July 2015). The NFIS contained additional environmental, social, employee-related and
human rights-related information to the Group’s Management Report, required as ‘Additional Disclosures’ under Spanish Law and
IAG’s EU Taxonomy disclosure.
For 2024, information previously disclosed within IAG’s NFIS is prepared within this Sustainability statement. This statement is
prepared within IAG’s management report in accordance with the CSRD Directive on a voluntary basis. It adheres to the European
Sustainability Reporting Standards (ESRS) and aligns to the example of the structure of the Sustainability statement presented by
EFRAG. Transitional provisions required by the communication issued by the CNMV and ICAC on 27 November 2024, under Spanish
Law 11/2018, are also included in this statement.
Reporting errors in prior periods
IAG reviews all data including from prior periods and has made the following correction to its sustainability metrics:
Metric
Change from prior
measurement
Comments
Difference to previously calculated figure
Net Scope 1
GHG
Emission
Reductions;
ETS
Correction
The IAG aggregated value for 2023 has been
corrected following the inclusion of net
emission reductions achieved in 2023 by Iberia,
Iberia Express and LEVEL under their
participation in the EU ETS. This information
was not available at the time of 2023 reporting
IAG’s annual net emission reductions from
participation in ETS schemes has increased from
2.60 million tCO2e, to 2.95 million tCO2e in 2023.
IAG’s 2023 total Scope 1 net emissions is corrected
to 22.67 million tCO2e, from 22.82 million tCO2e.
This change also reflects a <1% change in IAG’s 2023
total Scope 1 gross CO2 emissions accounting for the
relevant fuel captured under the EU ETS and SAF use
Disclosures stemming from other legislation or generally accepted sustainability reporting pronouncements
Please refer to BP-1 General basis for more information regarding the preparation of this Sustainability statement.
IAG’s most material environmental metric – Scope 1 emissions – receives additional independent reasonable assurance verification
each year as part of the legal requirements of EU, Swiss and UK ETS and the international Carbon Offsetting and Reduction Scheme
for International Aviation (CORSIA), within six months of the issuance of this report. Any material changes are restated in future
reports. Please find more information in the appendix to this Sustainability statement.
Phase-in provisions
Please refer to the appendix to this statement.
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Sustainability Statement
General requirements continued
International Airlines Group | Annual Report and Accounts 2024
264
Governance
GOV-1 Role of administrative, management and supervisory bodies; GOV-2 Information provided to and
sustainability matters addressed by the undertaking’s administrative, management and supervisory bodies
IAG has robust governance in place to ensure joined-up and progressive decisions on sustainability.
This ensures that wider stakeholder engagement is consistent with addressing IAG’s material issues, environmental priorities and
sustainability goals. An annual meeting planner for the Board ensures sustainability governance processes fit within the reporting
and disclosure framework of the Group.
The Group’s unique structure means that each individual operating company has a distinct sustainability programme. These are
regularly reviewed to ensure alignment with the Group’s sustainability strategy and principles, which covers material issues,
KPIs and engagement plans.
Please refer to the Corporate Governance section of this Annual Report for more information on IAG’s administrative, management
and supervisory bodies. Relevant forums and levels of responsibility for sustainability matters are indicated below.
IAG sustainability governance
Board
Remuneration Committee
Safety, Environment and
Corporate Responsibility
(SECR) Committee
Audit and Compliance
Committee
Sustainable Aviation Fuel
Steering Group
Management Committee
People Working Group
Sustainability
Steering Group
IAG sustainability network
Sustainability network working groups
n Introduced in 2020
Board/management committee
Frequency of meetings
Responsibility in relation to sustainability
Board
At least quarterly
Approval of strategy, major investments, risk management and controls
and review of progress against environment and people plans including
climate-related goals and targets
Safety, Environment
and Corporate Responsibility
(SECR) Committee
At least quarterly
Dedicated oversight of the Group’s sustainability programme and
alignment with strategic priorities, environmental sustainability
approval, and review of progress against environment and people plans.
Receives an update on material sustainability issues including
environmental KPIs on a quarterly basis. Provides a link between
operating company management committees and the IAG Board.
Receives training as required on sustainability topics. In 2024, SECR
Committee members (alongside the IAG Audit and Compliance
Committee) received training on the CSRD prior to approving the
material topics as determined by the IAG double materiality assessment
IAG Audit and Compliance
Committee
At least quarterly
Ensures appropriate processes and controls are in place to allow
compliance with relevant regulation and reporting requirements
and reviews the Annual Report and Accounts. In 2024, committee
members (alongside the IAG SECR) received training on the CSRD
prior to approving the material topics as determined by the IAG
double materiality assessment
IAG Management Committee
At least quarterly
Reviews and challenges Group programmes, the alignment of
operating-company-specific programmes with Group priorities
and strategy, and progress against plans
Operating companies’
management committees
At least quarterly
Reviews and challenges operating-company-specific environment
and people programmes
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International Airlines Group | Annual Report and Accounts 2024
265
Sustainability governance
Forum
Frequency of meetings
Responsibility in relation to sustainability
IAG Sustainability Steering
Group (SSG)
At least quarterly
Comprises senior representatives from across the Group who provide
oversight of environmental and social initiatives and reporting
IAG Sustainability Network (ISN)
Monthly calls and
three in-person
workshops
The ISN comprises more than 60 sustainability representatives across
the Group. This group supported the Group’s double materiality
assessment in 2024 by providing views on the impact materiality of
IROs identified, and meets monthly to provide updates on the work
to address material impacts, risks and opportunities (IROs). This forum
reports into the IAG Sustainability Steering Group (SSG). The IAG
Sustainability team also administers regular training to its operating
companies to support development of expertise across the Group
on key issues
Hangar 51 Governance
Committee
At least biannually
Reviews potential investments to consider emerging climate
technologies and partnerships with sustainability start-ups. Members
include the Chief Commercial Strategy Officer, Chief Financial and
Sustainability Officer and Chief Information, Procurement, Services
and Innovation Officer
Sustainability network working groups (cross-Group)
Forum
Frequency of meetings
Responsibility in relation to sustainability
Reporting and Disclosures
Working Group
Monthly
Designed to monitor IAG sustainability disclosures against our regulatory
requirements. Includes a subgroup focused on biodiversity issues
Waste Working Group
Monthly
This working group is focused on improving waste monitoring
processes from our operations and implementing waste reduction
and recycling projects to meet IAG’s 2025 targets
Sustainability KPI Working Group
Monthly
Forum for sharing best practice and implementing internal audit
requirements for the accurate reporting of environmental metrics.
Alignment of reporting with developing standards is ensured. Tracks
key metrics towards IAG’s Flightpath net zero strategy - for
presentation to the ISN, SSG and SECR
Carbon Efficiency Working Group Monthly
Forum comprises sustainability and fuel management teams who share
best practice on fuel efficiency initiatives to accelerate carbon
reductions in line with IAG Flightpath net zero strategy
Social Impact Working Group
Ad hoc
Forum to develop initiatives and track the value of IAG for societies.
Climate Strategy Working Group
At least quarterly
Forum for sustainability colleagues to develop the IAG Flightpath net
zero strategy and sustainability initiatives
Non-CO2 Working Group
Monthly
Prepares Group airlines for reporting requirements related to non-CO2
emissions in the EU and shares best practices to better understand
its environmental impact and possible mitigation initiatives
Sustainable Aviation Fuel (SAF) Governance
Forum
Frequency of meetings
Responsibility in relation to sustainability
IAG SAF Steering Group
At least quarterly
Comprises senior representatives from across the Group who provide
oversight of SAF strategic direction and approval for new purchases
and investments
IAG SAF Management Group
Monthly
A cross-Group meeting focusing on SAF strategy, projects and
progress. Reports into the IAG SAF Steering Group
Governance responsibilities
Individual
Frequency of reporting
Responsibility in relation to sustainability
IAG CEO
At least quarterly
Chairs the IAG Management Committee, updates the Board and ensures
Board-level decisions are directed into action across the Group
IAG Chief Financial and
Sustainability Officer
At least quarterly
Reports to the IAG CEO. A member of the IAG Management
Committee. Chairs the SSG and provides approval and direction of
Group programmes
IAG Group Sustainability Officer
Regularly as relevant
Reports to the IAG Chief Financial and Sustainability Officer. Chairs
the IAG Sustainability Network and is responsible for delivering IAG’s
Flightpath net zero strategy
IAG Group Head of People
Regularly as relevant
Reports to the IAG CEO. Responsible for delivering initiatives that
address material social issues in the Group
Wider governance
Wider governance processes integrate sustainability aspects. As part of the Group-wide ERM process, sustainable aviation and
people, culture and employee relations risks are presented biannually to the Audit and Compliance Committee and annually to the
Board. One-year financial plans and three-year business plans are coordinated by Group Finance and include sustainability aspects.
For more information, please refer to the Corporate Governance section of this Annual Report.
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GOV-3 Integration of sustainability-related performance in incentive schemes
IAG has a number of sustainability-linked annual incentives for over 7,500 senior executives and managers across the Group.
These incentives are designed to support IAG’s ambition to reduce the carbon intensity of its operations.
The incentives are reviewed and developed annually by the IAG Sustainability team, before being submitted as part of the IAG
financial incentives which are approved by the Board of Directors.
IAG-specific carbon
efficiency measure
Group grammes of CO2
per passenger kilometre
(gCO2/pkm)
Covers up to 10% of
the annual bonus for
senior executives
This measure reflects our progress towards our
sustainability target. It measures the fuel efficiency of our
flight operations, taking account of our network, aircraft
mix and passenger and cargo load factors. This KPI is
selected as it drives fuel efficiency related to IAG’s most
material source of emissions (Scope 1 emissions from jet
fuel use). In selected operating companies, the carbon
efficiency measure is combined with other KPIs relevant
to operations (e.g. waste reduction initiatives in IAG Cargo)
Please refer to the Remuneration Committee Report for more information.
GOV-4 Statement on due diligence
Please refer to the appendix to the Sustainability statement.
GOV-5 Risk management and internal controls
over sustainability reporting
Sustainable aviation risks and people, culture and employee
relations risks are reported as principal risks to IAG.
These risks are reviewed under the Group ERM risk assessment
process, which is presented biannually to the Audit and
Compliance Committee and annually to the SECR Committee
and Board. More details on risk identification and assessment,
and risk management can be found in the Risk management
and principal risk factors section of this Annual Report.
All principal risks are linked to the Group strategic priorities.
Sustainability risks and opportunities, including climate-related
risks and opportunities, are also identified and assessed by the
Group Sustainability team, in conjunction with the Group ERM
team, and presented to the IAG Chief Financial and
Sustainability Officer, IAG Management Committee and SECR
Committee. Plans to mitigate risks are developed by relevant
risk owners in specific areas of the business, with agreed
initiatives included in relevant operating company business
plans. Where risk treatments require time to implement,
short-term mitigations are assessed and the timeline to risk
mitigation and consequent risk acceptance is discussed and
agreed by stakeholders.
People, culture and employee relations risks are managed
by the Group’s operating companies and supervised by
IAG’s Nominations Committee, Remuneration Committee
and Board through periodic reports.
Impact on operations and strategy
Sustainability risk assessments have informed specific decisions
related to business operations and strategy, and IAG allocates
significant resources to environmental risk management.
Examples include:
• Since 2019, the Group has maintained its commitment to
net zero emissions by 2050, which continues to be delivered
under its Flightpath net zero strategy; and since 2021, IAG
has been working with suppliers to explore ways to reduce
their emissions, as part of delivering IAG’s commitment to
achieve net zero Scope 3 emissions by 2050.
• As of 31 December 2024, IAG’s total expenditure, including
future commitments for SAF offtake exceeded $3.5 billion,
as we continue to scale up the use of SAF in our operations.
This is based on an assumed jet fuel price of $800 per metric
tonne and contracted margins for SAF production.
IAG is committed to mitigating the impacts of hazards that
could potentially have uncertain but potentially negative
outcomes on the environment or people.
IAG adopts precautionary measures to mitigate these hazards,
an approach known as the precautionary principle. For
example, the precautionary principle is applied to the planning
of operations and the development and launch of new services.
IAG integrates and aligns climate considerations into three-year
business plans and one-year financial forecasts.
IAG also manages risks via the use of ISO-14001-aligned
environmental management systems. IEnvA (IATA’s
Environmental Assessment) is the airline industry version of ISO
14001, the international standard for environmental
management systems. IEnvA is tailored specifically for airlines
and is fully compatible with the requirements of the
International Organization for Standardization (ISO).
All Group airlines are certified under the IEnvA standard in 2024.
Vueling renewed its certification in 2024 incorporating the Illegal
Wildlife Trafficking (IWT) certification module, which has been
developed in line with the 11 commitments of the Buckingham
Palace Declaration and the 72nd IATA AGM Resolution
to prevent the transportation of illegal wildlife products.
IAG and its operating companies do not currently take out
any specific insurance to cover environmental risks.
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Strategy
SBM-1 Strategy, business model and value chain
IAG focuses its sustainability strategy on addressing material issues: those that are most important to key stakeholders and that
have the biggest external impacts.
Please refer to the strategic review section of this Annual Report for more information on IAG’s strategy, business model and value chain.
SBM-2 Interests and the views of stakeholders
IAG regularly engages its stakeholders on sustainability issues. External stakeholders include investors, customers (including corporate
customers), policymakers, trade associations, fuel suppliers, airports and NGOs. Internal stakeholders include IAG Board members,
all IAG Management Committee members, and employees (including operating company sustainability representatives). The results
inform ongoing disclosures and strategy.
IAG considered the interests and views of stakeholders in its 2024 double materiality assessment, as follows:
Customers
Affected stakeholders
Why they are important
• We aim to provide unrivalled customer propositions and a portfolio of world-class brands targeting specific demand spaces and
travel occasions.
• Passenger revenues, including fares and ancillaries, are the most important source of revenue for IAG.
• Recognising loyal customers through loyalty programmes by earning rewards on a range of items when flying with our airlines and
partners creates value for both IAG and our customers and builds the relationship.
How we engage with this stakeholder group
• A daily ‘Customer Voice’ survey is sent to customers who have recently flown with us, collecting feedback on their experience.
• Customer feedback through a variety of channels (contact centres, social media, feedback from customer-facing employees and
partners, crews, lounge colleagues and ground handling agents) help us understand key pain points throughout our customers’ journeys.
• Brand surveys are undertaken to understand and meet the needs and expectations of our customers.
• Claims and complaints can be raised through different channels and are monitored to accommodate our customers and enable action
where necessary, and contact centre services and other digital channels (for example, chatbots on our websites or WhatsApp 24/7),
are used so that customers can reach out when needed.
• We communicate information including the latest changes in our services or product enhancements through various channels, including
websites, emails and social media accounts.
• We offer guidance and a high standard of customer care throughout the customer journey from both airport and on-board colleagues.
Approach of the double materiality assessment to this group
The safety, satisfaction and overall experience of IAG customers are directly influenced by the Group's operations. Aviation security
is crucial for protecting passengers and ensuring their trust in our airlines. Customer experience, encompassing service quality and
comfort, shapes their perception and loyalty. Additionally, maintaining high standards of customer health and safety, particularly in
preventing illness and ensuring a secure travel environment, is essential for their wellbeing and confidence in choosing IAG for their
travel needs.
In order to understand how customers may be impacted by IAG's operations, we consulted commercial experts from across our
operating companies and incorporated the insights from customer satisfaction reviews.
Society
Affected stakeholders
Why they are important
• Society influences and is affected by IAG airlines’ practices. Public concerns about environmental impact, such as air and noise
pollution, push airlines to adopt sustainable operations, while societal values around ethical behaviour shape regulatory
landscapes and consumer preferences. The public's perception and acceptance, often referred to as the social licence to operate,
are crucial for IAG's reputation and long-term viability. Additionally, societal pressure can lead to stricter regulations and
standards, impacting IAG's operational and financial performance. Engaging with societal concerns helps IAG anticipate and
adapt to evolving expectations, ensuring sustainable and responsible business practices.
How we engage with this stakeholder group
• IAG engages with society by actively seeking public input through consultations to understand societal concerns. We enhance
transparency by publishing sustainability reports and updates on our environmental and social performance. Moreover, IAG
participates in community initiatives and partnerships to address local needs and supports ethical business practices to align with
societal values. We use feedback mechanisms to respond to public concerns and adapt our practices accordingly, ensuring they
meet societal expectations and contribute positively to the community.
Approach of the double materiality assessment to this group
Insights from internal documentation such as OHI surveys for employees, and customer satisfaction surveys, helped inform key
societal issues for IAG’s double materiality assessment. The IAG Sustainability team also reviewed the work IAG and its operating
companies support through corporate community contributions and its partnerships with charitable organisations.
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Employees
Affected stakeholders
Why they are important
• Our colleagues are integral to the delivery of our service, business transformation and strategic priorities.
• The Group’s key values enable us to fulfil our purpose. In addition to this, each operating company and platform business has
its own corporate culture and values that support its unique brand, business, customer and employee propositions. The focus
is on building and embedding the culture needed to be competitive, achieve our transformation agenda and provide a work
environment in which colleagues can thrive.
• We continue to advance our work to address inequality of opportunity and under-represented to create a diverse and inclusive
culture representative of the communities we live and work in and the customers we serve. We remain committed to our Group-
wide ambition of 40% of senior leadership roles held by women by 2025 and introduced an ambition that by 2027 10% of our UK
senior leaders will be ethnically diverse.
How we engage with this stakeholder group
• Our operating companies and platform businesses use a variety of formal and informal channels for two-way communication,
adapted to their company culture and employees’ work environment. These channels include online employee forums, internal
social networks, local cascade meetings, newsletters, workshops, engagement surveys and social media.
• A Group-wide OHI survey is conducted in each of the operating companies and platform businesses every six months, in addition
to company-specific engagement surveys.
• Employee-led network groups and communities provide valuable channels for colleagues’ concerns and for collecting feedback
on plans and initiatives. Local employee representatives and unions also provide formal channels for collective agreements as
well as informal channels for raising issues and concerns.
• IAG’s European Works Council (EWC) facilitates communication between employees and management on transnational European
matters. It includes representatives from the different European Economic Area (EEA) countries, meeting regularly throughout the year.
• Designated IAG Board members conduct workforce engagement visits with colleagues across our operating companies, meeting
a variety of employees and leaders in their work context to understand first-hand the challenges and opportunities of the
different businesses, employee issues and levels of engagement.
• Ongoing engagement with union groups in CBA negotiations.
Approach of the double materiality assessment to this group
Employee attraction, retention and engagement is important for IAG to ensure a motivated and stable workforce, critical for
operational efficiency. Remuneration and working conditions are assessed to maintain fair compensation and a safe working
environment, influencing both employee satisfaction and regulatory compliance. Equity, Diversity and Inclusion (EDI) is reviewed
to foster a diverse workplace, enhancing innovation and reflecting societal values. Employees are provided with various formal and
informal methods to express their views, ideas and concerns with management. Finally, corporate governance is analysed to ensure
transparent and accountable decision-making, which is crucial for trust and sustainability in the long term. In order to understand
how employees may be impacted by IAG's operations, we consulted experts in the matter from the different operating companies
and incorporated insights from OHI.
Suppliers
Affected stakeholders and report users
Why they are important
• Suppliers are fundamental to ensuring we meet the high standards expected by customers and other key stakeholders to avoid
potential impacts on operational and financial performance, customer disruption and reputational damage.
• A reliable supply chain supports the delivery of our services to customers and IAG’s sustainability agenda.
• Suppliers are required to adhere to the IAG Third Party Code of Conduct, which links to our commitment to sustainable growth.
• Collaboration brings strong reciprocal benefits, supporting long-term working relationships, based on clear and proactive
contract management, shared goals and mutual brand association.
How we engage with this stakeholder group
• IAG engages with its suppliers to build relationships as well as monitor and manage supplier and contract performance.
• Through the Hangar 51 accelerator programme we have identified start-up suppliers aligned to our sustainability strategy and
our desire to lead in innovation.
• IAG has assessed the sustainability performance of suppliers through our EcoVadis partnership. The results are helping drive
change in the supply chain, with targeted remedial plans for identified areas of improvement.
• IAG’s work with Watershed enables closer engagement with our suppliers through our Scope 3 carbon accounting programme.
• IAG GBS became members of SEDEX to support our assessment of labour, health and safety, business ethics and environment
risks across our supply chain. Its methodology complies with EU legislation and supports UK Modern Slavery Act compliance.
This enables IAG to increase the number of audits carried out annually to identify and address issues in our supply chain.
• IAG attends a range of industry conferences across all supply categories to collaborate with suppliers.
• IAG engages with aircraft and engine manufacturers to manage technical and operational issues through regular contact and
scheduled meetings.
• Engagement on lease renewals, returns and the in-service fleet are largely managed by the Fleet teams in the operating airlines.
• IAG’s Fleet and Sustainability teams communicate with major manufacturers to understand and influence activities to support
delivery of our environmental targets.
Approach of the double materiality assessment to this group
In order to understand how suppliers may be impacted by IAG's operations, we consulted with procurement experts from our
operating companies and incorporated insights from EcoVadis scorecards.
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Shareholders, lenders and other financial stakeholders
Report users
Why they are important
• As the main providers of capital, this stakeholder group enables IAG to invest in and grow the Group’s businesses. Investors,
particularly long-term shareholders, share the risk of the business.
• Strategy and business plan delivery requires:
• external funding for the substantial amount of capital expenditure required to replace or grow our fleet; and
• efficient external capital to fund our operations and invest in our asset base in a cost-effective manner.
• Shareholder views are critical in supporting strategy formulation, which drives operational and financial performance to generate
and optimise sustainable returns.
• Availability and access to external capital on competitive terms influences the financial strength and positioning of the Group
and its operating companies.
How we engage with this stakeholder group
• The Investor Relations (IR) team maintains ongoing dialogue with equity, credit and ESG research analysts to understand
investors’ views of the Group.
• IAG holds an Annual General Meeting and four quarterly results briefings where shareholders, investors and equity and credit
analysts interact with the Board and senior management.
• IAG and Group airlines deliver Capital Markets Day (CMD) where Board members, the Management Committee and other senior
management from across the Group engage with investors and analysts. British Airways held a CMD in 2024.
• A mailbox is provided for institutional and individual shareholders to put questions to IAG on its strategy and progress.
• IAG management attend investor conferences hosted by major financial institutions and the IR team organises and attends
roadshows globally.
• Group Treasury engages with credit analysts, global banks, debt investors and credit rating agencies.
• The Chairman and Remuneration Committee Chair meet investors in one-to-one meetings.
Approach of the double materiality assessment to this group
ESG ratings and feedback received from this stakeholder group at investor conference events and through our mailbox have been
used to identify impacts, risks, and opportunities (IROs) in our double materiality assessment. Shareholders, leaders and other
financial stakeholder, are classified as report users in the double materiality assessment, by incorporating IROs that keep them
updated and informed.
Environment
Affected stakeholders (silent stakeholder)
Why they are important
• IAG’s direct operations contribute to air pollution and carbon emissions. Addressing these impacts is vital for our compliance
with regulations, reducing our carbon footprint and mitigating climate change effects.
• Environmental sustainability is also increasingly important to our consumers and investors, influencing IAG's market position
and financial performance. By prioritising environmental considerations, IAG can not only reduce ecological harm but also
enhance its reputation, align with global sustainability goals and ensure long-term operational viability.
How we engage with this stakeholder group
• According to the CSRD, the environment is considered a silent stakeholder. IAG draws on data from scientific sources to better
understand the impacts; we also consult with specialists at each of our operating companies to appropriately assess all impacts,
risks and opportunities.
• In climate change and emissions management, IAG’s focus is to:
• Maximise fuel efficiency and the use of renewable energy sources to reduce our dependency on fossil fuels and lower
operating costs;
• Minimise greenhouse gas emissions and meet regulatory standards, crucial for mitigating climate impact;
• Deliver waste management and circular economy approaches to reduce waste, increase recycling, and incorporate circular
economy principles, thereby decreasing environmental impact and operational costs; and
• Consider biodiversity and ecosystems considerations including the impact on wildlife and natural habitats and implement
initiatives to preserve biodiversity and maintain a positive environmental reputation.
Approach of the double materiality assessment to this group
In order to understand how the environment may be impacted by IAG's operations, the IAG Sustainability team consulted with
sustainability experts across the Group’s operating companies. The team also incorporated insights from the TCFD assessment,
ERM risk assessment, IAG Climate Disclosure Project submission, 2023 Annual Report and Accounts, IATA IEnvA submissions,
and operating company sustainability reports (where applicable). Working with Transcendent, our identification of environmental
impacts followed a review of external academic literature (which investigated the impacts of aviation operators on the
environment) and a peer review of other aviation company sustainability reports.
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Public administration (government and regulators)
Affected stakeholders and report users
Why they are important
• Government policies and decisions impact many aspects of IAG’s business across a wide range of areas including transport, consumer
rights, practical operational issues, commercial practices and the environment. We must comply with relevant regulations, but seek to
engage responsibly to influence policy developments to benefit our customers and achieve our business goals.
• Engagement with policymakers is essential to understand their plans and encourage proportionate outcomes to achieve our
vision to be a world-leading airline group on sustainability and ensure we collectively meet our global climate goals.
• Our airlines are subject to regulation by civil aviation regulators in the countries of registration and those of destinations we operate
to, requiring frequent engagement on safety, security, consumer rights and a variety of other policy and administrative issues.
• Regular engagement around the world is needed to manage market access issues under international air services agreements
and secure the necessary operating permits.
How we engage with this stakeholder group
• The IAG Government Affairs team undertakes direct engagement with stakeholders in all the countries in which our airlines
are based as well as with EU institutions in Brussels. It coordinates the efforts of the Government Affairs teams of individual
operating companies to ensure consistent and coordinated approaches.
• We engage directly with policy, market and regulatory stakeholders on questions of interest to convey IAG positions and
contribute technical expertise to discussions. This has included arranging visits to our airlines’ bases to enhance understanding
of operations and the impacts of policy proposals.
• We also engage through various international, regional and local trade associations and general business organisations.
• This engagement involves senior executives including the Group Chief Executive, Management Committee members and senior
executives from airline operating companies where appropriate, mainly in the EU, the UK, Spain and Ireland.
• IAG aims to provide a factual basis in support of its policy positions and in 2023 commissioned an extensive study on the Group’s
economic impacts from PwC and additional research on the benefits of SAF.
• In the field of international air services, IAG representatives join diplomatic talks wherever possible, including those of the EU-US
Joint Committee on aviation and ICAO’s Air Services Negotiation Event (ICAN) in Saudi Arabia in December, to support
operating companies’ access to market.
Approach of the double materiality assessment to this group
The IAG Legal and Compliance team oversees the policies and the IAG code of conduct to ensure colleagues adhere to laws and
ethical standards, which is crucial for maintaining industry integrity and protecting consumers. Modern slavery and human
trafficking is a significant concern, as regulators enforce strict measures to ensure that airlines' operations and supply chains are
free from such abuses, protecting human rights and upholding legal obligations. Finally, political engagement is evaluated to ensure
transparency and accountability in each airline's interactions with government bodies, preventing undue influence and promoting
fair policymaking.
In order to understand how public administration may be impacted by Group's operations, the IAG Sustainability team incorporated
insights from IAG's 2023 Non-Financial Information Statement, in consultation with legal experts in IAG.
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SBM-3 Material impacts, risks and opportunities and interaction with strategy and business modeI
IRO-1 Description of the process to identify and assess material impacts, risks and opportunities and to assess which
ones are material; IRO-2 – Disclosure Requirements in ESRS covered by the undertaking’s sustainability statement
IAG performed a double materiality assessment in 2024, working with sustainability expert firm Transcendent, to determine the
most prioritised topics for the Group from an impact and financial perspective, as required by the CSRD. The double materiality
assessment was conducted with reference to European Sustainability Reporting Standard (ESRS) requirements and builds on the
previous materiality assessment conducted by IAG in 2021.
Under the ESRS, materiality is determined through the identification and assessment of impacts, risks and opportunities (IROs),
grouped at ‘topic’ level. The results from this exercise frame the reporting obligations within each of the ESRS chapters in this
Sustainability statement.
What is a double materiality
assessment?
CSRD uses the concept of double
materiality:
Financial materiality
How sustainability matters affect
company performance and prospects.
Impact materiality
The impacts of the activities
of the undertaking on people
and the environment.
Customers
Employees
Suppliers
Shareholders, lenders and other
financial stakeholders
Environment
Public administration
(Governments and regulators)
Society
Financial materiality
Identification and assessment of risks
and opportunities that may cause
significant financial impacts on the
company and its operations, such as
cash flows, access to financing, or cost
of capital in the short, medium or
long term.
Impact materiality
Identification of impacts of the business
on people or the environment.
This includes impacts related to the
Group’s own processes, those of its
value chain (upstream and downstream),
its products and services and its
commercial relations.
.
Methodologies and assumptions
Scope and consolidation
The double materiality assessment considered the vision
of all IAG’s operating companies. It identified IROs relevant
to specific business activities at its hub locations and in its
operations around the world. It also considered the goods
and services provided by IAG’s value chain.
IAG considers risks to the strategic business plan over the short
term (up to three years), medium term (from three to five years)
and in the longer term (beyond five years). Timescales considered
by this assessment are consistent with those used under the ERM
risk assessment, assessing the potential impact of principal risks
over the next three years against our business plan.
The IAG Sustainability team appointed a third party sustainability
consultant (Transcendent) to support the identification,
categorisation and consultation processes involved in the
double materiality assessment. Transcendent provided an
independent review of the Group’s sustainability reports
and led a targeted consultation exercise with relevant expert
stakeholders across IAG and its operating companies
to assess the materiality of each IRO.
To consolidate the findings of the double materiality assessment
at Group level, the IAG Sustainability team designed and
adopted a weighted scoring system, related to the share of
the Group’s revenue by business line, to represent the influence
of its airlines and non-airline businesses in its analysis.
Representatives from all operating companies participated
in this assessment, including colleagues from Sustainability,
People, Government Affairs, Finance, ERM, Customer and Legal.
Details of how IAG has engaged stakeholders such as customers
and employees in the completion of its double materiality
assessment are provided in the process description below
and the Strategy section of this Sustainability statement.
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Financial materiality
Impact materiality
Material issues
Impact on Group
performance/prospects
Company
Group's impact on
stakeholders and society
CSRD
Process
IAG’s double materiality assessment followed a four-stage process:
Identification of sustainability topics
IAG commissioned Transcendent to review the Group’s
sustainability information and information disclosed by
other aviation stakeholders to identify relevant
sustainability topics for the business. Information sources
included IAG’s 2023 NFIS, operating company
sustainability reports, third-party ESG rating information
and OHI and employee engagement survey results.
Transcendent prepared a comparative analysis of material
topics reported by IAG and 21 competitors to validate the
topics identified. Transcendent also considered third-party
standards with which IAG and its operating companies
comply (e.g. IATA’s Environmental Assessment (IEnvA)).
The IAG Sustainability team reviewed the findings and 23
sustainability topics were defined and aligned with the CSRD
topics. This list was presented to the Safety, Environment
and Corporate Responsibility Board committee.
Identification of impacts, risks and
opportunities (IROs)
Specific IROs were identified using a bottom-up
approach, drawing on input from workshops held
with subject matter experts within IAG and its
operating companies.
A comprehensive review identified 164 preliminary
IROs, comprising 82 impacts, 58 risks and 24
opportunities. These were grouped into 21 different
sustainability topics across the ten topical ESG
standards as defined by the ESRS.
Assessment of IROs
Impact materiality
Transcendent led a consultation exercise by issuing a
questionnaire to more than 60 subject matter experts across
IAG and its operating companies, including representatives
from the Sustainability, People, Government Affairs, Finance,
ERM, Customer and Legal teams.
IAG utilised a points-based scoring system that aligned
to its ERM risk assessment. Each impact was given specific
criteria to inform the severity analysis, and the probability
of occurrence was scored as a percentage likelihood.
Impacts scored against CSRD evaluation criteria, based
on the assessment of the scale (the severity of the current
or future impact), scope (number of individuals or perimeter
affected), irremediability (limit in the capacity to restore
the affected situation), and probability of occurrence of
each impact. The impact materiality scores were calculated
as an average, with topics being represented by their
highest impact score.
Financial materiality
This assessment was performed top-down by
the IAG Finance, ERM and Sustainability teams.
Risks and opportunities were scored according to
the CSRD evaluation criteria for financial materiality.
The financial materiality score comprised the
magnitude of financial impact (through changes
to revenue, capital expenditure or operating
expenditure) and the probability of occurrence,
using the scoring system provided for the impact
materiality assessment, which aligned to IAG’s ERM
risk assessment.
The risk and opportunity materiality scores were
calculated as an average, with topics being
represented by their highest impact score.
For IROs not currently covered by IAG’s ERM risk
assessment, and opportunities (which require a
quantification of the benefit of action), a subjective
assessment was made using available financial
information.
Determination and communication of material
topics
A central group of IAG experts representing the IAG
Finance, Risk and Sustainability teams, including the Chief
Financial and Sustainability Officer, evaluated the results
of the double materiality assessment. This group selected
‘critical’ as the applicable threshold for material issues
under this assessment as it aligns to IAG’s classification
of ‘critical’ in IAG’s ERM risk assessment definitions.
This meant any IROs, and their relevant CSRD topic which
scored as ‘critical’ based on impact materiality, financial
materiality or both, would be reported in this statement.
The final results of the double materiality assessment,
including the threshold set, was approved by the IAG
Sustainability, Environment and Corporate Responsibility
Committee and Audit and Compliance Committee in
November 2024. IAG met with its European Works Council
on 27 November 2024 to present how this double
materiality assessment was conducted and the material
topics identified.
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Results of the double materiality assessment
Five of the ten topical ESG standards as defined by the ESRS have been identified as material by IAG. These topical standards form
the basis for the disclosure requirements provided in this Sustainability statement.
E1. Environment
S1. Own workforce
S2. Workers
in the value chain
S4. Consumers
and end users
G1. Business conduct
• Climate change and
emissions
management
• Equity, diversity and inclusion
• Remuneration and working
conditions
• Employee attraction, retention
and engagement
• Employee health and safety
• Responsible supply
chain
• Customer
experience
• Corporate governance
• Ethical business and
regulatory compliance
• Modern slavery and
human trafficking
Material sustainability-related impacts, risks and opportunities
The material sustainability-related impacts, risks and opportunities identified by IAG include:
Topic
Name
Impact, risk or
opportunity
Location in
the value chain
Environmental
Climate change and
emissions management
Emissions of CO2 (Scope 1 and 2) from air operations
Own operations
Emissions reduction through the use of SAF
Own operations
and upstream
Emissions reduction through fleet renewal
Own operations
Emissions offset through participation in market-based measures
Own operations
and upstream
Social internal
Employee attraction,
retention and
engagement
Employee engagement and advocacy
Own operations
Organisational culture and sense of belonging
Own operations
Equity, diversity
and inclusion (EDI)
Inclusive culture
Own operations
Diverse workforce
Own operations
Equal opportunities and equity for all
Own operations
Employee health
and safety
Employee health and safety
Own operations
Remuneration and
working conditions
Social dialogue and collective bargaining
Own operations
Fair, sustainable and competitive terms and conditions
Own operations
Social external
Customer experience
Connecting people, businesses and countries
Downstream
Enhanced customer experience through investment in new products
Downstream
Enhanced customer experience through loyalty programmes
Downstream
Informed customer decisions
Downstream
Business conduct
Ethical business and
regulatory compliance
Protection of whistleblowers
Own operations
and upstream
Modern slavery and
human trafficking
Modern slavery and human trafficking
Own operations
and upstream
Responsible supply
chain
Assurance of ethical practices of suppliers
Upstream
Unfavourable working conditions in the supply chain
Upstream
Disparities in treatment and opportunities among supplier workers
Upstream
Violation of human rights standards within supply chains
Upstream
Corporate governance
Sustainability embedded into overall business strategy
Own operations
Provision of internal sustainability governance bodies
Own operations
Financial management incentives linked to carbon efficiency
Own operations
Positive impact
Negative impact
Opportunity !
Risk
Using this double materiality assessment and future review
IAG intends to review the findings of this double materiality assessment annually in line with CSRD reporting requirements.
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Environment (Planet)
EU Taxonomy Regulation
Please refer to the appendix to this Sustainability statement for disclosures under Regulation EU 2020/852 (the ‘EU Taxonomy Regulation’).
ESRS E1 Climate change
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
Topic
Name
Impact, risk or
opportunity
Description
Location
Environmental
Climate change
and emissions
management
Emissions of CO2 (Scope 1 and
2) from air operations
The release of CO2 from combustion of fossil fuels and SAF from normal
operation of aircraft engines generated during taxi, take-off, cruise and landing as
well as operation of the auxiliary power unit (APU) in-flight contributes to the
increase of greenhouse emissions globally, which contribute to global warming
and represents a negative impact on the environment.
Own operations
Emissions reduction through the
use of SAF
SAF, derived from renewable sources such as biomass, waste oils or synthetic
processes, offers a more sustainable alternative to conventional fossil-based jet
fuels. By integrating SAF into its fuel supply chain, IAG has an opportunity to
reduce its reliance on fossil fuels and lower its carbon footprint.
Own operations
and upstream
Emissions reduction through
fleet renewal
By replacing older, less fuel-efficient aircraft with newer models, IAG has the
opportunity to reduce its carbon emissions as these newer aircraft typically
feature advanced technologies and aerodynamic designs that result in improved
fuel efficiency.
Own operations
Emissions offset through the
participation in market-based
measures
Participation of group airlines in market-based measures such as the EU
Emissions Trading System, UK Emissions Trading Scheme (ETS) and the CORSIA
has resulted in a contribution of financial funds to support carbon reduction
measures. Carbon market compliance obligations apply to upstream fuel
production as well as Group airlines.
Own operations
and upstream
Positive impact
Negative impact
Strategy
E1-1 – Transition plan for climate change mitigation
IAG is targeting net zero emissions by 2050 across its Scope 1,
2 and 3 emissions. ‘Net zero’ means any residual emissions from
IAG operations in 2050, or by the manufacture and transport
of goods supplied to the Group, will be mitigated by an
equivalent amount of CO2 removed from the atmosphere
via carbon removals.
IAG’s net zero by 2050 target has been independently assessed
by the Transition Pathway Initiative (TPI) as 1.5°C-aligned,
and our medium-term target (to achieve a 20% reduction
in Scope 1 emissions) has been assessed as well-below-2°C-
aligned. The TPI assessment compared the milestones in
the 2021 IAG roadmap with an industry-wide pathway modelled
by the International Energy Agency (IEA), taking removals
commitments into account.
IAG is working to deliver its annual 2025, 2030 and 2050 climate
targets by carrying out emission-reduction initiatives, working
in collaboration with key stakeholders and proactively requiring
supportive government policy and technology development.
Key measures and assumptions modelled to reduce emissions
include fleet modernisation, the use of SAF, market-based
measures including the UK and EU ETS and CORSIA, and
carbon removals.
Roadmap to net zero
IAG has published updates to its roadmap to achieve its goal
of net zero emissions by 2050 every year since 2019. IAG’s
2019 baseline represents the year of ‘peak’ emissions by the
Group and before activity levels were impacted by the
COVID-19 pandemic.
Under IAG’s sustainability leadership KPIs, IAG’s roadmap to
net zero and its associated costs are included in one-year and
three-year business planning for all operating companies and
to 2030 within updates to sustainability risks as reviewed under
the Group-wide ERM process. The roadmap also forms a key
part of IAG’s environmental sustainability commitments, as
detailed in the environmental sustainability policy which was
approved by the IAG Board of Directors in 2022. Progress
towards delivering emission reductions in this roadmap
are monitored through IAG’s Sustainability Network (ISN)
governance. Quarterly KPIs on our carbon reduction progress
are shared with the SECR Committee. The Group
Environmental Sustainability Policy and Flightpath net zero
strategy are available on the IAG website.
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275
E
Scope 1 emissions carbon reduction roadmap
The Scope 1 emissions roadmap below is the latest core Group scenario which assumes continued policy support for carbon
reductions, an overall recovery to 2019 levels of passenger demand by 2024, and annual demand growth aligned with the long-term
growth forecasts disclosed in notes 4 and 17 to the financial statements. Updates to our roadmap in 2024 focus on increasing the
use of SAF in our operations in the short term and reflecting our investment in carbon removals before 2030. Beyond 2030, the
roadmap maintains an assumption that a 5% emissions saving from airspace modernisation will be achieved by 2050. The emissions
modelled under our demand growth scenario reflect the typical timescales for the operation of aircraft and the associated ‘locked-in’
emissions attributed to flying activity with these assets (which are approximately 20+ years). This is connected to our assumptions
on fleet renewal, and the introduction of zero-emission aircraft which we expect will enter the fleet from 2040, based on current
assumptions made by aircraft manufacturers.
IAG Scope 1 emissions roadmap to net zero
million tonnes CO2 (MT)
Carbon reduction levers in IAG’s transition plan include:
E1-3 Targets related to climate change mitigation and adaptation
Carbon reduction lever
in transition plan
Significant operational expenditures or capital
expenditures required for implementation of plan
Venture investments/key innovation
partners
Expected
contribution to
Scope 1 Gross
emissions
reductions in 2030
Expected
contribution to
Scope 1 Gross
emissions
reductions in 2050
New aircraft and
own operations
IAG is investing around €12.6 billion
between 2025 and 2029 for 171 new
efficient aircraft. Please refer to
note 15 to the financial statement
for more information
ZeroAvia (hydrogen aircraft
manufacturer)
I6 (fuel management software)
NAVflight services
(flight planning services)
17 %
41 %
SAF
As of 31 December 2024, our total
purchase for SAF offtake agreements
is more than $3.5 billion, based on
assumed energy prices and contracted
margins for SAF production
SAF producers including:
LanzaJet
Twelve
Infinium
9 %
40 %
Carbon removals
In 2024, British Airways signed a deal to
purchase 33,000 carbon removal credits
under a partnership with CUR8, Standard
Chartered and UNDO, as part of a
broader £9 million purchase of carbon
removals credits in the UK and overseas
Heirloom (carbon capture start-up)
CUR8 (carbon removal platform)
5 %
19 %
Market-based
measures and
carbon offsetting
Continued advocacy to strengthen
CORSIA to limit net emissions from
aviation and purchase of carbon
allowances and offset credits to
meet our obligations
CHOOOSE (customer
offsetting platform)
13 %
– %
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27
8.4
31
27.2
24.1
New aircraft and operational efficiency
Sustainable Aviation Fuels
Removals
ETS/CORSIA
Net emissions
Gross emissions
Demand growth
IAG net zero target
2024 gross emissions
2024 net emissions
2019
2025
2030
2035
2040
2045
2050
19%
40%
41%
Percentage CO2 reductions
(SAF is 70% of fuel in 2050)
Scope 3 emissions carbon reduction roadmap
IAG expanded its commitment to deliver net zero emissions by 2050 to include Scope 3 emissions from its supply chain in 2021,
which represent approximately 30% of IAG’s total emissions footprint. IAG recognises that the majority of these emissions are
attributed to upstream fuel production (Scope 3.3) and purchased goods and services (Scope 3.1) associated with aircraft
maintenance and servicing.
IAG’s Scope 3 roadmap below is created using demand growth assumptions aligned to IAG’s scope 1 emissions. Our view of carbon
reductions in our supply chain is formed from a literary review of the decarbonisation plans of suppliers, focusing on the emission
categories that represent the majority of Scope 3 emissions (listed above). Reductions in Scope 3.3 emissions are aligned to IAG’s
SAF expectations, and correspond to a decreasing volume of emissions associated with the production of fossil fuel jet kerosene.
We expect to use carbon removals towards mitigating the residual emissions from these operations, in line with the volumes IAG
expects to use towards mitigating residual emissions from direct operations (Scope 1).
IAG Scope 3 emissions roadmap to net zero
million tonnes CO2 (MT)
Carbon reduction levers in IAG’s transition plan include:
E1-3 Targets related to climate change mitigation and adaptation
Carbon reduction lever
in transition plan
Significant operational expenditures or capital
expenditures required for implementation of plan
Venture investments/key innovation
partners
Expected
contribution to
Scope 3 Gross
emissions
reductions in 2030
Expected
contribution to
Scope 3 Gross
emissions
reductions in 2050
Carbon reductions
in our supply
chain
• 79% of suppliers by spend have submitted
scorecards on ESG performance
• Supplier contract clause on sustainability
• Developing a comprehensive Scope 3
emissions measurement tool in partnership
with Watershed, to prioritise carbon
reduction efforts across the value chain
• Purchase agreements for the use of SAF
(please refer to the Scope 1 emissions
roadmap) will reduce LCA emissions
associated with fuel production (as it
leads to a corresponding reduction of
production of fossil fuel jet kerosene)
EcoVadis (business
sustainability ratings)
Watershed (emissions
reporting platform)
34 %
84 %
Carbon removals
Please refer to the Scope 1 emissions roadmap
Heirloom (carbon capture
start-up)
CUR8 (carbon removal
platform)
5 %
16 %
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11
2.8
12.0
Carbon reductions in our supply chain
Carbon removals
Net emissions
Demand growth
Gross emissions
2024 emissions
2019
2025
2030
2035
2040
2045
2050
Impact Risk and Opportunity Management
Task Force on Climate-related Financial Disclosures (TCFD)
TCFD summary
IAG was an early adopter of the Task Force on Climate-related Financial Disclosures (TCFD) guidance and first carried out TCFD-
aligned scenario analysis in 2018, ahead of the UK requirement – Listing Rule 9.8 – which defines the information to be included
in a company’s annual report and accounts.
Descriptions of TCFD recommendations are on the TCFD website. IAG has applied the TCFD ‘Guidance for All Sectors’ to the
disclosures in this report. An internal review of compliance with the 11 core TCFD recommendations identified no material gaps
or changes from last year.
Governance
Strategy
Risk management
Metrics and targets
Disclose the organisation’s
governance around climate-
related risks and
opportunities
Disclose the actual and
potential impacts of climate-
related risks and
opportunities on the
organisation’s businesses,
strategy and financial
planning where such
information is material
Disclose how the
organisation identifies,
assesses and manages
climate-related risks
Disclose the metrics and
targets used to assess and
manage relevant
climate-related risks and
opportunities where such
information is material
Current activities
Board oversight via SECR
Committee and Audit and
Compliance Committee;
robust governance; double
materiality assessment
completed in 2024
Delivering the Flightpath
net zero strategy and nine
leadership KPIs;
sustainability-linked loans
for British Airways and Iberia;
TCFD-aligned scenario
analysis; one- and three-year
financial and business plans
that integrate sustainability
aspects; new sustainability
contract clause for suppliers
Sustainable aviation risks are
treated as a principal risk and
regularly reviewed within
enterprise risk management
(ERM) processes. IAG uses
quantitative modelling
to support its assessments
Clear metrics and targets
for 2025, 2030 and 2050;
climate-related remuneration
for senior executives and
managers
Planned future activities
Process and control
changes to achieve
reasonable assurance
Increasing SAF procurement;
ongoing scenario analysis;
reviewing guidance and
evidence on pathways
to support 1.5°C transition
More detailed work on risk
impacts to 2030 and 2040;
actions to maximise climate
resilience; risk mitigation KPIs
Deliver against existing
targets; review 2030 targets
in line with latest evidence
on 1.5°C-aligned transition
2024 TCFD-aligned scenario analysis
In 2024, IAG repeated a TCFD-aligned scenario analysis
exercise, building on previous years’ exercises. Key steps taken
in this assessment include:
• the IAG Sustainability team and the ERM team reviewed all
climate-related risks and opportunities and potential impacts
to 2027 and 2030. The impacts of principal and other key
risks are quantified as part of the Company-wide ERM
process that receives Board oversight;
• operating airlines modelled compliance-related costs,
including from the UK and EU ETS and CORSIA, to 2050;
• TCFD-aligned scenario analysis was repeated using a dual
timeframe of 2030 and 2050;
• ongoing analysis was carried out on the Flightpath net zero
strategy to 2050;
• in 2024 IAG included a 5°C temperature warming
Representative Concentration Pathway (RCP) scenario,
to understand the potential range of outcomes of future
weather events; and
• alignment between the double materiality assessment and
TCFD review findings.
This scenario work informs strategy, planning, risk management
and financial management.
IAG takes a proactive approach to managing environment-
related risks and opportunities and is committed to
managing their regulatory, reputational, financial, market
and technology aspects.
Our TCFD assessment in 2024 was a structured, qualitative
discussion of potential climate-related impacts and business
responses, using the latest evidence and analysis from
reputable sources like the UN, EUROCONTROL and Climate
Action Tracker (CAT). The 2024 analysis was conducted in line
with the latest TCFD guidance update published in 2021. We
aligned this TCFD assessment with findings from the double
materiality assessment used to determine the scope of this
Sustainability statement.
Temperature scenarios of 1.5°C1 were chosen for transitional
risks, in recognition of IAG and global targets. The 2°C and 3°C
warming scenarios were chosen for physical risks, based on the
latest UN projections. A new 5°C extreme warming scenario has
been included in this year’s assessment to help us understand
our capability to adapt to a world where our operations would
change significantly due to very high temperatures.
The year 2030 was chosen as the key timeframe, based on
IAG targets and key policy timelines such as SAF mandates.
This also aligns to IAG’s ERM 2030 sustainability risk
assessment. The year 2040 was also considered due to the
possibility of the world overshooting 1.5°C in the 2030s leading
to faster societal changes.
The TCFD exercise involved representatives from IAG’s
Sustainability Network (ISN) which includes colleagues from
Strategy, Treasury, Flight Operations, Finance, Government
Affairs, Commercial Planning, Investor Relations, People,
Enterprise Risk Management, IAG GBS and IAG Loyalty, as well
as sustainability representatives from all operating airlines.
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1
‘Orderly’ and ‘disorderly’ scenarios were chosen as per TCFD definitions. These scenarios compare smooth, predictable and idealised climate-related
changes with abrupt, variable and disjointed changes across regions.
The Group Sustainability team collated inputs, which were
reviewed by the IAG Sustainability Steering Group and the
Safety, Environment and Corporate Responsibility
(SECR) Committee.
The Group remains resilient to the most material climate-related
impacts – industry-wide policy shifts – and these have been
quantified and mitigation plans embedded into financial and
strategic planning. Industry-wide changes also create opportunities
for the Group to become more resilient than its competitors.
To address significant uncertainty around future policy,
technology and market trends, IAG is repeating this scenario
analysis annually. We will keep implementing action plans in
coming years to further improve resilience to wider changes.
Risks and opportunities
Climate-related risks are assessed and managed within the ERM
framework as described in the Risk management and principal
risk factors section of this Annual Report, under the principal
risk ‘sustainable aviation’. In addition to this, IROs identified
under the double materiality assessment carried out by IAG in
2024 considered the risks previously assessed under the TCFD,
which continues to analyse the broad range of potential
climate-related physical, market, policy and technological
risks that could impact our operations. No risks were identified
as financially material for IAG under IAG’s double materiality.
Transitional risks primarily affect airline activity between
European destinations, which calculated based on flights covered
by the EU ETS, UK ETS and Swiss ETS, represented around 26%
of IAG’s Scope 1 emissions in 2024. Physical risks could affect IAG
operations across its global network, reflecting the global nature
of climate change.
IAG considers the relevant risk factors that could impact each
risk by region and timescale. Such variability may arise from
fragmented policy definition, scope and implementation,
changeable market perceptions, or unpredictable delivery
of new technology (among other causes). IAG considers
its mitigation strategy for each risk accordingly. Please refer
to the ‘TCFD risk impacts and mitigation opportunities’ table
for more information.
The carbon-reduction targets in the Flightpath net zero
strategy are the key measures for assessing the mitigation of
or resilience to these risks, along with consideration of these
risks in relevant governance processes. The external risk
environment, materiality of risks, mitigation actions and KPIs
for these mitigating actions are reviewed regularly.
The table below lists risks assessed through the ERM and
the double materiality assessment. The most material risks
are policy risks. Risk timeframes align with corporate
planning timelines.
Climate-related opportunities refer to the potential positive
effects derived from the deployment of efforts to mitigate
and adapt to the effects of climate change, such as through
resource and cost efficiency, the adoption and utilisation of
low-emission technologies, the development of new products
and services, and reinforcing resilience along the supply chain.
Opportunities are identified as potential actions to be taken
at Group level to reduce our exposure to climate-related risks.
The opportunities presented below align to those identified
in IAG’s double materiality assessment, being managed within
the operating companies per an ERM framework point of view.
TCFD risk assessment
TCFD risk type
Risk description
Timeframe
Trend1
Scenario
dependency2
Physical
Resilience to acute weather events
M
Up
Temperature
Resilience of routes and assets to chronic climate changes
L
Stable
Temperature
Market
Customer spend due to perceptions of ESG progress in IAG
or the aviation sector
S
Down
Transition
Perceived quality of offset and removal projects
M
Up
Transition
Activism and direct action protests for climate inaction
S
Stable
Transition
Supply chain readiness
L
Stable
Transition
SAF delivery against committed offtake agreement volumes
M
Up
Transition
Policy
Litigation against claimed carbon reductions from offsetting
S
Up
Transition
Demand impact of EU and UK climate policy
L
Stable
Transition
Resilience to changes in ETS/CORSIA pricing
M
Up
Transition
Policy asymmetry across regions
M
Up
Transition
Extra regulation on activity rather than emissions
L
Stable
Transition
Lack of supporting SAF infrastructure or policy
M
Down
Transition
Regulation on non-CO2 effects
M
Up
Transition
Technology
Access to and readiness for lower-emission technologies
L
Stable
Transition
Access to SAF supply
M
Down
Transition
TCFD opportunity assessment
The opportunities listed below are derived from IAG’s double materiality assessment.
TCFD
opportunity type
Opportunity description
Timeframe
Trend1
Scenario
dependency2
Market
Strategic investment in SAF
S
Stable
Transition
Incorporation of new and more efficient fleet
S
Stable
Transition
Technology
Investment in lower-emission technologies
S
Up
Transition
Strategic venture capital investment and start-up engagement programmes
M
Stable
Transition
Investing in product innovation and sustainable material transition
M
Stable
Transition
Key: short term (S) is 1-3 years, medium term (M) is up to 5 years, long term (L) is more than 5 years.
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TCFD scenario analysis
IAG continues to analyse risk and transition scenarios to inform mitigation plans to 2030. Key parameters for defining scenarios are
below, based on UN, Climate Action Tracker (CAT), the UK Climate Change Committee and internal analysis. These are kept under
review.
Physical risk parameters
Current projection
2°C scenario
3°C scenario
5°C scenario
Global scenario to 2100
2.4°C
RCP3 2.6
RCP 4.5
RCP 8.5
Administering authority
Transition risk parameters – 2030
Current policies/projections
Current targets
1.5°C-aligned scenario
UN Intergovernmental Panel on
Climate Change (IPCC)4
Global emissions vs 2019
0%
(7) %
(41) %
UK Government
UK emissions vs 2019
(28) %
(42) %
(42) %
EU Commission
EU emissions vs 1990
(55)% (via Fit for 55)
(55) %
(62) %
US Government
US emissions vs 2005
(37) %
(50) %
(58) %
ICAO
Aviation (net) emissions vs 2019
(15)% (via CORSIA)
(15) %
(15) %
1
Risks or opportunities might be increasing (up), decreasing (down) or stable from a business perspective. IAG calculates this based on central
strategy modelling and economic forecasting, and the trend shown is based on an end-of-year assessment, relative to in-year review.
2 Whether the cost impacts depend more on the temperature scenario, or type of transition (orderly or disorderly).
3 Representative Concentration Pathway (RCP), a globally recognised scenario for physical changes under different temperature ranges.
4 A 41% drop by 2030 represents an orderly transition. The IPCC also represents a disorderly transition ((27)%) because smaller global emissions
reductions to 2030 require rapid carbon reductions after 2030 to return to 1.5°C by 2100.
TCFD risk impacts and mitigation opportunities
Below we have detailed risks identified from the Group’s TCFD assessment and their relationship to IROs identified through IAG’s
double materiality assessment.
Physical
Resilience to
acute weather
events
Days of lost revenue
due to additional flight
disruption and
associated mitigation
and passenger
compensation costs
Existing operational
resilience processes can
minimise extra
disruption (for example,
disruption caused
by turbulence during
US-UK flights)
Climate
change and
emissions
management
Review of the exposure of
Group activities to
temporary climatic impacts
that may affect our ability
to operate. Examples include
severe weather events
(turbulence, depressions,
high precipitation) that alter
flight schedules and lead to
cancellations and diversions
of flights
Airlines
Resilience of
routes and
assets to chronic
climate changes
Changed revenue from
a different route
network or a different
frequency of flights to
climate-affected
destinations; changes in
operational
maintenance costs
Scale of route network
means impacts above
plan are not material
so no immediate action
needed. Aircraft are
mobile assets that can
be moved to different
locations to take into
account, for example,
a higher incidence
of hurricanes in the
Caribbean
Climate
change and
emissions
management
Location-based assessment
of high-risk destinations
susceptible to the impacts
of chronic climate and
atmospheric changes.
Assessment of airports with
greater exposure to rising
sea levels that may affect
our ability to operate there,
or sell holidays to related
destinations. Measured as
both a revenue loss and
an increased operating cost
to the business
Airlines
Risk description
Potential unmitigated
financial impacts
How IAG is mitigating
Related double
materiality
assessment topic
TCFD assessment summary
Primary Group
operating
company
activity exposed
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Market
Customer spend
due to
perceptions of
ESG progress
in IAG or the
aviation sector
Customers change
frequency of flying,
duration of trips or
spend less relative to
other carriers or other
travel modes
Delivering emissions
reductions, developing
emissions dashboards
for customers,
expanding customer
communications,
support for global
instruments like CORSIA,
working via trade
associations to advance
solutions
Climate
change and
emissions
management
Assessed the impact of
potential cost increases of
sustainable services for
customers and loyalty ratios
due to the connection with
the brand through shared
values
Airline and
loyalty
businesses
Perceived
quality of offset
and removal
projects
Exposure to sudden
variability in prices,
cost of CORSIA credits,
scale of growth in costs
by 2050 due to
available volume of
removals to deliver
net zero
Financial planning to
manage price volatility,
governance to ensure
offset quality, a removals
roadmap based on
external evidence,
advocacy for policy
support and monitoring
regimes
Climate
change and
emissions
management
Measured as an increased
operating cost based on
forecast assessment of
CORSIA market prices and
IAG CORSIA obligations
Airlines
Activism and
direct action
protests for
climate inaction
Risk of shareholder
activism, where NGOs
or activists may legally
challenge the Company
for perceived climate
inaction, potentially
resulting in costly legal
battles and reputational
damage
Implementation of
industry best practices
and regulatory
requirements of the
countries in which we
operate. Increasing
transparency of
information to our clients
and stakeholders and
maintaining active
communication with them
Climate
change and
emissions
management
Assessed the likelihood of
action against the aviation
sector. IAG has been a key
player in influencing the
adoption of ambitious goals
within the sector and
maintains a very active
relationship with its key
stakeholders
Airlines
Supply chain
readiness
Sustainability
compliance or
technology change
causes an unplanned
change in the cost of
goods and services
provided to IAG
Supply Chain
Sustainability
Programme which
includes ESG scorecards
and supplier risk
screening
Responsible
supply chain
Measured as an increased
cost of goods and services
purchased by IAG from its
suppliers
All operating
companies
SAF delivery
against
committed
offtake
agreements
SAF deliveries from
agreed commitments
fail to materialise due
to weak market supply
or failed project
development, exposing
IAG to market-priced
SAF, buyout penalties
or carbon costs
Securing SAF deals and
taking equity in early-
stage projects where
relevant. Monitoring SAF
project development
and seeking volume
above target levels
Climate
change and
emissions
management
Measured the cost of SAF
using market prices to
achieve IAG’s 2030
SAF target
Airlines
Policy
Litigation
against claimed
carbon
reductions from
offsetting
Litigation for the use of
credits towards
voluntary or compliance
offsetting that do not
deliver claimed emission
reductions and lead to
legal cost
Due diligence conducted
on carbon offsetting
projects and internal
guidance prepared for
external
communications
Climate
change and
emissions
management
Assessed using analysis of
the most recent litigation
affecting the aviation sector
and a view of risk to IAG
Airlines
Risk description
Potential unmitigated
financial impacts
How IAG is mitigating
Related double
materiality
assessment topic
TCFD assessment summary
Primary Group
operating
company
activity exposed
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Demand impact
of EU and UK
climate policy
Pass-through of
industry-wide costs
affects ticket prices
and, therefore, demand
Impacts of emerging
policy assessed as part
of longer-term financial
planning and strategy
Climate
change and
emissions
management
Measured carbon market
and fuel costs as a
percentage of IAG total ESG
costs in 2030
Airlines
Resilience to
changes in
CORSIA/ETS
pricing
Exposure to long-term
price increases affects
compliance costs
Hedging strategy to
reduce the impact of
price volatility; using
carbon prices in fleet
and financial planning
Climate
change and
emissions
management
Compared carbon market
price forecasts on the
Group’s route network
Airlines
Policy
asymmetry
across regions
Changing numbers of
customers relative to
other carriers who are
under more favourable
or more restrictive
policy regimes
Advocacy for global
solutions such as the
ICAO Long-Term
Aspirational Goal
agreed in 2022
Ethical
business and
regulatory
compliance
Assessed by reviewing
different regulatory
obligations by country and
determining their
implications for IAG
Airlines
Extra regulation
on activity
rather than
emissions
Industry-wide taxes
or levies increase
operating costs and
have potential demand
impacts; demand
management measures
equate to lost revenue.
Noise restrictions are
not included in this risk
but are reviewed as
a separate risk through
the ERM framework
Advocacy in support
of emissions-reducing
measures like SAF and
against economically
inefficient measures
like taxes
Ethical
business and
regulatory
compliance
Assessed the potential
impact of regulatory
requirements by policy and
jurisdiction
Airlines and
loyalty
business
Changes in SAF
policy
Higher prices of SAF
in core markets due
to lack of investment
in SAF production
or cost of inputs
Advocacy for SAF
policy, e.g. via UK Jet
Zero Council, and a
strategy to procure SAF
in regions where
supportive policy exists
Climate
change and
emissions
management
Assessed our exposure to
market-priced SAF, relative
to our ability to contribute
to the development of
appropriate SAF policy and
the design of effective SAF
incentive schemes
Airlines
Regulation on
non-CO2 effects
Potential multiplier
on ETS costs; lost
revenue due to route
restrictions, or
operational costs
due to non-CO2
management
External research suggests
just 10% of flights could
account for 80% of
impacts. Advocacy via
trade associations to
support monitoring and
targeted solutions such
as route optimisation
and SAF uptake
Climate
change and
emissions
management
Assessed the potential cost
implications of non-CO2
regulations on Group
operations. We continue to
support research initiatives
that help improve the
understanding of non-CO2
impacts on the climate
Airlines
Technology
Access to and
readiness for
lower-emission
technologies
Higher ETS costs if
technology access
is restricted or
technology
development is slow
Hangar 51 Ventures team
aligns research and work
with the Flightpath net
zero strategy
Climate
change and
emissions
management
Assessed the marginal cost
of different carbon removal
technologies and the role
they may play in IAG’s
climate transition plan
Airlines and
IAG Cargo
Access to SAF
Changing unit prices
of SAF in core markets
Securing SAF deals and
taking equity in early-
stage projects where
relevant
Climate
change and
emissions
management
Assessed global SAF supply,
SAF mandates and SAF
volume needed to deliver
IAG’s 2030 SAF target
Airlines
Risk description
Potential unmitigated
financial impacts
How IAG is mitigating
Related double
materiality
assessment topic
TCFD assessment summary
Primary Group
operating
company
activity exposed
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TCFD opportunities and financial impacts
Below we have detailed opportunities identified from the Group’s TCFD assessment and their relationship to IROs identified through
IAG’s double materiality assessment.
Opportunity description
as per previous page
Potential financial impacts
Related double
materiality
assessment topic
TCFD assessment summary
Primary Group
operating company
activity exposed
Market
Strategic
investment in SAF
Securing quantities of SAF to meet
internal and regulatory targets not
only reduces IAG's climate impact,
but also offers a significant potential
operating cost reduction per year
against the Group’s carbon
market obligations
Climate change
and emissions
management
Screened the market to identify
supportive policy incentives to
enable a green transition, which
will help IAG secure early
supply and avoid market
price exposure
Airlines
Incorporation of
new and more
efficient fleet
By introducing new, more fuel-
efficient aircraft to the fleet, Group
airlines are able to mitigate
compliance costs incurred under
carbon markets, which regulate
carbon emissions on the routes
they operates
Climate change
and emissions
management
Updated internal carbon pricing
modelling to assess the
contribution of new, more
fuel-efficient aircraft towards
delivering IAG's climate
objectives, and the reduction in
associated operational costs
Airlines
Technology
Investment in lower
emissions
technologies
Implementing new technologies such
as lighter on-board equipment or
software to enable better matching
of fuel volumes to in-flight needs
presents an opportunity for higher
fuel efficiency, which can help
reduced operating costs
Climate change
and emissions
management
Analysed the positive
contribution new technology
brings to direct operations,
reducing fuel consumption and
waste generation, for example
on cargo storage solutions such
as straps and pallet design.
Assessed the impact of
investment in carbon removals
for developing the market
signal needed to scale-up
future supply
Airlines and loyalty
business
Strategic venture
capital investment
and start-up
engagement
programmes
In its pursuit of net zero carbon
emissions by 2050, IAG has a
significant financial opportunity in
investing in innovative solutions to
address its emissions. This involves
exploring partnerships and cutting-
edge technologies to accelerate
progress towards this goal
Climate change
and emissions
management
Assessed the contribution of
different technologies in our
operations towards achieving
our climate objectives. IAG's
collaboration with ZeroAvia to
explore hydrogen-powered
aircraft technology exemplifies
this approach
Airlines
Investing in
product innovation
and sustainable
materials transition
By developing new products, such as
those focused on onboard waste
reduction, IAG can capitalise on
growing consumer demand for
sustainable alternatives and reduce
operational costs in the long run
Waste
management
and circular
economy
Assessed the impact of
supporting product research
and development for the
transition towards more
sustainable supply chains
All operating
companies
E1-2 – Policies related to climate change mitigation
and adaptation
The environmental sustainability policy sets out IAG’s
commitment to recognise, manage and reduce our impact
on the planet. This includes conducting our business in an
environmentally responsible manner and complying with
relevant environmental legal requirements and other
obligations. We also embed sustainability into our business
strategy and decisions and are committed to:
• Using SAF and offset programmes
• Regularly engaging with key stakeholders to assess our most
material issues
• Minimising negative environmental impacts via the efficient
use of resources and energy, and reducing emissions, noise
and waste where possible
• Implementing environmental management systems aligned
to ISO 14001 and robust environmental governance processes
• Monitoring, reporting and receiving external verification
of our material environmental impacts
• Ensuring robustness and transparency in our non-
financial disclosures
• Ensuring our external positions reflect our material
issues and goals
• Working to ensure that our environmental strategy
and targets are aligned with the latest scientific
understanding of impacts
• Creating awareness of our environmental actions with
our key stakeholders
• Taking action to drive change and create a more sustainable
airline industry
Proposed timescales for the delivery of the Group’s climate
ambitions are set out in the environmental sustainability policy
and align to the transition plan detailed in this Sustainability
statement. The environmental sustainability policy also details
timescales for action to address the impacts of waste and noise
from our operations.
IAG issues Group instructions to its operating companies
to align actions towards delivering our climate change
mitigation and adaptation strategy. The Group Sustainability
Officer is responsible for setting this strategy, with the approval
of the Chief Financial and Sustainability Officer and the
CEO and oversight by the Safety, Environment and Corporate
Responsibility (SECR) Committee. The heads of sustainability
for each operating company report to IAG quarterly on material
KPIs used to measure IAG’s progress. The Group instructions
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include guidance for the cost accounting of sustainability
measures and impacts in the completion of business planning,
and how to engage with suppliers on sustainability
issues (detailed under the Third Party Code of Conduct
since December 2024, and its predecessor Supplier
Code of Conduct).
Under the IAG Code of Conduct, IAG and its operating
companies are committed to immediately reporting any
situation that could pose a risk to the environment.
This underlines our commitment to ensuring the health,
safety and security of our workforce and to comply with
applicable environmental laws and regulations everywhere
we operate to minimise our environmental impact.
E1-3 – Actions and resources in relation to climate
change policies
IAG’s environmental sustainability policy sets out our approach
to monitoring compliance with environmental policies and how
we approach associated risks and their management across
Group businesses. Actions taken under this policy to address
the impacts of climate change include:
• Our Audit and Compliance Committee oversees IAG non-
financial disclosures.
• Sustainable aviation risks have been identified as a principal
risk and are reviewed and assessed as part of our Group-wide
enterprise risk management processes.
• The IAG Code of Conduct and Third Party Code of Conduct
set out our commitment to doing business ethically,
transparently and with integrity and to maintaining standards
of sustainability. We want to work with suppliers who share
our values and ways of working. Mandatory training informs
our colleagues. IAG has embedded sustainability-specific
governance into the Group.
• Our Board of Directors provides oversight and
direction for environmental programmes through the
SECR Committee.
• The IAG Management Committee provides the key forum
for reviewing and challenging these programmes and
setting strategy.
• The IAG Sustainability Steering Group of senior
representatives from across the business provides
oversight of sustainability strategy, targets, initiatives
and programmes.
• The IAG Group sustainability strategy sets out policies
and objectives, strategy, targets, performance metrics
and our approach to risk management, compliance and
stakeholder engagement.
As categorised under our transition plan, and detailed in our
Flightpath net zero strategy, the actions taken to address the
impacts of climate change are focused on the following areas:
New aircraft and operational efficiency
New aircraft
IAG is investing around €12.6 billion between 2025 and 2029
for 171 new efficient aircraft. These aircraft will increase the fuel
efficiency of IAG’s operations compared to the aircraft they
replace. IAG is also supporting the development of new aviation
technologies, which includes investment in ZeroAvia since
2020, a leading developer of hydrogen-electric aircraft.
2024 examples of emission reductions achieved from new
aircraft include:
• Aer Lingus welcomed two new Airbus A320neo aircraft
to the fleet in June to operate on short-haul routes.
These aircraft are up to 20% more fuel efficient than the
Airbus A320ceo aircraft they replace.
• British Airways welcomed six Airbus A320neo, two A321neo
aircraft and one A350-1000 aircraft. The A350-1000 aircraft
use up to 35% less fuel than the aircraft it replaces as per
the aircraft manufacturer’s claims.
• In November, Iberia became the first airline to commercially
operate the new Airbus aircraft A321XLR, a single-aisle
aircraft that can operate on long-haul routes. As per the
aircraft manufacturer’s claims, this will help improve Iberia’s
carbon intensity by achieving up to a 30% lower fuel
consumption per ASK flown, compared with current wide-
body models.
Ground-based operational efficiencies are also being delivered
through equipment upgrades to ground vehicles.
• In 2024, British Airways overhauled its airport equipment at
Heathrow so that more than 90% of its vehicles and ground
equipment are low emissions, by using either hybrid engines
or operating on hydrotreated vegetable oil (HVO) fuel.
Fuel efficiency programme
Each airline has a fuel efficiency programme which supports
flight planning and enables pilots to increase fuel efficiency.
Measures to improve operational efficiency employed by
our airlines include the use of single-engine taxiing and
delaying engine start-up to save carbon emissions prior to
take-off. IAG brings together sustainability colleagues, fuel
management experts and pilots in the Carbon Efficiency
Working Group to leverage this expertise and share best
practice to develop fuel efficiency initiatives towards our
carbon reduction objectives.
In 2024, Aer Lingus ran a fuel efficiency internal
communications campaign to encourage the use of more
efficient operational and flying procedures to reduce fuel
burn (e.g. pilots using single-engine taxiing and more efficient
flight plans). Aer Lingus also participated in the International
Day of Clean Air for Blue Skies on 6 September, operating a
series of flights on an A320neo applying some key fuel-saving
initiatives to showcase their potential when applied collectively.
Sustainable Aviation Fuels (SAF)
SAF is the main term used by the aviation industry to describe
a non-conventional (fossil derived) aviation fuel. SAF is the
preferred IATA term for this type of fuel although when
other terms such as sustainable alternative fuel, sustainable
alternative jet fuel, renewable jet fuel or biojet fuel are used,
in general, the same intent is meant.
‘Biofuels’ typically refers to fuels produced from biological
resources (plant or animal material). However, current
technology allows fuel to be produced from other alternative
sources, including non-biological resources; thus, the generic
description of SAF is used.
The chemical and physical characteristics of SAF are almost
identical to those of conventional jet fuel and they can be safely
mixed with the latter to varying degrees, use the same supply
infrastructure and do not require the adaptation of aircraft or
engines. Fuels with these properties are called ‘drop-in
fuels’ (i.e. fuels that can be automatically incorporated into
existing airport fuelling systems). This definition is available on
the IATA website.
The feedstocks for these fuels, currently waste materials such
as used cooking oil, absorb CO2 in their growth cycle before
this carbon is recycled into fuel and then emitted during the
flight. SAF produces similar levels of carbon dioxide to
conventional aviation fuels when burned, but the carbon
dioxide generated is already part of the carbon cycle and is not
extracted from the ground specifically for creating aviation fuel.
This means that using SAF results in a reduction in carbon
emissions compared to the traditional jet fuel it replaces over
the lifecycle of the fuel.
There are currently eight certified pathways to making SAF
based on use of specific technologies and feedstocks. These
processes are certified to international standards to ensure the
fuels are safe to use. IAG requires its SAF to comply with strict
sustainability certification schemes.
Emission reductions from the use of SAF are measured as the
reduction of carbon emissions on a greenhouse gas lifecycle
basis, typically by 80% or more compared with the fossil jet
fuels it replaces. SAF also contains fewer impurities (such as
sulphur), which enables an even greater reduction in sulphur
dioxide and particulate matter emissions than fossil-based fuels.
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Supporting advanced SAF pathways
IAG continues to make direct investments in new and innovative
SAF production capacity, catalysing the wider development
of the SAF market. These investments are typically coupled
with SAF purchase agreements, which are critical to the
financial viability of the new SAF production capacity.
As of 31 December 2024, IAG’s total expenditure (including
future commitments) for SAF offtake exceeded $3.5 billion.
IAG is working with technology developers to establish a range
of SAF supply options, including the projects listed in this section.
We aim to be a leader in supporting developed SAF production
pathways that achieve the greatest lifecycle emission reductions
and can accelerate our efforts to reduce carbon emissions.
In February 2024, IAG signed its largest SAF purchase
agreement with Twelve, a SAF project based in Washington,
which produces e-SAF made from CO2, water and renewable
energy. Under the terms of the 14-year contract, Twelve will
supply IAG with 260 million gallons (785,000 tonnes) of e-SAF,
with first deliveries expected from 2025. In November,
IAG announced a purchase agreement with Infinium, which
will also supply e-SAF from 2026, under a ten-year agreement.
These purchase agreements increased IAG’s total volume
of SAF secured to more than one-third of the volume required
to meet our 10% SAF by 2030 target. For SAF produced from
other pathways, the Group is also working to support projects
which either remove carbon or capture and store it.
Key SAF partnerships
Producer
Production location
Anticipated supply start
Technology pathway
BP
Europe; China
Since 2021
Hydrotreated esters and
fatty acids (HEFA)
Neste
Finland; Singapore
Since 2021
HEFA
Phillips 66
Humber, UK
Since 2022
HEFA
Repsol
Cartagena, Spain
Since 2022
HEFA
Moeve (formerly Cepsa)
Huelva, Spain
Since 2023
HEFA
EcoCeres
Shanghai, China
Since 2024
HEFA
ST1
Gothenburg, Sweden
Since 2024
HEFA
LanzaJet
Georgia, USA
2025
Alcohol-to-jet
Twelve
Washington, USA
2025
Power-to-liquid
Aemetis
California, USA
2026
HEFA
Infinium
Texas, USA
2026
Power-to-liquid
Wastefront
Sunderland, UK
2027
Tyre pyrolysis oil
Gevo
South Dakota, USA
2028
Alcohol-to-jet
LanzaJet
Teeside, UK
2028
Alcohol-to-jet
Nova Pangaea
Teeside, UK
2028
Advanced bioethanol
Velocys
Immingham, UK;
Mississippi, USA
2029
Fischer-Tropsch
Role of SAF in the IAG transition plan
SAF is an important part of IAG’s work towards our goal to
achieve net zero emissions by 2050. In 2021, the Group set
a target of using 10% SAF a year by 2030, dependent on
appropriate government policy support. IAG expects to use
SAF for 70% of its total fuel in 2050, which will contribute to a
40% reduction in lifecycle CO2 emissions in the same year.
Delivering on our commitment
In 2024, Group airlines used more than 162,000 tonnes of SAF,
an increase of 203% versus 2023, and one of the highest
volumes globally. This saved more than 469,000tCO2 on
a lifecycle basis, accounting for 1.9% of IAG’s total fuel.
SAF governance in IAG
IAG launched a SAF Management Group in 2023 comprised
of colleagues from IAG sustainability, Group Finance and each
operating company. The SAF Management Group meets
monthly and reports to the SAF Steering Group. Please refer
to section ‘ESRS 2 General Disclosures’ of this Sustainability
statement for more details.
Supporting emissions reductions for our customers
To support the scale-up of SAF production globally, IAG offers
corporate customers the opportunity to contribute towards
SAF costs to support their own Scope 3 emission reductions.
Thanks to customer contributions, in 2024 IAG announced
the largest (47,700 tonnes of SAF with DHL) airline Scope 3
agreement to date, which will help us continue to scale
our SAF use.
Carbon removals
IAG supports the inclusion of carbon removals in industry
decarbonisation pathways, and in external assessments
of support for the 1.5°C global ambition.
Group airlines offer customers the opportunity to make
a financial contribution to support carbon removal projects,
which IAG supports. To date, British Airways customers have
supported removals projects including mangrove restoration
in Pakistan and a biochar project in Oregon, USA.
By 2050, IAG will only use carbon removals to mitigate any
residual emissions from its operations and supply chain. IAG
continues to encourage suppliers to reduce emissions and
transition from offsets to removals by including its sustainability
clause to all contracts with suppliers, including renewed or
amended contracts across the Group.
Based on the latest roadmap, the Group expects to use
approximately 100MT of carbon removals between 2022 and
2050 to mitigate its Scope 1 emissions and could potentially be
removing 2MT annually in 2030, conditional on clear, globally
agreed verification and quality standards for removals and
appropriate policy support such as inclusion in ETS schemes.
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Carbon reductions in our supply chain
IAG is delivering a programme of work designed to support
carbon reductions by its suppliers and value chain. This involves
improving the quality of emission reporting and working
collaboratively to deliver emission reductions with suppliers.
IAG GBS leads our engagement with our supply chain and is
embedding sustainability aspects into the day-to-day operation
of the organisation, such as sustainability targets in the
performance objectives of all IAG GBS employees. Through
its ‘Lunch and Learn’ programme, sustainability colleagues have
also delivered four information sessions during 2024, covering
supply chain management, the circular economy, SAF and
working towards a net zero supply chain.
To improve the quality of emissions reporting in our value
chain, the Group has developed a comprehensive Scope 3
measurement in partnership with Watershed across all
applicable Scope 3 emission categories. More information
is available in section ‘E6 - Gross Scope 1, 2, 3 and Total GHG
emissions’ of this Sustainability statement.
IAG GBS also kicked-off its Supplier Engagement Programme
in 2024, which encourages suppliers to share their sustainability
commitments and carbon reduction efforts to identify best in
class practices and potential collaborations to achieve common
goals. As part of the programme, IAG GBS engaged with
suppliers across the following procurement categories: aircraft
seats, engines and catering.
IAG continues to work with EcoVadis to focus on driving Group
suppliers to improve their sustainability performance to reduce
emissions for all goods and services provided to IAG.
Case study: Recaro
IAG GBS team members from the Sustainability and
Procurement functions, joined by British Airways, kicked off
IAG’s 2024 Supplier Engagement Programme with Recaro.
As part of IAG’s Supply Chain Sustainability Programme, IAG
GBS works to strengthen the relationship with our suppliers
by sharing climate commitments and best practices. During
a workshop, members of Recaro showcased their new ‘R
Sphere’ economy class concept seats and other circular
economy initiatives.
This engagement provides IAG with the opportunity to
explore carbon reductions across its aircraft operations
through weight reduction in each aircraft seat. It also
supports the Group’s circular economy initiatives, by using
recyclable material solutions across the seats' lifecycle from
its production to its end-of-life.
Metrics and targets
E1-4 – Targets related to climate change mitigation and
adaptation
IAG’s transition plan focuses on reducing lifecycle CO2 from jet
fuel use, as this represents over 99% of Scope 1 emissions. The
Group measures its full carbon footprint and tracks multiple
metrics each quarter to ensure progress on reducing emissions.
The following targets are set to mitigate IAG’s material impacts
as identified by the 2024 double materiality assessment.
Absolute emission reduction targets
IAG has a 20% reduction target for its net Scope 1 emissions by
2030 compared to 2019 levels and is working towards to net
zero emissions by 2050. Direct emissions associated with IAG’s
direct operations include emissions from jet fuel, diesel, petrol,
natural gas and halons. Sources of these emissions include
aircraft engines, boilers, auxiliary power units (APUs) and
ground vehicle engines. IAG’s target to reduce Scope 1
emissions includes reductions from the use of SAF in its gross
emissions calculation. The IAG Scope 1 net emission reduction
target equates to 21.6 million tCO2e by 2030, or 24.8 million
tCO2e in equivalent Scope 1 gross emissions.
Indirect emissions associated with electricity use in ground
facilities like offices, lounges, data centres and hangars
represent less than 1% of total IAG emissions, and, therefore,
IAG does not set a near-term target for the reduction of these
emissions. IAG monitors the use of renewable electricity across
its operations, and we are committed to net zero Scope 2
emissions by 2050.
In 2021 IAG was the first airline group worldwide to set a target
of net zero Scope 3 emissions by 2050. This was
complemented by a target of a 20% reduction in net Scope 3
emissions by 2030, compared to a 2019 baseline. These targets
will be delivered in collaboration with suppliers and other
stakeholders, by monitoring supplier sustainability performance,
engaging with suppliers on their sustainability plans,
embedding climate requirements into supplier contract clauses
and product specifications, and accounting for delivery of
existing supplier targets.
Carbon intensity reduction targets
IAG has a target to reduce the carbon intensity of its operations
by 12% from its 2019 baseline, to 80.0gCO2/pkm by 2025.
This target was achieved in 2024 (see section E1-6 for more
information). By 2030, it aims to achieve a 27% reduction
in gross carbon intensity, increasing to 39% by 2035 and 83%
by 2050.
Grammes of CO2 per passenger kilometre (gCO2/pkm) is a
standard industry measure of flight fuel efficiency. It is calculated
by dividing total jet fuel use by total passenger-km, assuming
one cargo-tonne-km is equivalent to 10 passenger-km,
then multiplying this value by a conversion factor of 3.15.
This calculation excludes the jet fuel used by franchisees,
cargo carried on other airlines, and engine testing. It excludes
no-show passengers, in line with industry guidance.
Other targets related to climate change mitigation and adaptation
SAF is part of IAG’s transition plan to reduce emissions on
a greenhouse gas lifecycle basis, typically by 80% or more
compared with the fossil jet fuels it replaces.
In 2021, IAG committed to 10% SAF usage on average across
its fleet by 2030, dependent on appropriate government policy
support and market supply. By 2050, it expects to use SAF
for 70% of total fuel.
IAG is also committed to supporting a variety of innovative carbon
removal solutions and is considering projects that are immediately
available and independently verified today, as well as more
innovative technology solutions. By 2050, IAG will only use carbon
removals to mitigate any residual emissions from its operations.
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E1-3 - Targets related to climate change mitigation and adaptation
Base year (2019)
2025 target
2030 target
2050 target
Gross Scope 1 GHG emissions (tCO2e)
N/A
20% reduction in net Scope 1
emissions, to 21.6 million
tonnes. This equates to a
reduction of gross emissions
to 24.8 million tonnes
Net zero Scope 1, 2 and 3
emissions across our full
operations and supply chain
Carbon removals for any
residual emissions. This
equates to a reduction
of gross emissions to
8.4 million tonnes.
Gross Scope 3 GHG emissions (tCO2e)
N/A
20% reduction in net Scope
3 emissions, to 8.7 million
tonnes
Energy efficiency and consumption reduction
(Flight-only carbon intensity (inclusive of SAF
CO2 reductions))
12% reduction in
carbon intensity, to
80gCO2/pkm
27% reduction in carbon
intensity, to 70gCO2/pkm
83% reduction in carbon
intensity
Fuel switching
(SAF fuel consumed)
N/A
10% SAF use by 2030
N/A
Electrification
Not material
Not material
Not material
Use of renewable energy
Not material
Not material
Not material
Phase out, substitution or modification of product
Not material
Not material
Not material
Phase out, substitution or modification of process
Not material
Not material
Not material
Other
‘5 by 2025’ waste
reduction and
recycling targets
N/A
N/A
E1-5 – Energy consumption and mix
IAG’s material energy consumption is from the use of jet fuel, which accounts for more than 99% of Scope 1 emissions. Please refer
to E1-6 – Gross Scope 1, 2, 3 and total GHG emissions regarding the emissions intensity per net revenue.
Energy consumption and mix
Unit
% change vly
2024
Energy consumption from non-renewable sources
(1) Fuel consumption from coal and coal products
MWh
– %
–
(2) Fuel consumption from crude oil and petroleum products
MWh
11 %
109.91
of which is from jet fuel
MWh
11 %
109.72
of which is from gas oil for generators
MWh
7 %
–
of which is from gas oil for airport vehicles (Gasoleo B)
MWh
(16) %
0.04
of which is from diesel for generators
MWh
(78) %
–
of which is from diesel for vehicles (Gasoleo A)
MWh
(42) %
0.14
of which is from petrol
MWh
84 %
0.01
(3) Fuel consumption from natural gas
MWh
7 %
0.12
(4) Fuel consumption from other fossil sources
MWh
– %
–
(5) Consumption of purchased or acquired electricity, heat, steam and
cooling from fossil sources
MWh
39 %
0.05
(6) Total fossil energy consumption (calculated as the sum of lines 1 to 5)
MWh
11 %
110.08
Share of fossil sources in total energy consumption
%
11 %
97.95 %
(7) Consumption from nuclear sources
MWh
– %
–
Share of consumption from nuclear sources in total energy consumption
%
– %
– %
Energy consumption from renewable sources
(8) Fuel consumption from renewable sources, including biomass (also
comprising industrial and municipal waste of biologic origin, biogas,
renewable hydrogen, etc.)
MWh
205 %
2.13
of which is from SAF
MWh
200 %
2.08
(9) Consumption of purchased or acquired electricity, heat, steam and cooling
from renewable sources
MWh
(6) %
0.17
(10) The consumption of self-generated non-fuel renewable energy
MWh
– %
– %
(11) Total renewable energy consumption (calculated as the sum of lines 8 to 10)
MWh
161 %
2.30
Share of renewable sources in total energy (Scope 1 and 2) consumption
%
1 %
2.05 %
Share of renewable sources in total electricity (Scope 2) consumption
%
(6) %
75 %
Total energy consumption (calculated as the sum of lines 6, 7 and 11)
MWh
12 %
112.38
Energy intensity per net revenue
Unit
% change vly
2024
2023
Total energy consumption from activities in high climate impact sectors per
net revenue from activities in high climate impact sectors (MWh//€)
MWh/€
3 %
0.0035
0.0034
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E1-6 – Gross Scope 1, 2, 3 and total GHG emissions
The scope of activities and emissions reported is consistent with previous years. IAG’s emissions are calculated by multiplying fuel
and energy use by appropriate conversion factors that are aligned with the Intergovernmental Panel on Climate Change (IPCC)
Fourth Assessment Report. 2024 UK Government conversion factors are applied across the Group as these are deemed to be the
most robust available and are suitable for international organisations reporting on UK operations, as per the DEFRA factors
definition. For Scope 2 emissions only a market-based factor has been used for Spanish locations due to the availability of reliable
data, and other factors such as International Energy Agency emissions factors are used in specific cases.
Unit
2024
2023
2019
% change
vly
% change
versus 2019
Scope 1 GHG emissions
Jet fuel consumed
MT fuel
8.5
8.1
9.7
5 %
(11) %
*SAF fuel consumed
KT fuel
162.2
53.6
–
203 %
– %
*Gross Scope 1 GHG emissions
million tCO2e
27.2
25.9
30.5
5 %
(11) %
Emission reductions from the use of SAF
kt CO2
469.3
158.1
–
197 %
– %
Flight-only carbon intensity (exclusive of SAF CO2 reductions)1
gCO2/pkm
79.4
81.0
89.8
(2) %
(12) %
*Flight-only carbon intensity (inclusive of SAF CO2 reductions)2
gCO2/pkm
78.1
80.5
89.8
(3) %
(13) %
Emission reduction initiatives (volume of emissions reduced)
ktCO2
114.2
86.8
77.4
32 %
48 %
CO2 per revenue tonne kilometre
gCO2e/RTK
781
805
898
(3) %
(13) %
Scope 1 net emission reductions
Percentage of Scope 1 GHG
emissions from regulated emission trading schemes
%
81 %
86 %
77 %
(6) %
5 %
ETS (including restated 2023 data)
million tCO2e
3.2
3.0
3.2
7 %
– %
CORSIA (2024 data expected by October 2025)3
tCO2e
–
–
n/a
– %
n/a
Voluntary offsets (excluding customer contributions)
kt CO2e
21.5
246.0
n/a
(91) %
n/a
Net Scope 1 GHG emissions (including restated 2023 data)
million tCO2e
24.1
22.7
26.9
6 %
(11) %
Other emissions from scope 1 operations
Methane (CH4)
kt CH4
19.2
18.0
18.5
7 %
3 %
Nitrous oxides
kt NO2
230.9
216.5
288.1
7 %
(20) %
Scope 2 GHG emissions
Gross location-based Scope 2 GHG emissions
kt CO2e
53.4
54.7
74.5
(2) %
(28) %
Gross market-based Scope 2 GHG emissions
kt CO2e
12.7
12.3
21.3
3 %
(40) %
Scope 2 carbon intensity
gCO2/MwH
0.2
0.2
0.2
(10) %
(30) %
Scope 3 GHG emissions
(emissions data from previous years below is restated in line with updated
methodologies - see further details in this section)
*Total gross indirect (Scope 3) GHG emissions
million tCO2e
12.0
11.2
10.9
7 %
10 %
(of which is market-based biogenic CO₂e)
tCO2e
3,466
317
462
n/a
n/a
Category 1: Purchased goods and services
million tCO2e
3.1
3.0
2.7
3 %
16 %
Category 2: Capital goods
tCO2e
151,506
278,945
359,204
(46) %
(58) %
Category 3: Fuel and energy-related production
million tCO2e
5.8
5.4
6.3
7 %
(7) %
Category 4: Upstream transportation and distribution
tCO2e
343,377
315,041
325,867
9 %
5 %
Category 5: Waste generated in operations
tCO2e
17,716
14,941
16,466
19 %
8 %
Category 6: Business travel
tCO2e
10,490
9,016
25,052
16 %
(58) %
Category 7: Employee commuting
tCO2e
90,374
52,970
50,631
71 %
78 %
Category 8: Upstream leased assets
tCO2e
–
–
–
– %
– %
Category 9: Downstream transportation and distribution
tCO2e
150
124
–
21 %
– %
Category 10: Processing of sold products
tCO2e
–
–
–
– %
– %
Category 11: Use of sold products
million tCO2e
1.2
1.0
0.3
30 %
313 %
Category 12: End-of-life treatment of sold products
tCO2e
6
15
–
(59) %
– %
Category 13: Downstream leased assets
tCO2e
8,845
10,577
–
(16) %
– %
Category 14: Franchises
tCO2e
613,482
548,562
839,512
12 %
(27) %
Category 15: Investments
tCO2e
587,581
583,016
16,704
1 %
3418 %
*TOTAL emissions
(Scope 1, Scope 2 location-based, Scope 3)
million tCO2e
39.3
37.1
41.4
6 %
(5) %
TOTAL emissions (Scope 1, Scope 2 market-based, Scope 3)
million tCO2e
39.2
37.1
41.4
6 %
(5) %
*Metrics with an associated target - please refer to ‘E1-4 Targets related to climate change mitigation and adaptation’ for details
1
Disclosed for the purpose of third-party corporate reporting. This carbon intensity figure is calculated without emission reductions from the use of SAF.
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288
2 The carbon intensity calculation used for calculation of IAG’s management incentive includes CO2 emission reductions achieved from SAF. SAF
reductions are calculated using actual lifecycle analysis (LCA) carbon intensity values for SAF fuel uplifted by airlines in the Group and subtracting
the achieved emission reductions from our total Scope 1 CO2 footprint.
3 Emissions covered under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is included in our net emission reduction
metrics, reflecting expected obligations above the CORSIA baseline arising during the first phase (covering 2024-2026 emissions) of the scheme.
Details of our net emissions under the scope of CORSIA for 2024 will be confirmed in 2025, following calculation of the CORSIA ‘Sectoral Growth
Factor’ by ICAO.
Gross emissions by country of activity
The table below shows 2024 GHG emissions aggregated by main country of our operations. Group airlines are assigned to the
country of hub operations.
Location
Unit
Scope 1
Scope 2, location-based
Ireland
thousand tCO2e
2,342
2.6
Spain
thousand tCO2e
9,407
16.8
United Kingdom
thousand tCO2e
15,500
25.9
Other
thousand tCO2e
n/a
9.1
Scope 3 emissions
In 2024 IAG has assessed all 15 categories of Scope 3 emissions,
as defined by the global GHG Protocol.
The Group has 17,500 suppliers and the scope of emissions
calculations within these categories is based on material
categories of spend – the two most material categories being
jet fuel and purchased goods and services, reported under
Category 3 and 1 respectively.
IAG continues to refine Scope 3 calculations based on the latest
data and assumptions. IAG GBS first partnered with Watershed,
a sustainability platform, in 2023 to improve reporting of IAG’s
Scope 3 Category 1 (Purchased goods and services) emissions.
Under Scope 3.1, emissions were previously determined based
on water usage only. This was replaced by a spend-based
approach and detailed analysis of emissions from IAG’s supply
chain, leveraging data from sustainability disclosures made
by suppliers and benchmark data for specific sectors where
supplier’ specific data was not available.
IAG has previously reported on 12 of the 15 relevant Scope 3
emission categories, applying standardised conversion factors
for instances where data from suppliers is not available.
Following further work with Watershed in 2024, all 15
applicable Scope 3 emissions categories are now reflected
in the Scope 3 measurement.
Improvements have been made to the emissions reporting
methodology for the following categories in 2024:
• Scope 3.2 (Capital goods) emissions previously included
aircraft manufacture and disposal, but aircraft disposal now
has been reclassified under Scope 3.5 (Waste generated in
operations), taking into account the aircraft weight, material
and disposal method.
• Scope 3.4 (Upstream transportation and distribution)
emissions previously reported under Scope 3.9 (Downstream
transportation and distribution) have been reclassified to
Scope 3.4, since these services are contracted out by the
Group. Additionally, IAG Cargo’s emissions from non-IAG
carriers are now included in this category.
• The methodology for determining emissions associated with
the use of sold aircraft under Scope 3.11 (Use of sold
products) is aligned with the GHG Protocol for those aircraft
sold to another airline or freighter during the calendar year.
This will include the future emissions of the aircraft, based
on its average expected life. Additionally, the end-of-life
treatment of those sold aircraft is now considered under
Scope 3.12 (End-of-life treatment of sold products).
• Scope 3.15 (Investments) became a relevant Scope 3
category for the Group, together with IAG’s associated,
joint ventures and other equity investments are reflected.
Work continues to improve the quality of Scope 3 emission
calculations from IAG’s supply chain, accounting as well for the
different reporting cycle that our suppliers and the companies
we invest in might have. Under the Third Party Code of
Conduct suppliers are encouraged to provide IAG with specific
emission information.
Standardised conversion factors are used where data from
suppliers is not available, and as more data from suppliers
becomes available some values may be restated. Any
significant restatements will be made in future reports
with explanations provided.
Emissions intensity per net revenue
Energy intensity is calculated by dividing total Group revenue by the sum of Scope 1 emissions and Scope 2 location-based
emissions.
GHG per net revenue
2024
2023
% change vly
Total revenue (as per the financial statements)
€32,100 million
€29,453 million
9 %
Total GHG emissions (location-based)
per net revenue (tCO2e/€)
0.00084
0.00087
(4) %
Total GHG emissions (market-based)
per net revenue (tCO2e/€)
0.00084
0.00087
(4) %
E1-7 – GHG removals and GHG mitigation projects financed through carbon credits
Carbon removal solutions extract CO2 already in the atmosphere and store it in biological or geological ways. Examples of carbon
removal include:
• Nature-based solutions (NBS) – include creating new forests and peatland;
• Bioenergy carbon capture and storage (BECCS) – capturing biogenic carbon from industrial facilities and storing it in e.g.
underground aquifers;
• Carbon capture and storage (CCS) with SAF production – as above and including the use of by-products that can absorb CO2; and;
• Direct air capture (DAC) – absorbing CO2 directly from the air using a catalyst.
IAG sees carbon avoidance projects as a key transitional solution en route to full use of carbon removals.
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Carbon removals within our 2050 roadmap
IAG carbon removals roadmap
million tonnes CO2 (MT)
IAG expects to use carbon removals to meet an increasing share of its CORSIA obligations between 2024 and 2035, conditional
on appropriate policy, and supports wider guidance on how to transition to removals such as that provided by the science-based
Oxford Offsetting Principles.
Disclosure of the use of quality criteria for carbon credits
Carbon credits cancelled in the reporting year
2024
% change vly
Total (tCO2e)
120,000
(44) %
Share from removal projects (%)
42 %
64 %
Share from reduction projects (%)
58 %
(22) %
Verified Carbon Standard (VCS) (%)
100 %
– %
Share from projects within the EU (%)
– %
– %
Share of carbon credits that qualify as corresponding adjustments (%)
58 %
– %
Carbon credits planned to be cancelled in the future
71,552 by 2123
Total (tCO2e)
(sum of total carbon credits cancelled in the reporting year and carbon credits planned to be
cancelled in the future)
191,522
Carbon credit project financing
IAG is committed to supporting a variety of innovative
carbon removal solutions and is considering projects that
are immediately available and independently verified today,
as well as more innovative technology solutions.
Our investment in greenhouse gas removal (GGR) technologies
involves a combination of forward delivery procurement and
project financial support, facilitating the scale-up of GGR
technologies alongside relevant government support.
When IAG or its operating companies choose to voluntarily
invest in carbon avoidance and removal projects, they work
in collaboration with key partners, carry out due diligence
to select reputable providers, and select projects carefully to
meet and align with verified quality standards, such as Gold
Standard, Puro Standard and Verified Carbon Standard (VCS).
For example, British Airways worked in partnership with CUR8
(a UK-based company dedicated to building the global market
for carbon removals), UNDO (a carbon dioxide removal project
developer specialising in enhanced rock weathering), and
Standard Chartered (representing financial institutions), to
launch a first-of-a-kind financing pilot in 2023, designed to help
scale up the carbon removals market. In 2024, British Airways
committed to purchase more than 33,000 tonnes of carbon
removal credits under this financing structure, delivered by UNDO
(through enhanced rock weathering), and by Standard Chartered
acting as the banking partner. This agreement helps create a
blueprint for carbon removal purchases, by enabling carbon
removal suppliers to access capital in the form of debt financing
via advanced purchase agreements.
The Group continues to advocate policies that will accelerate
global uptake of carbon removals, via the Coalition for Negative
Emissions and other trade associations, and supports the inclusion
of removals in the EU ETS and the UK ETS.
E1-8 – Internal carbon pricing
IAG applies carbon prices to financial planning and future
scenario analysis. The Group’s emissions from aviation
activities, which represents 99% of our Scope 1 emissions,
are largely regulated by explicit carbon prices under
participation in carbon markets including the EU ETS, UK ETS,
and CORSIA. Such regulations do not apply for activities
included in our Scope 3 emissions.
The IAG Fleet team uses updated internal carbon price
forecasts for short-haul and long-haul fleet purchasing
decisions, based on market values and reputable external
sources. The Group airlines use carbon prices in financial
planning, and Flight Operations teams and pilots use carbon
prices in operational decisions about fuel uptake. Potential
acquisitions also include an assessment of exposure to
climate-related issues and policy.
Internal carbon price forecasts are prepared based on
calculated prices derived from the Group’s exposure to external
carbon prices. For the period 2025 to 2027, UK ETS prices
of £50 – £55/tCO2e, EU ETS prices of €80 – €101/tCO2e and
CORSIA prices of €16 – €66/tCO2e were used for modelling
compliance costs and to inform internal carbon prices used
for impairment modelling. EU and UK ETS prices are based
on market prices and the UK Department for Transport (DfT)
Aviation Forecast, and CORSIA prices are based on internal
analysis and ICAO industry price forecasts.
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International Airlines Group | Annual Report and Accounts 2024
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11.2
Total removals
CCS (SAF)
NBS
BECCS
DACCS
2020
2025
2030
2035
2040
2045
2050
Additional environmental disclosures required under Spanish Law 11/2018:
Noise
GRI 305-7
IAG is reporting the following metrics under the transitional requirements of Spanish Law 11/2018. IAG is reporting this metric
to show progress towards our target to achieve 10% reduction in noise levels compared to 2019 by 2025. These metrics are reported
in accordance with GRI standards.
IAG only reports on the most stringent ICAO and ICAO Committee on Aviation Environmental Protection (CAEP) standards for
aircraft. The Group is over 99% compliant with ICAO Chapter 4 and CAEP Chapter 4 standards.
Metric
Unit
2024
2023
% change
versus 2019
Commentary
Noise per LTO
QC/LTO
0.86
0.86
(15) %
The improvement since 2019 is due to the use of newer
quieter aircraft. Values can fluctuate year on year due to
factors such as the mix of short-haul and long-haul flying.
NOx per LTO
kg/LTO
9.08
8.89
(13) %
Changes in flight operations, such as stage length,
account for slight year-on-year increase, but NOx
reductions since 2019 are attributable to the introduction
of newer aircraft.
ICAO Chapter 14
% of fleet at
standard
64 %
62 %
10 %
Compliance will continue to improve as newer aircraft are
introduced to the fleet and following retirement of older
aircraft.
CAEP Chapter 6
% of fleet at
standard
82 %
81 %
4 % The improvement is driven by fleet modernisation.
CAEP Chapter 8
% of fleet at
standard
49 %
47 %
14 % The improvement is driven by fleet modernisation.
Waste management
GRI 306-1/-2/-3 (2020)
IAG is reporting the following metrics under the transitional requirements of Spanish Law 11/2018. These metrics show progress
towards IAG’s waste reduction targets by 2025, compared to a 2019 baseline and are reported in accordance with GRI standards.
Waste type descriptors and waste disposal descriptors are provided in the appendix to this statement.
In 2024, IAG operations generated 52,834 tonnes of waste. This comprised of 51,806 tonnes of non-hazardous waste (98%), and
1,028 tonnes of hazardous waste (2%). Waste recovered or recycled was 6,767 tonnes (13%). On-board catering waste remains our
top waste producer activity, while the increase in annual office waste per full-time employee corresponds to increasing office use
and recruitment into corporate functions. Recycling in our offices has increased owing to the implementation of waste segregation
bins across a number of sites. The reduction in the maintenance and cargo recycling ratio is due to an improvement in Iberia's
methodology that more accurately reflects the final destination of the waste generated.
Metric
Unit
2019 base
2025 target
2024
2023
vly
On-board waste per passenger
Kg/pax
0.33
0.26 (-20%)
0.31
0.32
(3) %
Office waste per full-time employee
Kg/FTE
95.7
47.8 (-50%)
70.9
81.8
(13) %
Maintenance waste per unit of
activity
Kg/person-hr
0.63
0.47 (-25%)
0.11
0.11
– %
Cargo waste per unit of cargo
carried
Kg/tonne cargo
1.55
1.16 (-25%)
1.40
1.54
(9) %
On-board waste at hubs recycled/
recovered
%
24%
40%
18 %
20 %
(10) %
Office waste recycled/recovered
%
35%
60%
51 %
26 %
96 %
Maintenance waste recycled/
recovered
%
50%
70%
46 %
72 %
(36) %
Cargo waste recycled/recovered
%
63%
80%
57 %
77 %
(26) %
Other environmental metrics
IAG is reporting the following metrics under the transitional requirements of Spanish Law 11/2018, independent of IAG’s double
materiality assessment findings.
Metric
GRI standard
Unit
2024
2023
vly
Average fleet age
n/a
years
12.4
12.0
3 %
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Social (People and Prosperity)
ESRS S1 Own workforce
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
IAG’s own workforce covers 74,378 directly employed colleagues across our operating companies in a range of roles including
'in the air' (pilots and cabin crew) and 'on the ground' (airport operations, corporate functions, and maintenance). The identified
material impacts, risks and opportunities affecting our workforce are set out below.
Topic
Name
Impact, risk or
opportunity
Description
Location
Social internal
Employee
attraction,
retention and
engagement
Employee engagement and
advocacy
Employee satisfaction and engagement is central to the Group's strategy. When
employees are satisfied with their roles and experiences within the organisation, they
are more likely to feel engaged, motivated and fulfilled in their work. Each operating
company provides a compelling people proposition to ensure they are able to attract,
develop, retain and engage employees.
Own operations
Organisational culture and
sense of belonging
A strong organisational culture increases employees' sense of belonging,
contributing to a positive workplace environment, which can translate into
higher employee retention and productivity.
Own operations
Equity, Diversity
and Inclusion
Inclusive culture
Fostering an inclusive and diverse working environment promotes creativity,
collaboration and employee loyalty, driving organisational success and fostering
a positive workplace culture.
Own operations
Diverse workforce
Fostering diversity enriches a company's workforce and enhances organisational
performance.
Own operations
Equal opportunities and
equity for all
Providing equal opportunities and treating people fairly is critical to tackle
discrimination and create a diverse business.
Own operations
Employee health
and safety
Employee health and safety
Prioritising employee health and safety enhances job satisfaction, loyalty and
overall performance, driving organisational success and fostering a supportive
workplace environment. Taking care of employees’ health prevents and mitigates
the risk of injury to health, ensures a safe working environment, and leads to
higher levels of energy, motivation and resilience. This enables employees to
perform their duties more effectively and efficiently.
Own operations
Remuneration and
working
conditions
Social dialogue and collective
bargaining
Fostering constructive social dialogue with employee representatives is critical
to a harmonious workplace and long-term organisational success.
Own operations
Fair, sustainable and competitive
terms and conditions
Providing sustainable and competitive remuneration ensures talent retention, boosts
job satisfaction and maintains high levels of employee engagement and performance.
Own operations
Positive impact
S1-1 – Policies related to own workforce Equity,
Diversity and Inclusion
Relevant standards: GRI 405-1
Our approach and policies
At IAG we are proud of the diversity of the workforce across our
Group companies and the richness of backgrounds, experiences,
cultures and ideas that makes our businesses thrive. Our aim is that
all colleagues feel their unique difference is recognised and valued
and that they are treated fairly and equitably. IAG continues to bring
positive change and remain committed to our equity, diversity and
inclusion (EDI) ambition to create a diverse and inclusive culture
representative of the communities we live and work in and the
customers we serve. We also believe that a diverse workforce
performs better and is more resilient, innovative and productive.
Across the Group we are committed to:
• Championing inclusivity: Promoting a culture of inclusion
where everyone’s unique difference is recognised and valued
• Respect: Promoting discrimination-free work environments –
treating all individuals with dignity and respect, regardless of
age, sex, disability, race, religion/belief, marital/civil partnership
status, pregnancy and maternity, sexual orientation, gender
or any other protected characteristic
• Equal opportunities: Monitoring the composition and
representation within our workforce, and ensuring the principles
of IAG’s equity, diversity and inclusion policy are reflected
in the practices of our Group and the terms and conditions
of employment for colleagues around the Group
• Role modelling: Promoting values and expected behaviours
across the Group, with a particular focus on role modelling
• A respectful workplace: Every individual should be treated
with dignity, and we are committed to a positive, productive
workplace. We support each other and work to ensure and
sustain a working environment where the risk of unlawful
discrimination, harassment and any other inappropriate
behaviour is properly tackled and addressed.
We have Group-wide policies designed to tackle discrimination
and to focus on open and transparent people processes, targeted
choice of search partners, diverse recruitment shortlists and
more rigorous definitions of critical role requirements, which
focus on capabilities rather than experience. Further, each
operating company has its own EDI policy and/or an equality
plan - which takes into account the company’s legal and
cultural contexts, and regulatory requirements of its countries
of operation - and takes steps to bring these policies to life.
Actions, metrics and targets
Progress on gender diversity
At a Group level we have placed a specific focus on diversity of
senior leadership, specifically:
• Gender: In 2022, we set a Group-wide ambition for 40% of our
senior leadership roles to be held by women by 2025. The
gender diversity of our senior leadership is at 36%, reflecting a
6 percentage points increase since 2020. We remain committed
to achieving our 40% ambition. Our Board has a representation
of 45% women, the IAG’s Management Committee1 has 30%
women, and 27% of our IAG’s Management Committee and
direct reports1 are women. Overall 44% of our workforce across
the Group are women.
• Race and ethnicity: In 2023, we set a Group-wide ambition for
10% of the Group's UK senior leadership to be minority ethnic2
by end 2027, which we shared as part of our response to the UK
Parker Review. In 2024, 11% of our UK senior leaders group self-
disclosed as ethnically diverse2 (compared to 6% in 2023).
In 2024, 13% of our UK-based IAG Management Committee
and direct reports1 identified as ethnically diverse.
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S
1
The IAG CEO is included in the Board reporting. The IAG Management Committee and direct reports segmentation was first introduced in 2024.
2 Minority ethnic as defined by UK Parker Review – Asian, Black, Mixed/Multiple, Other.
As an international business it is important to have colleagues from
diverse backgrounds, nationalities and identities represented
across the workforces of our operating companies.
UK ethnicity
Our data relies on senior leaders self-disclosing their diversity
status. Individuals who have chosen not to report their ethnicity
are not included in the calculation as minority ethnic leaders.
Collaborating on equity, diversity and inclusion across
the Group and supporting progress across our industry
IAG’s Diversity Panel has representatives from across all
operating companies sharing best practices and leading
on the co-design and implementation of new EDI initiatives.
We continue to partner with Women in Hospitality, Travel
and Leisure (WiHTL), actively partner with International
Transport Association (IATA) and are committed to advancing
gender diversity as part of IATA’s ‘25 by 2025’ strategy
(a global initiative to enhance EDI and gender balance in
the aviation sector).
Co-parenting responsibilities
Relevant standards: GRI 401-3
Our approach and policies
The Group's operating companies support a healthy work–life
balance, especially in the context of co-parenting responsibilities.
They have a range of policies covering job-sharing, maternity,
adoption, paternity and shared parental leave to support
employees managing co-parenting commitments. Online
platforms facilitate a collaborative community for working
parents and carers, enabling the exchange of ideas and mutual
support, while also providing access to digital resources offering
valuable information for maintaining a healthy work-life balance.
Universal accessibility for people with disabilities
Relevant standards: GRI 405-1
Our approach and policies
The Group adheres to all pertinent legislation, guaranteeing
universal access for both employees and customers with
disabilities. Accessibility laws are followed across our facilities
and operations.
Our operating companies and businesses are committed to
supporting individuals with accessibility needs and disabilities
throughout the entire employment lifecycle, from inclusive
recruitment practices and making reasonable adjustments
during the hiring process, to fostering an accessible work
environment. A wide range of support is offered, including
assistive technologies, flexible work arrangements and ongoing
support to create an inclusive and equitable workplace for all.
Each of our operating airlines is committed to providing
a positive customer experience, including support for those
with disabilities.
Health, safety and wellbeing
Relevant standards: GRI 403-4, 403-6
Our approach and policies
The health, safety, security and wellbeing of our workforce,
our customers and suppliers is our top priority.
We adhere to all applicable safety and security laws,
regulations and procedures and continue to focus on and invest
in the area of health and wellbeing.
Each operating company maintains health and safety
management systems underpinned by policies and effective
governance processes.
Actions, metrics and targets
Workplace accidents increased in 2024, coinciding with a rise
in overall headcount. The lost-time injury (LTI) frequency rate
increased from 3.7 in 2023 to 4.0 in 2024, including a 17%
increase amongst cabin crew. While the LTI frequency has
increased, LTI severity has decreased. This means that although
there were more incidents, their impact in terms of time off
work was less severe.
Senior-level committees within each operating company ensure
that the risks are managed and controls are in operation, including
risk assessments, workforce and employee representative
engagement, communication and mandatory training.
Where health and safety issues do arise, each operating
company has detailed processes for reporting, investigating
matters, trend analysis and remediation.
Human rights and modern slavery
Our approach and policies
The principles of fair and equal treatment, non-discrimination,
compliance with the law and respect for human rights sit at
the centre of our Code of Conduct, IAG’s ethics and compliance
framework and Third Party Code of Conduct. The IAG Code
of Conduct applies to all employees and directors across the
Group and is communicated and shared widely. Employees
are equipped with comprehensive training and development
opportunities, ensuring they are well versed in the areas
covered by our Code of Conduct.
In 2024 IAG also implemented a human rights policy that
reinforces our commitment to upholding human rights and
conducting business in a manner that respects the rights and
dignity of all people. It confirms the Group’s commitment to
adhere to the Guiding Principles on Business and Human Rights
published by the United Nations. The Human Rights Policy
covers key principles such as diversity, equal opportunities,
labour standards, freedom of association, forced and child
labour, modern slavery and human trafficking.
The Human Rights Policy supports IAG’s wider compliance
framework and is fully aligned with the ‘Speak Up’ programme.
IAG had no known cases of human rights violations across the
Group during 2024, the same as in 2023.
IAG is taking steps to prevent incidents of modern slavery
within the Group and across its supply chains. The IAG Group
Slavery and Human Trafficking Statement outlines specific risks
and actions in relation to this area and is available on the IAG
website. This statement is made under section 54, part 5 of the
2015 UK Modern Slavery Act (MSA) and section 11(4)(b)(ii) of
the Fighting Against Forced Labour and Child Labour in Supply
Chain Act 2023 (Canada).
IAG remains committed to taking swift and robust action if any
evidence relating to slavery, human trafficking or labour abuse
in our business or supply chain is identified.
Actions, metrics and targets
IAG and the frontline employees in our operating companies
and supply chain are taking practical steps to prevent human
trafficking. Our operating airlines work closely with
governments and the airports in which they operate to ensure
that any suspected trafficking on our flights is identified,
reported and dealt with appropriately. IAG also supports the
2018 IATA resolution denouncing human trafficking and the
ICAO Guidelines for Reporting Trafficking in Persons by Flight
and Cabin Crew. IAG is one of the founding participants of
the ICAO Ad Hoc Working Group on Combatting Trafficking in
the Supply Chain (AHWG-TSP), an international, joint industry-
regulatory group providing advice to ICAO and assisting in the
development of guidance material on combating trafficking in
persons in an air operator’s supply chain.
Operating airlines also run awareness training and provide
practical guidance for staff to recognise and respond to
potential human trafficking situations and provide procedures
for reporting where any cases are suspected. This training
material is openly shared with key ground handling suppliers
across our network. IAG also works closely with the charitable
sector in this area to raise awareness amongst colleagues and
support organisations that share our mission to stamp out
human trafficking.
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Ethics and compliance
Our approach and policies
IAG is committed to conducting its business ethically,
responsibly and in full compliance with all applicable laws
and regulations. Guided by these principles, the Group strives
to foster a culture of accountability at every level of the
organisation. All directors and employees are expected to act
with integrity and in accordance with the laws of the countries
in which they operate.
As IAG continues to enhance its ethics and compliance
programme, it works to maintain the highest levels of trust
among all stakeholders, including employees, customers,
business partners and communities. During 2024, IAG
developed and rolled out a new Ethics and Compliance Charter,
with the purpose of setting out the framework for managing
ethics and compliance risks at Group level and within each
operating company, with clear roles and responsibilities to
effectively manage these risks.
In August, the Board of Directors approved a revised version
of the IAG Code of Conduct. This document defines the general
expectations for ethical conduct across the organisation and
sets out the principles that govern the conduct of all directors
and employees when performing their duties. This document
is available on the IAG website.
Recognising the importance of shared values throughout the
IAG value chain, the Group also published a new Third Party
Code of Conduct in 2024, establishing the behaviours expected
from business partners and addressing areas such as anti-
bribery, environmental responsibility and modern slavery.
The Third Party Code of Conduct is designed to help our
business partners align with our values and continue to
promote ethical standards within the industry.
In response to the evolving regulatory landscape and emerging
risks, the Audit and Compliance Committee approved a revised
three-year ethics and compliance plan, to ensure IAG will
continue to promote a risk-based approach for the
implementation of procedures, controls and processes.
The Board of Directors has full visibility of the plan and is
committed to promoting a culture of integrity and ethical
decision-making, in line with IAG’s Code of Conduct.
As part of the plan, the Group Head of Ethics and Compliance
revised the Group-wide whistleblowing policy and rolled out
a new whistleblowing procedure, standardising the processes
that are expected to be followed across the Group. The IAG
‘Speak Up’ policy and the procedure that regulates how to
handle whistleblowing investigations provide details on how
to report concerns and establish the framework to ensure
a robust and consistent approach to address issues and take
remedial action whenever necessary. The Audit and
Compliance Committee and subsequently the Board approved
the revised IAG ‘Speak Up’ policy during 2024.
More details on this are available in section ‘G1 - Business
Conduct’ of this Sustainability statement.
Actions, metrics and targets
IAG encourages employees to raise concerns about unethical
behaviour or organisational integrity. If employees have
questions about the right thing to do, or if they see or suspect
unethical or illegal conduct, they can also discuss the situation
with their line manager or contact a member of the Legal,
Compliance or Human Resource teams, or they can report their
concerns using the IAG’s ‘Speak Up’ hotline. Similarly, suppliers
are encouraged to contact their primary contact within the
business. Regardless, the whistleblowing channel is available
for everyone who wishes to report a concern.
Mandatory Code of Conduct training and communications
activities are carried out with directors, employees and third
parties on a regular basis to maintain awareness and
understanding of the principles that govern the conduct of the
Group. A new Code of Conduct training module was introduced
during 2024 to ensure that employees from different parts
of the business will be always prepared to make informed
business decisions.
Metric
Unit
2024
Number of employees who completed
annual Code of Conduct training
#
56,495
Number of employees who completed the
annual anti-bribery training*
#
12,088
*denotes total training completed over a period of 3 years
Anti-bribery and anti-money laundering
Refer to ‘G1-3 – Prevention and detection of corruption and
bribery’ for information on anti-bribery and anti-money laundering.
S1-2 – Processes for engaging with own workforce
and workers’ representatives about impacts
Relevant standards: GRI 2-30, 404-1, 404-2.
Our operating companies actively engage with trade unions to
secure balanced agreements that ensure fair, competitive and
sustainable remuneration. Local employee representatives and
unions provide both formal channels for collective agreements
and informal avenues for raising issues and concerns.
85% of the workforce across the Group is covered by collective
bargaining agreements.
IAG complies with International Labour Organization (ILO)
conventions. These conventions cover fundamental principles
and rights at work: freedom of association, the effective
recognition of the right to collective bargaining, the elimination
of all forms of forced or compulsory labour, and the elimination
of discrimination in respect of employment and occupation.
Additionally, the IAG European Works Council (EWC) facilitates
communication between employees and management on
transnational European matters. It includes representatives
from the different European Economic Area (EEA) countries,
meeting regularly throughout the year to be informed and,
where appropriate, consulted on transnational matters. (see
subheading ‘Employee’s within the Stakeholder Engagement
section of the Annual Report).
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Training and development
We continue to invest in the skills of our workforce and remain
committed to professional development and careers,
supporting colleagues in carrying out their daily work and
on topics such as: work and fleet modernisation, digitalisation,
AI, and customer and product investments.
IAG is committed to supporting the development of the regions
in which we operate by creating jobs, investing in infrastructure
and contributing to social and environmental causes. Our
operating companies engage young people in employment,
build their skills, prepare them for potential careers and attract
talent into the aviation sector – through work experience
placements, internships, apprenticeships and graduate
programmes. In many cases, these also open up different entry
routes for diverse talent.
All Group companies are required to run mandatory corporate
training courses on topics such as the Code of Conduct,
compliance with competition laws, anti-bribery and corruption
compliance, and data privacy, security and protection.
S1-3 – Processes to remediate negative impacts
and channels for own workforce to raise concerns
All operating companies have both informal and formal
channels for their own workers and workers’ representatives
to raise their concerns or needs directly with their employer
whether through internal grievance processes or through
collective complaints pursued by representatives via
established industrial processes, internal surveys or via our
whistleblowing channels. All of these facilitate complaints being
made on a confidential or open basis.
IAG has very clear policies that encourage employees to raise
concerns in an open and confidential manner and prohibit any
form of retaliation for doing so. The channels available to
employees and their representatives are clear and well
publicised, and in some cases agreed with trade unions or
employee representatives.
IAG, working in close collaboration with the HR and Compliance
teams of its operating companies, monitors the nature, type
and frequency of concerns raised so that it can take any
remedial action that is required.
S1-4 – Taking action on material impacts on own
workforce, and approaches to managing material risks
and pursuing material opportunities related to own
workforce, and effectiveness of those actions; S1-5 –
Targets related to managing material negative impacts,
advancing positive impacts, and managing material risks
and opportunities
Relevant standards: GRI 205-1/-2/-3
For detail of actions, metrics and targets towards addressing
material risks identified in this topic, see the sections on equity,
diversity and inclusion, ethics and compliance, health safety and
wellbeing, and human rights and modern slavery under ‘S1-1 –
Policies related to own workforce’.
S1-6 – Characteristics of the undertaking’s employees
Average headcount by gender
Permanent contracts
Temporary contracts
Metric
vly
2024
2023
vly
2024
2023
Men
5 %
39,368
37,337
1 %
1,538
1,530
Women
5 %
30,861
29,320
10 %
1,731
1,575
Total
5 %
70,229
66,657
5 %
3,269
3,105
Full-time contracts
Part-time contracts
Metric
vly
2024
2023
vly
2024
2023
Men
1 %
32,189
31,952
26 %
8,717
6,914
Women
(1) %
20,666
20,796
18 %
11,926
10,099
Total
– %
52,855
52,748
21 %
20,643
17,013
Average headcount by age
Permanent contracts
Temporary contracts
Metric
vly
2024
2023
vly
2024
2023
Under 30
9 %
12,004
10,969
13 %
2,211
1,957
30–50
3 %
34,204
33,076
(10) %
947
1,052
Over 50
6 %
24,021
22,608
16 %
111
96
Total
5 %
70,229
66,657 1
5 %
3,269
3,105
Full-time contracts
Part-time contracts
Metric
vly
2024
2023
vly
2024
2023
Under 30
8 %
11,690
10,822
20 %
2,525
2,104
30–50
– %
25,717
25,737
12 %
9,434
8,391
Over 50
(5) %
15,448
16,187
33 %
8,684
6,516
Total
– %
52,855
52,748 2
21 %
20,643
17,013
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1 Six employees are omitted due to missing date-of-birth information.
2 As above.
Average headcount by employee classification
Permanent contracts
Temporary contracts
Metric
vly
2024
2023
vly
2024
2023
Airport operations
2 %
15,796
15,531
8 %
929
864
Cabin crew
4 %
22,958
22,177
13 %
1,463
1,296
Corporate functions
11 %
15,832
14,215
(8) %
716
780
Maintenance
7 %
7,127
6,649
(2) %
161
165
Pilots
5 %
8,516
8,085
– %
–
–
Total
5 %
70,229
66,657
5 %
3,269
3,105
Full-time contracts
Part-time contracts
Metric
vly
2024
2023
vly
2024
2023
Airport operations
(15) %
8,966
10,565
33 %
7,759
5,830
Cabin crew
(2) %
15,329
15,564
15 %
9,092
7,909
Corporate functions
10 %
15,047
13,713
17 %
1,501
1,282
Maintenance
6 %
6,943
6,543
27 %
345
271
Pilot
3 %
6,570
6,363
13 %
1,946
1,721
Total
– %
52,855
52,748
21 %
20,643
17,013
Description
Average headcount numbers for each employment contract, in which the employee’s role was active during the reporting period
(pro-rated for period employed, with maximum value of one).
Commentary
Average headcount increased by 5% in 2024 to 73,498, reflecting our ongoing commitment to expanding capacity, enhancing
service and building resilience. The increase in part-time contracts reflects a change in SOUTH, with the majority of discontinuous
contracts being converted to permanent part-time roles. The increase in corporate roles is primarily driven by continued growth
of our global customer contact centres, the addition of management roles at Heathrow to build operational resilience and some
growth of head office corporate functions.
Total number and distribution of employees by gender
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Men
4 %
41,414
39,987
– pts
56 %
56 %
Women
4 %
32,964
31,807
– pts
44 %
44 %
Total
4 %
74,378
71,794
– pts
100 %
100 %
Total number and distribution of employees by region/country
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Europe
3 %
70,031
67,748
– pts
94 %
94 %
United Kingdom
5 %
39,318
37,500
1 pt
53 %
52 %
Spain
1 %
24,030
23,743
(1pt)
32 %
33 %
Ireland
3 %
5,323
5,159
– pts
7 %
7 %
Rest of Europe
1 %
1,360
1,346
– pts
2 %
2 %
Africa, Middle East and South Asia
12 %
2,831
2,527
– pts
4 %
4 %
North America
(1) %
945
950
– pts
1 %
1 %
Latin America and Caribbean
1 %
328
324
(1 pt)
– %
1 %
Asia Pacific
(1) %
243
245
– pts
– %
– %
Total
4 %
74,378
71,794
– pts
100 %
100 %
Description
The share of headcount across the Group by gender and by region/country on 31 December 2024. Due to legal constraints in some
of the countries where we operate, we are unable to collect and report data on other gender identities. We remain committed to
inclusivity and will update our practices as laws evolve.
Commentary
The gender distribution across the Group remained stable in 2024, with balanced growth rates for both men and women, accounting
for attrition and new hires.
Total headcount increased by 4% to 74,378, with growth across our key markets in the UK, Spain, and Ireland. The 12% increase
in Africa, Middle East and South Asia is largely attributed to continued expansion of customer contact centres in India.
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Total number of employees by contract type (permanent/temporary) and by gender
Permanent contracts
Temporary contracts
Metric
vly
2024
2023
vly
2024
2023
Men
4 %
39,950
38,410
(7) %
1,464
1,577
Women
3 %
31,193
30,198
10 %
1,771
1,609
Total
4 %
71,143
68,608
2 %
3,235
3,186
Description
Composition is a breakdown of headcount as at 31 December 2024. A temporary employment contract has a defined end date.
IAG does not currently employ any workers on non-guaranteed-hours contracts.
Commentary
There has been an increase in both permanent and temporary contracts. Permanent roles include employees on fixed-discontinuous
terms, a specific Spanish contractual arrangement for seasonal work in Spain. Gender differences reflects changes in workforce
composition by role.
Total number and distribution of employees by professional classification
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Airport operations
(2) %
16,396
16,784
(1) pt
22 %
23 %
Cabin crew
3 %
24,615
24,004
– pts
33 %
33 %
Corporate functions
9 %
17,171
15,811
1 pt
23 %
22 %
Maintenance
7 %
7,454
6,972
– pts
10 %
10 %
Pilots
6 %
8,742
8,223
1 pt
12 %
11 %
Total
4 %
74,378
71,794
– pts
100 %
100 %
Description
The employee category breakdown shows the distribution of the major groups within IAG’s workforce ’in the air‘ (pilots and cabin
crew) and ’on the ground’ (airport, corporate and maintenance).
Commentary
In 2024, the headcount distribution by professional classification remained relatively stable. The 9% year-on-year increase in
corporate roles was driven primarily by the expansion of our global customer contact centres and the addition of management roles
at Heathrow to build operational resilience. The 2% year-on-year decrease in airport operations roles resulted from TUPE transfers
of employees to and from other operators following the outcome of AENA licence tenders to provide handling services at
Spanish airports.
Total number of leavers and turnover rate by gender
Voluntary leavers
Voluntary attrition rate
Non-voluntary leavers
Non-voluntary attrition rate
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
vly
2024
2023
Men
7 %
2,885
2,694
0.2 pts
7.1 %
6.9 %
73 %
1,387
804
1.3 pts
3.4 %
2.1 %
Women
(1) %
2,417
2,450
(0.5) pts
7.4 %
7.9 %
9 %
727
664
– pts
2.2 %
2.2 %
Total
3 %
5,302
5,144
(0.2) pts
7.2 %
7.4 %
44 %
2,114
1,468
0.8 pts
2.9 %
2.1 %
Total number of leavers and turnover rate by age
Voluntary leavers
Voluntary attrition rate
Non-voluntary leavers
Non-voluntary attrition rate
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
vly
2024
2023
Under 30
4 %
2,332
2,246
(1) pt
16.4 %
17.4 %
24 %
491
395
0.4 pts
3.5 %
3.1 %
30–50
2 %
2,056
2,014
(0.1) pts
5.8 %
5.9 %
64 %
1,016
618
1.1 pts
2.9 %
1.8 %
Over 50
3 %
914
884
(0.1) pts
3.8 %
3.9 %
33 %
607
455
0.5 pts
2.5 %
2.0 %
Total
3 %
5,302
5,144
(0.2) pts
7.2 %
7.4 %
44 %
2,114
1,468
0.8 pts
2.9 %
2.1 %
Total number of leavers and turnover rate by employee category
Voluntary leavers
Voluntary attrition rate
Non-voluntary leavers
Non-voluntary attrition rate
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
vly
2024
2023
Airport
operations
16 %
1,358
1,168
1 pt
8.1 %
7.1 %
190 %
1,442
498
5.6 pts
8.6 %
3.0 %
Cabin crew
(20) %
1,218
1,523
(1.5) pts
5.0 %
6.5 %
(4) %
294
306
(0.1) pts
1.2 %
1.3 %
Corporate
functions
24 %
2,229
1,803
1.5 pts
13.5 %
12.0 %
(54) %
248
534
(2.1) pts
1.5 %
3.6 %
Maintenance
(37) %
287
452
(2.7) pts
3.9 %
6.6 %
7 %
47
44
(0.1) pts
0.6 %
0.7 %
Pilots
6 %
210
198
0.0 pts
2.5 %
2.5 %
(3) %
83
86
(0.1) pts
1.0 %
1.1 %
Total
3 % 5,302
5,144
(0.2) pts
7.2 %
7.4 %
44 %
2,114
1,468
0.8 pts
2.9 %
2.1 %
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297
Description
The number of leavers includes employees who leave voluntarily or due to dismissal, retirement or death in service. Voluntary
attrition occurs when employees choose to leave (e.g. resignation, retirement, voluntary redundancy) and non-voluntary attrition
occurs when employees leave for reasons other than a personal decision (e.g. compulsory redundancy, dismissal), excluding
employees on temporary contracts. The attrition rate is based on the number of leavers as a percentage of the average number
of Group employees in the year.
Commentary
There were 7,416 leavers and an overall attrition rate of 10.1% in 2024, of which 5,302 (7.2%) were voluntary leavers and 2,114 (2.9%)
were non-voluntary leavers.
The 0.8% increase in non-voluntary leavers is driven by a 5.6% rise in airport operations. This is due to TUPE transfers of employees
to other operators following the outcome of AENA licence tenders to provide handling services to third parties at Spanish airports.
The increase in non-voluntary leavers was higher for men compared to women, largely due to the workforce distribution in ground
handling roles.
Total number of employees by contract type (full-time/part-time) and by gender
Full-time contracts
Part-time contracts
Metric
vly
2024
2023
vly
2024
2023
Men
(2) %
32,193
32,936
31 %
9,221
7,051
Women
(5) %
20,569
21,733
23 %
12,395
10,074
Total
(3) %
52,762
54,669
26 %
21,616
17,125
Total number of employees by contract type (full-time/part-time) and by region/country
Full-time contracts
Part-time contracts
Metric
vly
2024
2023
vly
2024
2023
Europe
(4) %
49,018
51,306
28 %
21,013
16,442
United Kingdom
– %
26,874
26,899
17 %
12,444
10,601
Spain
(13) %
16,520
18,987
58 %
7,510
4,756
Ireland
5 %
4,400
4,202
(4) %
923
957
Rest of Europe
– %
1,224
1,218
6 %
136
128
Africa, Middle East and South Asia
13 %
2,708
2,402
(2) %
123
125
North America
11 %
602
540
(16) %
343
410
Latin America and Caribbean
5 %
244
232
(9) %
84
92
Asia Pacific
1 %
190
189
(5) %
53
56
Total
(3) %
52,762
54,669
26 %
21,616
17,125
Description
Composition is a breakdown of headcount as at 31 December 2024. Full-time employees are defined as those working full
contractual hours as at 31 December 2024.
Commentary
In 2024, there was a 26% increase in part-time contracts, particularly in Spain. This reflects a change in SOUTH, with the majority
of discontinuous contracts being converted to permanent part-time roles. The growth of full-time contracts in Africa, Middle East
and South Asia is largely driven by the expansion of our global customer contact centres in India.
Working hours
Time worked and holidays are different in each operating company as per the respective collective bargaining agreements and local
working-time directives.
S1-8 – Collective bargaining coverage and social dialogue
Distribution of employees covered by collective bargaining agreements and social dialogue
Collective bargaining coverage
Social dialogue
Coverage rate
Employees – EEA (for countries with >50
employees representing >10% total
employees)
Employees – Non-EEA (estimate for
regions with >50 employees representing
>10% total employees)
Workplace representation (EEA only) (for
countries with >50 employees
representing >10% total employees)
0-19%
–
–
–
20-39%
–
–
–
40-59%
–
–
–
60-79%
–
–
–
80-100%
Spain
United Kingdom
Spain
Description
Collective bargaining can cover a wide array of issues pertaining to working conditions, including remuneration, working time,
benefits and occupational safety and health. The coverage rate shown here refers to the proportion of employees who are covered
by one or more collective agreements. It is calculated using headcount at the end of the reporting period.
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298
Commentary
85% of our employees are covered by collective bargaining agreements, including 88% of employees in the UK, 95% of employees
in Spain and 81% of employees in Ireland. Collective bargaining coverage rates have remained relatively stable in these core markets.
In 2017, IAG and employee representatives signed an EWC agreement, governed by Spanish law. The purpose of the EWC is
to facilitate dialogue between employees and management on transnational European matters.
S1-9 – Diversity metrics
Total number and distribution of senior leaders by gender
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Men
5 %
150
143
– pts
64 %
64 %
Women
4 %
85
82
– pts
36 %
36 %
Total
4 %
235
225
– pts
100 %
100 %
Total number and distribution of IAG Management Committee and direct reports by gender
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Men
19 %
63
53
3 pts
73 %
70 %
Women
– %
23
23
(3) pts
27 %
30 %
Total
13 %
86
76
– pts
100 %
100 %
Description
We define senior leaders as IAG grades 0, 1 and 2 or equivalent across the Group, including senior executives (direct reports to
IAG's CEO). We also track the total number and distribution by gender for our IAG Management Committee members and their
direct reports. All numbers are as at 31 December 2024.
Commentary
Senior leader numbers at IAG grades 0-2 have remained stable in 2024, with balanced growth rates for both men and women,
accounting for attrition and new hires. IAG remains committed to our gender diversity ambition of 40% women in senior roles by
2025, having seen an increase of 6% since 2020. We continue to take an open approach to vacancies, enabling applications from
across IAG and externally, and using each opportunity to attract diverse talent.
In 2024, there was a slight reduction in representation of women in the IAG Management Committee and their direct reports.
The numbers reflect diversity at a specific point in time, and each year we experience approximately 20% change in the composition
of our senior leadership roles through promotions, role changes and new hires.
Total number and distribution of employees by age
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Under 30
5 %
15,310
14,560
1 pt
21 %
20 %
30–50
2 %
35,375
34,735
– pt
48 %
48 %
Over 50
5 %
23,693
22,493
1 pt
32 %
31 %
Total
4 %
74,378
71,7941
– pts
100 %
100 %
Description
The share of headcount across the Group by age (under 30, 30-50 and over 50) on 31 December 2024.
Commentary
The workforce distribution by age group remained broadly consistent in 2024. There was a small increase in under 30 and over
50 populations, largely driven by the restructuring of ground handling in Spain.
S1-10 – Adequate wages
At IAG, we are committed to ensuring that all our employees receive an adequate wage in line with applicable regulations, with over
85% of colleagues covered by collective agreements that ensure pay rates are competitive and sustainable. Remuneration includes
both fixed and variable elements, as is common in our sector, and reflects the dynamic and varied working patterns on the ground
and in the air. Colleagues are also eligible for a range of attractive benefits making calculations of remuneration understandably
complex. Operating companies have controls in place to consolidate and review all elements of remuneration in the context of the
Minimum Wage legislation and take appropriate action as necessary.
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299
1 Six employees are omitted due to missing date-of-birth information
S1-12 – Persons with disabilities
Total number and distribution of employees with a disability, by gender
Headcount
Headcount (%)
Metric
vly
2024
2023
vly
2024
2023
Men
1 %
522
518
(0.04) pts
1.26 %
1.30 %
Women
1 %
398
396
(0.04) pts
1.21 %
1.25 %
Total
1 %
920
914
(0.03) pts
1.24 %
1.27 %
Description
Employees with disabilities as a percentage of headcount at the end of the year. Collecting disability information on employees is
not a legal requirement in the UK or Ireland, unlike in Spain. Disabilities within scope are those which are medically certified in Spain
but self-declared in all other jurisdictions.
Commentary
The percentage of employees with a disability remained relatively consistent in 2024. The majority are either based in the UK
or have a declared medically diagnosed disability in Spain.
S1-14 – Health and safety metrics
All employees across IAG are covered by comprehensive health and safety management systems, ensuring their wellbeing and
compliance with legal requirements and recognised standards.
Workplace fatalities
Number of instances
Metric
2024
2023
Cabin crew
–
–
Pilots
–
–
Airport operations
–
–
Corporate functions
1
–
Maintenance
–
–
Total
1
–
Lost time injuries (LTI)
Workplace accidents
LTI severity rate
LTI frequency rate
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
Airport operations
12 %
902
805
8 %
31.2
28.9
5 %
7.0
6.7
Cabin crew
17 %
894
763
(9) %
10.9
12.0
17 %
6.1
5.3
Corporate functions
60 %
141
88
9 %
14.7
13.5
44 %
1.0
0.7
Maintenance
(20) %
100
125
(17) %
19.5
23.6
(26) %
1.7
2.3
Pilots
4 %
76
73
(51) %
8.2
16.6
2 %
1.3
1.3
Total
14 %
2,113
1,854
(1) %
20.1
20.4
8 %
4.0
3.7
Workplace accidents
LTI severity rate
LTI frequency rate
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
Men
7 %
1,108
1,035
– %
23.1
23.1
1 %
3.5
3.5
Women
23 %
1,005
819
(1) %
16.8
17.0
16 %
4.6
4.0
Total
14 %
2,113
1,854
(1) %
20.1
20.4
8 %
4.0
3.7
Occupational illness
Number of instances
Metric
vly
2024
2023
Men
375 %
19
4
Women
(29) %
5
7
Total
118 %
24
11
Absenteeism
Hours absent
Absenteeism rate
Metric
vly
2024
2023
vly
2024
2023
Airport operations
17 %
2,466,647
2,110,641
1.5 pts
9.7 %
8.2 %
Cabin crew
2 %
2,084,521
2,044,707
(0.2) pts
6.5 %
6.7 %
Corporate functions
18 %
820,652
696,983
0.2 pts
2.9 %
2.7 %
Maintenance
6 %
558,418
528,581
(0.1) pts
4.4 %
4.5 %
Pilots
– %
617,843
618,387
(0.2) pts
5.0 %
5.2 %
Total
9 %
6,548,081
5,999,299
0.2 pts
5.9 %
5.7 %
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There was one recorded fatality in 2024, related to a road traffic incident in Spain during a commute to work. Under Spanish law,
accidents that occur while travelling to or from the workplace are considered workplace accidents.
In 2024, there were 8,196 workplace accidents (a rate of 77 workplace accidents per one million hours worked). This includes
2,113 workplace accidents that resulted in lost working time.
The lost-time injury (LTI) frequency rate increased from 3.7 in 2023 to 4.0 in 2024, including a 17% increase amongst cabin crew.
This increase is due to a stronger focus on reporting culture and greater use of health and safety management systems, especially
for ‘in the air’ incidents. While the LTI frequency has increased, LTI severity has decreased. This means that although there were
more incidents, their impact in terms of time off work was less severe. The increase in LTI frequency is higher amongst women,
reflecting the workforce distribution of cabin crew. The 44% increase in the LTI frequency rate amongst corporate employees
is skewed by low numbers and remains the lowest area for LTIs, with a frequency rate of just 1.0.
Occupational illnesses increased in 2024. However, the majority of these cases involved injuries or diseases that did not result
in disabling effects for the individuals affected. The overall numbers remain below historic norms.
Absenteeism increased slightly in 2024 compared to 2023, driven mostly by airport operations. Our focus remains on creating
a supportive work environment that promotes attendance and productivity while ensuring the health and safety of all employees.
Cabin crew may have higher absence reporting rates due to the requirements of their role regarding fitness to operate.
Description and methodology
Metric
Description
Formula for calculation
LTI severity rate
This measures the impact of occupational accidents as reflected in time off work
by the affected workers.
(Working days lost)/(Number
of LTIs)
LTI frequency
rate
An LTI is a non-fatal injury arising out of, or during work, which leads to
a loss of productive work time.
The unit of measurement is LTI’s per 200,000 hours worked, using actual
hours worked.
((Number of LTIs)/(Hours
worked )) x 200,000
Hours absent
For the purpose of this metric, only unplanned or unauthorised absences –
which means employees missing partial or whole days of work – are included.
Examples in scope are short-term and long-term sickness, time off due to
injuries, and no-shows, absences without leave or permission.
Sum (hours absent)
Absenteeism
rate
The absenteeism rate is calculated as total employee absences divided by
total scheduled hours in the reporting period, expressed as a percentage.
In general, most Group companies record absence in hours. Where days
are recorded (mostly in Pilots and Cabin Crew category), days are converted
to hours at a rate of 7.5 hours per day (Group average full day).
(Number of hours absent)/
(Number of hours scheduled)
Occupational
illness
An occupational illness is a medical condition or disease that develops
gradually over time as a result of work performed and/or exposure to risk
factors in the workplace. The illness must be confirmed by a medical diagnosis.
Occupational illnesses in scope for the UK follow Reporting of Injuries,
Diseases and Dangerous Occurrences Regulations (RIDDOR) standards
and can be found on the Health and Safety Executive’s (HSE) website.
Occupational illnesses in scope for Spain are published in Royal Decree 1299/2006.
Number of occupational
illnesses medically diagnosed
Fatalities
Work-related fatalities linked to an occupational illness or disease.
To align with GRI guidance, fatalities as a result of commuting accidents are only
included in cases where the transport has been organised by the business, such
as via a company or contracted bus or vehicle. The exception is employees
in Spain, where inclusion of these types of fatalities is a legal requirement.
Number of work-related fatalities
S1-16 – Remuneration metrics (pay gap and total remuneration)
Average remuneration by gender, age and job category – salary gap
Overall
Men
Women
Salary gap
Category
vly
2024
2023
2022
vly
2024
2023
2022
vly
2024
2023
2022
vly
2024
2023
2022
Seniority
Senior executives
5 % 336,912 320,673 302,680
2 % 360,892 355,000 312,718
2 % 306,466 300,428 287,080
(0.3) pts
15.1 %
15.4 %
8.2 %
Other
management
1 % 236,986 235,208 230,720
6 % 268,092 252,103 252,394
(2) % 121,365 123,466 124,979
3.7 pts 54.7 %
51.0 %
50.5 %
All other
employees
6 % 56,639 53,310 51,944
6 % 56,512 53,344 53,465
7 % 56,813 53,269 50,327
(0.7) pts
(0.5) %
0.1 %
5.9 %
Total workforce
6 % 59,863 56,703 55,701
3 % 61,394 59,419 59,344
7 % 58,242 54,428 51,600
(3.3) pts
5.1 %
8.4 %
13.0 %
Age group
<30
9 % 42,985 39,547 41,485
10 % 41,790 37,911 41,530
8 %
44,119 40,945 41,465
2.4 pts
(5.6) %
(8.0) %
0.2 %
30–50
4 % 59,593 57,495 56,688
2 % 61,756 60,571 60,248
6 % 57,508 54,481 53,345
(3.2) pts
6.9 %
10.1 %
11.5 %
>50
1 % 69,777 68,770 67,447
– % 72,015 71,675 72,584
2 % 67,840 66,271 62,636
(1.7) pts
5.8 %
7.5 %
13.7 %
Total workforce
6 % 59,863 56,703 55,701
3 % 61,394 59,419 59,344
7 % 58,242 54,428 51,600
(3.3) pts
5.1 %
8.4 %
13.0 %
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The difference between the gender pay gap and pay equity
The gender pay gap is a measure based on average pay across
an organisation. It does not account for the different roles that
people occupy.
Pay equity is the principle that people doing the same work
should receive the same pay, allowing for legitimate differences
such as tenure, performance and experience.
It is possible for an organisation that pays its employees fairly
and equitably in different roles to still have a gender pay gap.
The existence of a gender pay gap does not necessarily
indicate a problem with pay equity.
IAG has strong pay equity principles in place, ensuring that our
male and female employees are paid equitably for the work they
do, based on experience, performance, and other relevant factors.
Description
Remuneration data is presented at the median for gender, age
and seniority population groupings. The reported components
of remuneration continue to include basic salary, shift pay,
allowances, employer pension contributions, taxable benefits
and annual incentives, providing a clear view of overall
total remuneration.
During 2024, the presentation of remuneration values and
the population included continued unchanged, as follows:
• All values are calculated on an hourly rate and shown on
an annualised basis;
• All values are shown on a full-time-equivalent basis;
• Values are only reported for time worked. Remuneration
received for not working is excluded from reported values;
• To ensure consistency, 2022 and 2023 non-euro
remuneration has been restated using 2024 exchange rates;
• The reported salary gap for each population continues to
represent the difference between men’s and women’s median
remuneration, expressed as a percentage of men’s
remuneration; and
• Regarding seniority population groupings, ‘Senior executives’
includes Group Management Committee members, operating
company management committee members, directors and
other senior/executive positions. ‘Other management’
includes all other management roles, including pilots at the
captain seniority level. The ‘All other employees’ grouping
includes all other roles across the group, including the
majority of pilots and cabin crew.
Commentary
Within IAG’s operating model, operating companies are
responsible for reward frameworks and terms and conditions,
aligned to local markets and roles to ensure they remain
sustainable and competitive in attracting the best talent. The
majority (85%) of employees are covered by collective
bargaining agreements. Senior leader remuneration balances
fixed pay with variable pay and long-term incentives to align
leadership compensation with performance and achievement of
long-term strategic goals. Senior leader remuneration decisions
take into account performance, market competitiveness and
broader workforce experience.
Salary gap analysis
In 2024, as the Group continued to expand its workforce,
particularly in customer service, airport supervisory and other
corporate roles, the composition of the workforce evolved,
resulting in changes to the median pay point for both men
and women compared to 2023.
The result is that at Group level, there has been a year-on-year
reduction in the median salary gap from 8.4% in 2023 to 5.1%
in 2024, and from 32.6% to 26.6% for the mean salary gap.
Pilot pay remains the most significant driver of the gender
pay gap, reflecting both the lower numbers of female pilots
and the impact of seniority. The gender pay gap in the ‘other
management’ category is driven by the inclusion of pilots at the
captain seniority level within that group. Each airline is working
to increase the diversity of its pilot populations through talent
attraction and recruitment practices, as well as school
engagement and outreach programmes. In 2024, over 230
cadet pilot training positions were opened across Aer Lingus,
British Airways and Iberia. All provide financial support,
removing barriers to entry and making the opportunity
to become a pilot more accessible.
In 2022, we set a Group-wide ambition for 40% of our senior
leadership roles to be held by women by 2025. The gender
diversity of our senior leadership is at 36%, a 6% increase since
2020. We remain committed to achieving our 40% ambition.
Operating companies and businesses review people processes
to ensure they are inclusive and free from bias. Recruitment
and selection decisions are open, transparent and fair, seeking
applications from underrepresented groups.
Further details on the steps that IAG is taking to promote diversity
and inclusion across the Group are set out in the Equity,
Diversity and Inclusion section of this Sustainability statement.
Board and Management Committee remuneration
Description:
Average remuneration of Board members and Management Committee, including variable remuneration, allowances, professional
indemnity, contributions to pension and welfare systems and any other aspects of the remuneration, broken down by gender.
vly
2024
2023
2022
2021
2020
2019
Board
Men
12 %
745,467
668,333
836,667
510,167
407,326
638,010
Women
7 %
151,000
141,400
138,000
114,600
109,798
133,799
Management Committee
Overall
16 %
1,677,819
1,451,375
1,523,328
1,287,780
653,403
1,012,671
Description
• The components of remuneration include:
• Executive directors: Basic salary, taxable benefits
(company car and private health insurance), employer
pension contributions, annual incentives paid in the
reporting period and long-term incentives vesting in the
reporting period, and personal accident and life insurance.
• Non-executive directors: All fees (Board, Chair, committee
membership, etc) and (taxable) personal travel benefits.
• Using the methodology established in 2020, only directors
or Management Committee members who were in service for
the full year reporting period are included in the year-on-year
comparison.
• As per previous years, the remuneration of the IAG CEO
is omitted from Management Committee remuneration
reporting on the basis it is already reported as part of Board
director remuneration.
• These figures are derived from the methodology used
in the Remuneration Report filed with the Spanish National
Securities Market Commission (CNMV).
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Explanation for Board remuneration
The higher level of average remuneration paid to male directors
compared to female directors is a direct consequence of male
incumbents holding the higher remunerated CEO and Chairman
roles. Where male and female non-executive directors perform
the same responsibilities, the level of remuneration paid is
equivalent in line with the Group’s standardised non-executive
director fee framework.
In 2024 and 2023 the remuneration of 10 non-executive
directors and the IAG CEO is included, with the same split
of six male and five female.
The key factors influencing the increased remuneration for
directors, are:
• The increase in IAG CEO remuneration from 2023 to 2024,
driven by following factors:
• The exercise of nil-cost options from historical 2015, 2016
and 2017 Performance Share Plan awards; and
• Payment of approved 2024 annual incentive award.
• Non-executive directors fees remained unchanged in 2024.
However, the additional fee for chairing a Board Committee
increased from 1 January 2024 for the Chairs of the Audit and
Compliance Committee and the Remuneration Committee.
• There was an increase in the take-up of personal flight benefits.
• More generally, female director remuneration is less volatile
as there are no female executive directors.
Further detail of Board remuneration is set out in the ‘Director’s
Remuneration report’ within this Annual Report.
Explanation for Management Committee remuneration
Both the components of remuneration and the opportunity
associated with those components for Management Committee
members remained unchanged from 2023 to 2024. The increase
in average Management Committee member remuneration in
2024 was driven by factors such as:
• Changes in Management Committee membership between
2023 and 2024: In 2024, there were 10 Management
Committee members, seven male and three female. For
comparison, last year’s data set comprised nine Management
Committee members, six male and three female. No gender
breakout is shown for confidentiality reasons, given the
female data set relates to only three employees.
• The release from the holding period of historical 2019
share awards;
• Payment of the approved 2024 Annual Incentive Award; and
• The vesting in 2024 of the first award resulting from the
change in long-term incentive approach to a Restricted
Share Plan (RSP).
The IAG Remuneration Committee’s terms of reference state
that the Committee oversees the general application of the
Remuneration Policy for the Management Committee.
Annual total remuneration ratio
The annual total remuneration ratio compares the highest-paid
individual’s total annual remuneration to the median total
annual remuneration for all employees (excluding the highest-
paid individual). The following table sets out IAG’s CEO pay
ratio figures for 2024:
Year
CEO single figure (€'000)
Median pay ratio
2024
5,512
92:1
The information in this table follows the Corporate Sustainability
Reporting Directive (CSRD) methodology. The CEO pay
ratio shown in the Remuneration Report within the Corporate
Governance section reflects the UK methodology.
S1-17 – Incidents, complaints and severe human
rights impacts
Discrimination and human rights
At IAG, we are committed to promoting a discrimination-free
work environment where all individuals are treated with dignity
and respect, regardless of age, sex, disability, race, religion/
belief, marital/civil partnership status, pregnancy and maternity,
sexual orientation, gender or any other protected
characteristics. Our core principles of fair and equal treatment,
non-discrimination and respect for human rights are central
to the IAG Code of Conduct, which applies to all employees
and directors across the Group.
We closely monitor incidents and take appropriate action. In
2024, there were 97 complaints of discrimination filed through
formal channels for people employed across the Group, that are
either under investigation or found to be unsubstantiated.
Additionally, there were 23 incidents of discrimination that were
found to be substantiated. Where applicable, we take
appropriate action to address issues identified, which may
include disciplinary action.
In 2024, we paid a total of £45,000 in fines, penalties, and/or
compensation related to incidents of discrimination. This amount
pertains to a settlement for an incident that occurred in a previous
reporting year. This year, we incurred no fines, penalties,
or compensation costs for incidents that took place in 2024.
There were no reported incidents of severe human rights
breaches connected with IAG’s own workforce, nor any
associated fines, penalties or compensation in 2024.
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303
Additional social disclosures required by Spanish Law 11/2018
Relevant standards: GRI-404-1
S1-13 – Training and skills development metrics
Training by gender
Training hours completed
% of employees trained
Average training hours
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
Men
22 % 1,968,547 1,616,617
(4) pts
90 %
94 %
37 %
53.8
39.3
Women
5 % 1,677,638 1,602,474
(1) pt
90 %
92 %
13 %
62.6
55.2
Total
13 % 3,646,185 3,219,091
(3) pts
90 %
93 %
26 %
57.5
45.8
Training by employee category
Training hours completed
% of employees trained
Average training hours
Metric
vly
2024
2023
vly
2024
2023
vly
2024
2023
Airport operations
(10) %
568,156 633,796
(13) pts
81 %
94 %
16 %
46.4
39.9
Cabin crew
– % 1,579,609 1,574,677
1 pt
94 %
93 %
4 %
76.4
73.2
Corporate functions
77 %
757,217
427,455
3 pts
94 %
90 %
93 %
48.7
25.2
Maintenance
31 %
371,101
284,176
2 pts
98 %
96 %
31 %
52.5
40.2
Pilots
24 % 370,102
298,987
– pts
97 %
98 %
38 %
46.9
33.9
Total
13 % 3,646,185 3,219,091
(3) pts
90 %
93 %
26 %
57.5
45.8
Description
All mandatory and non-mandatory training is in scope and covers an array of topics, such as human rights, anti-corruption, flight
simulators, and e-learning courses. The percentage of employees trained refers to the proportion of employees who completed
training within the reporting period. Average training hours are calculated based on the total training hours completed per average
headcount, pro-rated to full-time equivalent (FTE).
Commentary
In 2024, we saw a 13% overall increase in training hours completed, outpacing our overall headcount growth. The 3% reduction in the
percentage of employees trained is primarily due to high turnover and new joiners in airport operations. However, average training
hours have increased by 26%, particularly in corporate functions, including leadership development programmes.
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International Airlines Group | Annual Report and Accounts 2024
304
ESRS S2 Workers in the value chain
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
Topic
Name
Impact, risk or
opportunity
Description
Location
Business conduct
Ethical business and
regulatory
compliance
Protection of
whistleblowers
Without protection for whistleblowers, the likelihood that employees come
forward with reports of unethical or illegal behaviour is severely decreased.
This could lead to poorer detection of and reduced prevention of
corporate misconduct. This could lead to legal and reputational
consequences for suppliers and IAG.
Upstream and own
operations
Modern slavery and
human trafficking
Modern slavery and human
trafficking
Violating human rights, particularly through cases of human trafficking and
modern slavery, has profound and far-reaching effects on the individuals,
communities and society.
Upstream and own
operations
Responsible supply
chain
Assurance of ethical
practices of suppliers
External audits entail reviewing labour conditions and environmental
practices, among other things, which ensures that suppliers operate
ethically and responsibly. Failure to do so carries reputational risks to IAG.
Upstream
Unfavourable working
conditions in the supply
chain
The violation of the Third Party Code of Conduct regarding people and
workplace standards results in significant negative impacts. This includes
breaches in areas such as health, safety and security protocols and
employment practices. Unfavourable working conditions can reduce
productivity and negatively impact IAG’s goods and services. It also
presents a reputational risk to the Group.
Upstream
Disparities in treatment and
opportunities among
supplier workers
Disparities in treatment and opportunities among suppliers extend to
various dimensions, including gender, training and development, diversity,
and inclusion of persons with disabilities. This could negatively impact the
goods and services received by IAG.
Upstream
Violation of human rights
standards within supply
chains
The violation of human rights standards within supply chains refers to
instances where suppliers fail to uphold fundamental human rights
principles such as child or forced labour. This presents a reputational and
legal risk to IAG.
Upstream
Negative impact
Overview
The Stakeholder Engagement section of this Annual Report
and ‘SBM-2 Interests and the views of stakeholders’ section
of this Sustainability statement describe the steps IAG takes
to identify and manage material impacts relating to workers
in the value chain as presented in our double materiality
assessment. The majority of these impacts exist upstream of
IAG operations, in sectors as listed per the scope of our value
chain in section ‘BP-1 General basis for preparation of this
Sustainability statement’.
To address material issues in its supply chain, IAG implements
a proactive risk management approach, identifying high-risk
regions and industries where such impacts are more likely
to occur. From work completed by the IAG GBS Supply Chain
Sustainability Programme, more prevalent negative risks have
been identified in areas such as uniforms, catering, hotels
and onboard products. This information has guided IAG’s
engagement with these supplier categories to better
understand their labour and that of their supply chains.
The programme aims to deliver closer cooperation with these
key stakeholders to mitigate the material impacts identified,
and aims to identify opportunities which could deliver
reciprocal benefits for IAG, including long-term working
relationships, centred on clear and proactive contract
management, shared goals and mutual brand association.
IAG is also conducting a third-party review to improve our
analysis and assessment of supply chain labour standards.
Under the terms of reference for this review, we will aim
to deliver an overview of the sustainability risk domain and
activities regarding prospective suppliers, suitable means of
engaging suppliers such as questionnaire approaches, red-lines
and mitigation measures to ensure that IAG’s sustainability
commitments are not compromised, and identifying policies,
procedures and other methods for the operationalisation of
sustainability measures for current third parties. IAG is also
developing remediation guidelines for approval by the SECR
Committee in 2025 that capture current practices of IAG’s
procurement team if concerns are raised.
Unfavourable working conditions in the value chain
Our approach and policies
IAG places a strong emphasis on its position and
responsibilities to workers in the value and supply chain.
The IAG Third Party Code of Conduct requires suppliers
to apply ethical and legal standards to their employees and
subcontractors. IAG also requires a ‘sustainability clause’ in
its contracts with suppliers to ensure that the principles of the
Third Party Code of Conduct are adhered to by the supplier.
Actions, metrics and targets
IAG’s actions towards mitigating negative impacts of
unfavourable working conditions in the value chain include:
• IAG conducts supplier assessments, surveys and audits (e.g.
through working with SEDEX) focusing on worker conditions,
compliance with labour laws and human rights practices.
In 2024, IAG GBS obtained and analysed 109 ESG audits,
up from 38 audits obtained in 2023.
• IAG collaborates with third-party organisations specialising
in worker engagement and human rights including regulatory
authorities and charities.
• IAG is committed to providing accessible channels for
concerns to be raised and to ensuring remediation of any
negative impacts identified. The Group maintains a
whistleblowing mechanism.
• In 2024, IAG continues to strengthen its due diligence
practices, developing a targeted approach for suppliers
operating in high-risk areas/industries.
EcoVadis
IAG monitors and evaluates outcomes through KPIs, such
as the number of suppliers audited and number of EcoVadis
scorecards completed. Results are reviewed annually to refine
the Group’s strategy and ensure continuous improvement.
In 2024, IAG GBS’s focus was the quality of engagement with
key suppliers through obtaining EcoVadis scorecards covering
79% of IAG’s total spend. In 2025, IAG GBS will continue
engaging with suppliers based on their EcoVadis scores
to improve their sustainability performance.
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Through the EcoVadis platform, IAG works with suppliers
to investigate any reported issues and implement Corrective
Action Plans when necessary. In cases where violations of
human rights, such as forced labour or unsafe working
conditions, are identified, IAG collaborates with suppliers
to ensure these issues are resolved or, if necessary, terminates
the relationship with non-compliant parties.
Violation of human rights standards within supply chains
Our approach and policies
IAG recognises that failure to address human rights violations,
including modern slavery and human trafficking within
its supply chains, could lead to significant legal, social and
reputational consequences. Such violations directly impact
the victim and their families and could also result in financial
penalties, compliance challenges, social harm, business
interruptions and damage to IAG’s reputation.
The IAG Third Party Code of Conduct expressly prohibits the
use of child labour and any form of slave, bonded, forced or
involuntary prison labour, and human trafficking or exploitation.
IAG also implemented a stand-alone human rights policy in
2024, alongside the existing Code of Conduct and Third Party
Code of Conduct.
Modern slavery and human trafficking
Human trafficking is a particular risk in the aviation industry
and its value chains. We transport millions of passengers every
year and work closely with the authorities where any trafficking
on our flights is suspected.
IAG supports the 2018 IATA resolution denouncing human
trafficking and the ICAO Guidelines for Reporting Trafficking in
Persons by Flight and Cabin Crew, and has actively contributed
to the ICAO Ad Hoc Working Group on Combatting Trafficking
in Supply Chain (AHWG-TSP), an international, joint industry-
regulatory group providing advice to ICAO assisting in the
development of guidance material on combating trafficking
in persons in an air operator’s supply chain.
IAG will take swift and robust action if any evidence relating
to slavery or human trafficking in our business supply chain is
identified. Operating airlines train staff to recognise and respond
to the signs of potential human trafficking situations and
provide procedures for reporting where any cases are suspected.
In 2024, 26 suspected incidents of trafficking were reported by
our employees. All suspected incidents were reported to the
relevant authorities.
Actions, metrics and targets
IAG has developed several workstreams to improve the Group’s
understanding and identification of potential human rights
violations in the value chain, including actions to address the
potential impacts of modern slavery and human trafficking as
described above.
IAG updated its Modern Slavery and Human Trafficking Statement
and the Modern Slavery Registry in 2024. The IAG Group Slavery
and Human Trafficking Statement is available on the IAG
website and complies with section 54, part 5 of the UK Modern
Slavery Act 2015 and Section 11(4)(b)(ii) of the Fighting Against
Forced Labour and Child Labour in Supply Chains Act 2023.
IAG also provides training to its employees and high-risk
suppliers to help them recognise signs of human trafficking and
other human rights violations. The training includes guidelines
and reporting processes.
IAG will be issuing more corrective action plans for the 109
audit reports it has received in 2024 as necessary. IAG reviews
the methodology for obtaining and scheduling ESG audits
of its suppliers using country and category risks to improve
mapping of potentially high-risk suppliers in the value chain.
Disparities in the treatment of and opportunities for value
chain workers
Our approach and policies
IAG is committed to promoting fair treatment for all workers
in its supply chain. The Third Party Code of Conduct requires
suppliers to ensure non-discrimination, equal opportunities
and respect for diversity in their employment practices.
Suppliers must comply with all applicable labour laws and
regulations, including those related to wages, working hours
and fair treatment.
Actions, metrics and targets
For more information regarding our engagement with supply
chain stakeholders on the material impacts identified by IAG’s
double materiality assessment, please refer to the Stakeholder
engagement section of this Annual Report.
Metric
vly
2024
2023
Total number of suppliers
9 %
17,500
15,998
Supplier screened for sanctions and financial risks
9 %
17,500
15,998
Suppliers with additional compliance assessments
(42) %
232
400
Critical suppliers under regular financial risk monitoring
(37) %
12
19
Independent ESG audits received*
187 %
109
38
Total number of EcoVadis scorecards
5 %
597
568
*Independent ESG audits received in 2024 comprise of 56 audits received in 2024, 52 valid audits received from 2023, and 1
audit from 2022.
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ESRS S4 Consumers and end-users
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
Topic
Name
Impact, risk or
opportunity
Description
Location
Social external
Customer
experience
Connecting people,
businesses and countries
Fostering global interactions between people, businesses and countries
worldwide. By connecting diverse destinations across numerous
countries, passenger and cargo airlines contribute to economic growth,
cultural exchange and international cooperation.
Downstream
Enhanced customer
experience through new
products and investments
New products and services developments generate a positive impact
on customer experience leading to greater customer attraction and
satisfaction.
Downstream
Enhanced customer
experience through loyalty
programmes
Loyalty programmes enhance customer satisfaction by offering
personalised rewards and unique experiences, which in turn
strengthens their loyalty to the brand and fosters a more solid and
enduring relationship.
Downstream
Informed customer
decisions
Giving customers access to more information in a clearer way allows
them to make more confident decisions.
Downstream
Positive impact
Overview
IAG’s double materiality assessment focused on our customers,
including recreational and business passengers, corporate
customers, freight customers and customers who engage with
Group airlines through their loyalty programmes. All customers
who engage with IAG’s products and services are covered by
the positive impact materiality topics identified (outlined under
SBM-3 above). Refer to the Stakeholder Engagement and
Strategic section of this Annual Report for more details
regarding the engagement and initiatives employed to address
the material impacts identified relating to our customers.
Across the Group, initiatives to manage the material impacts
identified above are implemented and managed by the Group’s
operating companies for the benefit of their customers.
Initiatives which concern customer engagement on
environmental issues, including emission reductions, are
reported into the ISN, SSG and the SECR Committee as
required. The IAG CEO holds ultimate accountability for the
day-to-day operations of the Group, including our
transformation plan to deliver better customer experiences.
This includes a customer satisfaction-related management
incentive as set by the Board at the beginning of the year,
following a recommendation by the Remuneration Committee.
The KPI for this incentive is measured using the IAG NPS to
gauge the loyalty and experience of the Group’s customer
relationships. It is calculated based on survey responses to the
likelihood to recommend, by subtracting the percentage of
customers who are ‘Detractors’ from the percentage of
customers who are ‘Promoters’. The weighting of each airline in
the overall NPS score reflects the Group's areas of focus for
2024. Please refer to the report of the Remuneration
Committee for more information.
Approach and policies
Our customers are central to the success of IAG. Customers
choose us primarily for our extensive network and schedule
and because they trust our brands. We fly from Europe to five
continents. Through our wide range of partnerships, our
customers benefit from an even larger global network covering
most countries in the world.
Connecting people, businesses and countries
Reactivating our network has meant more opportunities for
people and businesses to connect. This is important for IAG’s
performance but also has a positive impact on the economies
in which we operate. Aviation boosts economies, supports jobs
and develops supply chains globally.
Informing customer decisions
We aim to provide unrivalled customer propositions and a
portfolio of world-class brands targeting specific demand
spaces and travel occasions. Delivering outstanding customer
experience at all levels of the business and all brands will give
us a leading market position.
To do this, giving customers access to more information in
a clearer way allows them to make more confident decisions.
Examples of this include providing customers with information
on our sustainability programme, and how Group airlines can
support customers on their journey.
By effectively communicating its efforts to reduce emissions,
IAG demonstrates its commitment to sustainability and
environmental responsibility to customers, which can help build
confidence among this stakeholder group to make more
informed and confident decisions.
Enhanced customer experience through new products
and investments
Investing in product enhancements to enrich the customer
experience aligns with the brand propositions of IAG airlines,
fostering greater customer attraction, satisfaction and loyalty
among passengers.
Group airlines tailor these enhancements to meet specific
customer needs. For example, Group airlines have catered
to specific dietary preferences such as vegan menus,
demonstrating our commitment to accommodating our
customer needs and preferences.
Enhanced customer experience through loyalty programmes
The Group’s airlines recognise our most loyal customers and
offer loyalty programmes to enable customers to earn rewards
on a broad range of items, when flying with our airlines and
partners. Doing so creates value for both IAG and our
customers and builds this relationship.
IAG Loyalty allows members of Avios-based loyalty programmes
to collect and redeem Avios. Members can unlock rewards
by redeeming Avios for flights, hotels, and additional products.
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Actions, metrics and targets
Actions taken (in addition to those provided in the Strategic
section of the Annual Report) include:
Connecting people, businesses and countries
In 2023 we commissioned a study with consultants PwC which
analysed IAG’s economic impact across the EU and UK for the
first time. It took 2019 as the reference period (the last full year
of flying before the pandemic). PwC found that IAG supports
more than 600,000 jobs in the region directly and indirectly,
contributing nearly €70 billion to the GDP of the EU and UK.
IAG also views work experience as a valuable way of
supporting local employment, by engaging young people with
IAG’s operating companies and platform businesses, building
their skills and preparing them for potential careers. Many
of our operating companies offer programmes and initiatives
which support this aim.
Informing customer decisions
IAG aims to provide clear communication on key sustainability
issues such as emissions reductions through the development
of emissions dashboards and the expansion of communication
channels. This includes publication of sustainability reports
at Group level and by some of our airlines. Group airlines also
provide customers with information on their websites to
support them during their journey, through services such
as British Airways’ ‘Customer Commitment’, Iberia’s service
commitment, Aer Lingus’ experience and support webpages,
Vueling’s ‘Helpful info’ and Level’s help centre webpage.
Through these channels, along with on-board magazines and
airport lounge information desks, Group airlines offer customers
the opportunity to learn more about our business and sustainability
programme. Group airlines also offer customers to help make
a difference by contributing towards climate projects including
carbon removals and SAF, and community projects.
IAG operating companies, such as British Airways Holidays,
are also setting targets to engage with their customers on
sustainability initiatives - including one million customers on
nature positive action by 2030, and providing guidance and
recommendations on how to travel and take a holiday with
lower negative impacts and higher positive impacts by 2025.
Using customer feedback
IAG airline customers are able to provide feedback and details
of complaints in multiple ways, including via IAG airlines’
websites, by mail, or by phoning customer contact centres.
The types of customer complaints received vary significantly,
but typically relate to delays and cancellations, baggage,
journey experience, bookings and reservations.
To handle customer complaints, IAG airlines have dedicated
customer relations teams who are specially trained to deliver
excellent customer service and resolve issues quickly and in
a satisfactory manner. Through their complaint systems,
IAG airlines actively track and monitor resolution of customer
complaints using metrics which include the time between a
complaint being received and the first communication provided
back to the customer, or the number of cases raised that have
been successfully closed.
All IAG airlines also provide facilities for customers to exercise
their rights to claim compensation under Regulation (EC) No.
261/2004 of the European Parliament and of the Council of 11
February 2004 establishing common rules on compensation
and assistance to passengers in the event of denied boarding
and of cancellation or long delay of flights. Customers are
additionally able to use the IAG airlines’ contact channels to
submit claims for financial compensation relating to baggage
incidents and other out–of–pocket expenses, which are
assessed and resolved by IAG’s customer relations teams.
Group airlines measure customer feedback using NPS and
CSAT scores to inform business priorities during the business-
planning stage and prioritise internal initiatives to drive
customer satisfaction improvements. The Net Promoter Score
(NPS) feedback helps guide business priorities during the
business planning stage; contact centre KPIs assess our
efficiency, effectiveness and quality of our customer
interactions. Customer Satisfaction (CSAT) engagement rates a
customers’ experience on key touchpoints in their customer
journey.
Metric
2024 target
2024
IAG NPS
28.6
22.6
Enhanced customer experience through new products
and investments
The Group’s operating companies continue to add new
products to enhance our customer experience. For example,
in 2024 British Airways Holidays engaged the group’s car rental
partner to progress transparent consumer communications
on electric vehicle and hybrid car rental product labels, and
separately introduced a new hotel search filter to enable
customers to find properties that are actively progressing
sustainability via industry recognised standards
Enhanced customer experience through loyalty programmes
In 2024, IAG Loyalty saw significant growth in customer
engagement with our programmes. Customers earned 24%
more Avios and redeemed 20% more than in 2023. We
introduced new collection partners, making it easier for
our members to earn Avios through everyday spending.
Customers can now spend their Avios to pay nearly 100%
of the value of British Airways flights, and can link their Iberia
Plus and Vueling Club accounts in a new digital wallet.
IAG Loyalty also launched our first British Airways long-haul
Avios-Only Flight and extended Avios-Only Flights to Iberia
Plus and AerClub members.
IAG Loyalty, in partnership with British Airways, is also engaging
customers on other material impacts relating to sustainability,
announcing on 30 December that as of April 2025, British
Airways Executive Club members will be able to earn up
to 1,000 Tier Points per year when they contribute to SAF.
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Governance
ESRS G1 Business conduct
SBM-3 Material impacts, risks and opportunities and their interaction with strategy and business model
Topic
Name
Impact, risk or
opportunity
Description
Location
Business conduct
Ethical business
and regulatory
compliance
Protection of whistleblowers
If whistleblowers are safeguarded from retaliation, employees are more likely to
come forward with reports of unethical or illegal behaviour, leading to the early
detection and prevention of corporate misconduct.
Upstream and
own operations
Responsible
supply chain
Assurance of ethical practices
of suppliers
External audits entail reviewing labour conditions and environmental practices,
which ensures that suppliers operate ethically and responsibly.
Upstream
Corporate
governance
Sustainability embedded into
overall business strategy
The integration of sustainability practices, targets and goals into the company's
overall business framework signals a commitment to long-term value creation
and responsible business practices, aligning governance structures with
sustainability goals.
Own operations
Provision of internal
sustainability governance bodies
The establishment of internal governance bodies within the company to oversee
and ensure compliance with regulatory requirements, positively impacts a
company by enhancing oversight, accountability and risk management related
to sustainability issues.
Own operations
Financial management incentives
linked to carbon efficiency
IAG aligns sustainability goals with financial management incentives, encouraging
innovation and investment in environmentally friendly practices.
Own operations
Positive impact
Negative impact
G1-1– Business conduct policies and corporate culture
At IAG our core principles include fair and equal treatment,
non-discrimination, fairness and respect for human rights.
These are central to our IAG Code of Conduct which applies to
all employees and directors across the Group. Employees have
access to comprehensive training and development opportunities,
ensuring they are well versed in essential topics such as the
Code of Conduct and compliance with competition laws.
Operating companies are responsible for their own
supplementary employee policies and procedures, including
appropriate reward frameworks aligned to local markets and
roles, so they remain competitive in attracting the best talent.
We have seen a wide selection of employee benefits and
recognition schemes introduced in the operating companies.
For senior leader remuneration across our operating
companies, we have deliberately focused on variable pay
and long-term incentives, aligning leadership compensation
with performance and long-term strategic goals to drive
performance. We have taken a restrained approach to executive
pay, remaining committed to fairness and competitiveness.
Our operating companies have focused on securing collective
bargaining agreements with unions to ensure fair, competitive
and sustainable pay – providing stability for our business and
colleagues in challenging times. These arrangements are in
place for 85% of the workforce.
IAG complies with International Labour Organization (ILO)
conventions. These conventions cover fundamental principles
and rights at work: freedom of association, the effective
recognition of the right to collective bargaining, the elimination
of all forms of forced or compulsory labour and the elimination
of discrimination in respect of employment and occupation.
IAG operating companies have effective dialogue through
employee forums and through trade unions where they are
recognised. In addition, the IAG European Works Council
(EWC) facilitates communication and consultation between
employees and management on transnational European
matters. The EWC includes representatives from the different
EEA countries. It meets regularly throughout the year.
Each operating company continues to focus on engagement,
listening to and acting on colleague feedback. In addition to
specific initiatives to measure employee satisfaction, IAG runs
a twice-yearly OHI survey to track our transformation and
culture development, and to benchmark management practices
and leaders against a global external framework. Alongside
leadership support, each operating company has established
teams to identify themes and incorporate these into broader
people plans.
Finally, Board members carry out workforce engagement visits
with colleagues across our operating companies – meeting a
variety of employees and leaders in their work context to better
understand the challenges and opportunities of the different
businesses, employee issues and levels of engagement. This
provides the Board with a balanced perspective of stakeholder
views and supports broader decision-making.
Training and development
Each operating company is responsible for learning, development
and talent management within its business and for ensuring
its workforce has the necessary skills to support its strategy.
While training policies and programmes are implemented at the
operating company and functional levels, all our businesses are
required to run mandatory corporate training courses on topics
such as the Code of Conduct, compliance with competition
laws, anti-bribery and corruption compliance, and data privacy,
security and protection.
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G
Whistleblowing policy
IAG has in place a Group-wide whistleblowing policy and a
consolidated whistleblowing channel provided by an independent
third-party provider, where concerns can be raised on an
anonymous and confidential basis. This channel is available to
members of staff as well as suppliers, with information on how
to access it published in IAG’s Code of Conduct and Third Party
Code of Conduct. If any employee has a concern about unethical
behaviour or organisational integrity, they are encouraged to first
speak with their manager or a member of the Legal, Compliance
or Human Resource teams. Similarly, suppliers are encouraged
to contact their primary contact within the business. Regardless,
the whistleblowing channel is available for anyone who wishes
to report a concern.
IAG does not tolerate any retaliation against individuals using
the whistleblowing channel or contributing to investigations
arising from reports to the whistleblowing channel or any other
official complaint. Whistleblowing reports received for each
operating company are triaged by the Compliance teams to
direct them to the most appropriate area for investigation,
maintaining independence in this investigation process.
The Code of Conduct and ‘Speak Up’ policy explicitly outline
protections for whistleblowers, to ensure that individuals who
report concerns in good faith are protected from retaliation.
The IAG Audit and Compliance Committee reviews the
effectiveness of the external whistleblowing channel and
internal relevant reporting channels on an annual basis.
This annual review considers: the volume of reports by
category; timeliness of follow-up; process and responsibility
for follow-up; emerging themes and lessons; and any issues
raised of significance to the financial statements or reputation
of the Group or other areas of compliance.
During 2024, IAG received 399 reports through its ‘Speak Up’
platform. Each report was carefully assessed, and all relevant
cases were investigated independently under the supervision
of the Compliance Officers of each operating company, in line
with IAG ‘Speak Up’ procedures.
vly
2024
2023
2022
2021
2020
‘Speak up’ (whistleblower) reports
23 %
399
324
252
164
193
Refer to sections ‘ESRS S1 - Own Workforce’ and ‘ESRS S2 - Workers in the Value Chain’ of this Sustainability statement for more
information regarding the IAG Code of Conduct and ‘Speak Up’ policies.
G1-2 – Management of relationships with suppliers
Relevant standards: GRI 308-2, GRI 414-2.
Approach and policies .
The IAG GBS Group Procurement team leads IAG’s Supply
Chain Sustainability Programme by delivering in four key areas:
• Sharing the Third Party Code of Conduct (TPCoC) with suppliers;
• Facilitating independent risk screening and sustainability
assessments;
• Coordinating corporate social responsibility audits; and
• Embedding sustainability as standard in the procurement
process.
IAG GBS implemented a Sustainability committee in 2024
with representation by IAG GBS Sustainability, IAG GBS
Procurement, IAG Sustainability and IAG Legal. The committee
develops the objectives related to the key areas above and
monitors progress through reporting on relevant KPIs as listed
in section ESRS S2 - Workers in the Value Chain of this
Sustainability statement.
Updates on the programme are fed into the IAG Sustainability
Network (ISN), Sustainability Steering Group (SSG) and Safety,
Environmental and Corporate Responsibility (SECR) Committee
as required.
All suppliers also undergo annual compliance screening for
any legal and financial risks. The Group Procurement and
Compliance teams assess any suppliers identified as having
potentially higher levels of risk and implement mitigation plans
where necessary. Any issues are flagged to the risk owners
within the Group to jointly take appropriate action.
IAG GBS has verified the existing, active supplier base and
IAG's airlines’ interline relationships in Russia and Belarus in
order to determine the potential implications of, and actions
to be taken, due to the trade sanctions issued as a response to
the war in Ukraine. IAG has provided operating companies with
support on mitigation actions to be taken (e.g. payment stop/
blockage). This has been performed in coordination with the
Compliance teams.
Actions, metrics and targets
The Third Party Code of Conduct continues to be shared
with new suppliers as part of the on-boarding process.
New suppliers are requested to acknowledge their commitment
to achieving net zero emissions by 2050, and the need for a
roadmap, supported by deliverable plans, to achieve this target.
IAG GBS is also partnering with EcoVadis, a provider of
business sustainability ratings, to assess supplier scorecards
with a methodology that covers environment, labour and
human rights, ethics and sustainable procurement. This gives
IAG and its suppliers a baseline for improvements, and suppliers
can share their scorecards with customers and other
stakeholders, which benefits wider industry sustainability.
Once a scorecard is shared with IAG GBS, results are reviewed
to ensure the supplier’s sustainability performance is aligned
with IAG’s vision and strategy. If a supplier's performance score
is assessed as less than 45 (out of 100), a corrective action
plan (CAP) is requested for improvement.
In 2024, IAG GBS has continued to work to have supplier EcoVadis
scorecards in place covering 79% of IAG’s total spend.
IAG became a SEDEX member in 2023. SEDEX provides data
insights to help companies improve ESG performance. As part
of the TPCoC adherence, suppliers are subject to analysis
under a labour and human rights protocol such as the SEDEX
Members Ethical Trade Audit (SMETA) methodology. IAG aims
to understand information about the ethical practices of its
suppliers, including audits.
IAG GBS has embedded sustainability aspects into the day-to-day
operation of the organisation and includes sustainability targets
in the performance objectives of all IAG GBS employees.
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G1-3 – Prevention and detection of corruption and bribery
Our approach and policies
IAG and its operating companies do not tolerate any form
of bribery or corruption. This is made clear in the Group Code
of Conduct and supporting policies which are available to
all employees and directors. An anti-bribery policy statement
is also set out in the Third Party Code of Conduct.
IAG has in place a Group-wide anti-bribery and corruption
policy. This document sets out the minimum standards that are
expected by the Group, its directors and employees, including
definitions and guidance for bribery, gifts and hospitality
guidance, political and charitable donations, public officials,
facilitation payments among other things.
Each Group operating company has a compliance officer,
responsible for managing the anti-bribery programme in its
business. The compliance teams from across the Group
meet regularly through working groups and steering groups,
under the coordination of IAG’s Group Head of Ethics and
Compliance. They conduct an annual review of bribery risks
at operating company and Group level.
Actions, metrics and targets
The main compliance risks identified for 2024 were unchanged
from the previous year and relate to the use of third parties,
operational and commercial decisions involving government
agencies and the inappropriate use of gifts and hospitality.
No material compliance breaches were identified in 2024,
as in 2023. Anti-bribery and corruption training is mandatory
for all relevant personnel in IAG operating companies and
Group functions. Individual training requirements are set by
each operating company and function and are determined
by factors such as the level and responsibilities of an employee.
A Group-wide anti-bribery e-learning module was rolled out
in 2019 and is required to be completed every three years.
To identify, manage and mitigate potential bribery and
corruption risks, IAG uses risk-based third-party due diligence
which includes screenings, external reports, interviews and site
visits depending on the level of risk that a third party presents.
Any risks identified during the due diligence process are
analysed and a mitigation plan is put in place as necessary.
Certain risks could result in termination of the proposed or
existing relationship with the counterparty. The IAG Audit
and Compliance Committee receives an annual update on the
anti-bribery compliance programme.
IAG has processes and procedures in place across the Group,
such as supplier vetting and management, Know Your
Counterparty procedures and financial policies and controls,
which help to combat money laundering and other compliance
risks across the business.
Metric
Unit
2024
Number of employees who completed the
annual Code of Conduct training
#
56,495
Number of employees who completed the
annual anti-bribery training*
#
12,088
*denotes total training completed over a period of 3 years
G1-4 – Incidents of corruption or bribery
There were no legal cases regarding corruption brought against
the Group and its operating companies in 2024, as in 2023,
and management is not aware of any impending cases or
underlying issues.
G1-5 – Political influence and lobbying activities
The aviation industry will reduce its lifecycle carbon emissions
faster with stakeholder and policy support. The Group and
its operating airlines regularly engage with key stakeholders,
including governments and regulators, shareholders, lenders
and other financial stakeholders, trade associations, customers,
suppliers, employees, communities, NGOs and academic
institutions. We advocate for support for emissions reductions
and to share progress on our Flightpath net zero strategy.
Internal governance ensures that wider stakeholder engagement
on climate change is consistent with addressing our material
issues and environmental goals.
Key stances on climate change
IAG supports cost-effective approaches to deliver net zero
emissions by 2050, advance low-carbon solutions, and support
global efforts to align with the 1.5°C ambition.
Actions taken by IAG within associations focused on UK aviation,
Spanish aviation and global aviation policy are listed in the table
below. If the climate-related positions of trade associations are
deemed to be substantially weaker than or inconsistent with
IAG’s internal stances, IAG representatives take roles on task
forces and working groups and respond to consultations to
communicate our position and constructively move to alignment.
IAG is proud to have views on climate change that are
consistent with all the organisations of which it is a member
(see below). IAG has positively influenced this outcome by
contributing expertise and time to drive net zero commitments,
and create and support roadmaps to net zero emissions across
organisations such as SA, A4E, oneworld, and ATAG. IAG has
also driven and encouraged higher SAF ambitions across JZT,
oneworld and WEF. IAG and key trade associations are listed
on the EU Transparency Register.
Key principles of climate-related engagement
Aviation is a global industry and IAG remains committed to
global policy approaches. IAG supports carbon pricing as
a key instrument to determine both the pace of emissions
reductions for the aviation industry and the balance of in-sector
and out-of-sector reductions. We advocate for the use
of greenhouse gas emission removal technologies in carbon
markets, by both natural and engineered means. By 2050
we are committed to using only greenhouse gas removals
to cover our carbon emissions.
IAG also prioritises policy advocacy on SAF, as this will be
a key lifecycle emissions reduction driver in the next decade,
and supports policies on operational efficiency, carbon offsets
and removals.
The Group seeks to ensure that policies delivered are effective
and fair across multiple airlines.
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311
Member of organisation
IAG involvement in organisation and actions to ensure, or move to, consistent stances
Global focus
Coalition for Negative Emissions
Founding member in 2020. Steering Group member and active contributor to consultation
responses to UK Government on how to scale up carbon removals
oneworld (represents 15 airlines)
Chaired the Environment Strategy Board (ESB), coordinated net zero roadmap and 10% SAF
ambition across 2020-2021, hosted two ESB meetings in London in 2023, and continues to
provide support for advancing low carbon solutions
Air Transport Action Group
(ATAG)
Significant airline contributor to global aviation roadmap to net zero in 2020-2021, which
helped to inform industry priorities for continual advancement of low carbon solutions
World Economic Forum (WEF) –
Clean Skies for Tomorrow Coalition
Regular contributor to reports on how to scale up SAF as a low-carbon solution; advocated
for 10% SAF ambition by 2030
IATA (represents 300 airlines
worldwide)
Chaired the IATA Sustainability and Environment Advisory Council (SEAC). The IAG Head of
Sustainability represents IAG at the IATA working groups to advance policies for low-carbon
solutions. Supported advocacy for net zero commitment at ICAO and strengthening of CORSIA
baseline in 2021. Moderated a panel at the inaugural IATA World Sustainability Symposium in
Madrid in October 2023
Sustainable Markets Initiative
(SMI)
In February 2024 IAG CEO Luis Gallego was appointed the chair of the Sustainable Markets
Initiative’s (SMI) Aviation Industry Task Force. The SMI Aviation Task Force is delivering work to
accelerate the use of SAF by 2030, alongside supporting workstreams that will develop the use
of transformative technology and fuels and improve contrail management
Spain/Europe focus
Grupo Español para el
Crecimiento Verde
(Spanish Group for Green
Growth)
Formed in 2023. Iberia is one of over 50 corporate members supporting green growth
Alianza para la Sostenibilidad del
Transporte Aéreo en España
(AST)
(Spanish Alliance for Sustainable
Air Transport)
This group brings together the main stakeholders of the Spanish air transport sector with the
objective of promoting the development of sustainable aviation. Three working groups have
been established to respond to the main challenges that the sector now faces: operational
efficiency, SAF and policy
Airlines 4 Europe (A4E)
Founding member. Drove development of net zero roadmap in 2021 and supported ReFuelEU
consultation responses and other work to advance low-carbon solutions
In 2023, IAG has supported the update of the A4E decarbonisation roadmap and participated
in working groups looking to develop solutions for non-CO2 emissions
UK focus
Sustainable Aviation (SA)
One of 13 members of SA Council, which governs activities for 44 members
Drove development of SA’s net zero roadmap in 2023, which for the first time included the
demand impact of a net zero transition. IAG was also an active participant in workstreams
to advance low-carbon solutions
Jet Zero Taskforce (JZT)
Chairs SAF Delivery Group and supported creation of UK Jet Zero Strategy in 2022 to deliver
net zero UK aviation by 2050. British Airways CEO is a member
Royal Aeronautical Society
(RAeS) – Greener by Design
group (GbD)
Member of the Executive Committee of GbD, attended non-CO2 conferences in 2022 and 2023
to understand how best to mitigate these effects
Member of organisation
IAG involvement in organisation and actions to ensure, or move to, consistent stances
G1-6 - Payment practices
IAG’s standard payment terms with suppliers are payment
within net 30 days of receipt of the invoice meeting the
requirements of applicable legislation. In 2024, the average
time to pay invoices from the date of the invoice was 27
days. The percentage of payments aligned with standard
payment terms was 89%. There are no legal proceedings
concerning late payments due to suppliers. In addition, a
number of the operating companies have additional statutory
and voluntary reporting obligations that they comply with.
Payments to suppliers are actively monitored with a focus
on ensuring payment terms are complied with suppliers who
are small and medium businesses.
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Sustainability Statement
Governance continued
International Airlines Group | Annual Report and Accounts 2024
312
Additional governance disclosures required under Spanish Law 11/2018
Public subsidies received
Relevant standards: GRI 201-4
Unit
vly
2024
2023
2022
2021
2020
Total public subsidies
€ million
(34) %
157
238
293
707
474
UK and EU ETS allowances at zero cost
€ million
(35) %
153
235
273
277
122
Description
Public subsidies are defined as EU, Swiss and UK Emissions Trading Schemes/Systems (ETS) allowances granted at zero cost,
and personnel training grants, fuel grants and route support grants in Iberia and British Airways respectively. ETS allowances are
held at prices paid for such allowances during the reporting year.
Commentary
Operating companies in the Group receive some EU and UK ETS emission allowances at zero cost and purchase the remaining
allowances required for fulfilling annual compliance obligations in the EU and UK ETS markets.
Accounting profit/(loss) before tax
Relevant standards: GRI 207-4
Unit
vly
2024
2023
2022
2021
2020
UK
€ million
21 %
1,946
1,610
46
(2,417)
(4,512)
Spain
€ million
16 %
1,460
1,254
408
(705)
(2,538)
Republic of Ireland
€ million
(17) %
141
170
(41)
(368)
(556)
Other countries
€ million
(27) %
16
22
2
(16)
(204)
Description
Profits by country – the Group’s consolidated accounting profit or loss for the year broken down by the country in which it is taxable.
Commentary
The return to profitability in most of IAG’s main countries of operation reflects the recovery of the Group’s businesses from the global
outbreak of COVID-19.
Income tax paid
Relevant standards: GRI 207-4
Unit
vly
2024
2023
2022
2021
2020
UK
€ million
145 %
164
67
3
31
77
Spain
€ million
(65) %
75
216
126
(93)
(95)
Republic of Ireland
€ million
– %
–
–
–
(2)
(28)
Other countries
€ million
(25) %
6
8
5
1
1
Description
Taxes paid by country – the Group’s consolidated cash tax payments for the year broken down by the country in which they were
made. The numbers in brackets above represent refunds.
Commentary
The total net payment of €245 million is less than the tax charge for the Group of €831 million. The difference arises primarily due
to the variance between when losses and depreciation are included in the accounting result and the period when these amounts are
taken into account in calculating tax payments, and the timing of receipt of tax refunds.
‘Other countries’ comprises Belgium, Dominican Republic, France, Germany, Guatemala, Honduras, Hong Kong, India, Italy, Japan,
Poland, Singapore, Sweden, and Switzerland.
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313
Appendix
1. Sustainability due diligence
Core elements of due diligence
Section
Incorporation by reference in the Annual Report
Page number
a) Embedding due diligence in
governance, strategy and
business model
ESRS 2 General disclosures
Business model, Corporate governance 14-16, 91-152,
263-274
b) Engaging with affected
stakeholders in all key steps of
the due diligence
ESRS 2 General disclosures
Stakeholder engagement
21-31, 263-274
c) Identifying and assessing
adverse impacts
ESRS 2 General disclosures,
E1 Climate change
Risk management and principal risk
factors
72-90, 263-274,
275-291
d) Taking actions to address
those adverse impacts
E1 Climate change, S1 Own
workforce, S2 Workers in the value
chain, S4 Consumers and end-users,
G1 Business conduct, EU Taxonomy
Stakeholder engagement
21-31, 275-332
e) Tracking the effectiveness
of these efforts and
communicating
E1 Climate change, S1 Own
workforce, S2 Workers in the value
chain, S4 Consumers and end-users,
G1 Business conduct, EU Taxonomy
Stakeholder engagement
21-31, 275-332
2. Phase in reliefs taken
Disclosure requirement name
Paragraph and related application
requirement
Relief taken
Page number (If applicable)
Breakdown of total revenue by material ESRS sectors
SBM-1, 40b
Not applicable until
delegated act of
corresponding sector
is published
–
List of additional relevant ESRS sectors
SBM-1, 40c
Not applicable until
delegated act of
corresponding sector
is published
–
Anticipated financial effects from material physical
and transition risks and potential climate-related
opportunities
E1-9, 61-70
Qualitative data
applicable from the
2025 financial year
–
Characteristics of the company’s external workforce
S1-7
Applicable from the
2025 financial year
–
Social protection
S1-11
Applicable from the
2025 financial year
–
Number of days lost to work-related injuries and
fatalities from work-related accidents, work-related ill
health and fatalities from ill health
S1-14, 88e
Applicable from the
2025 financial year
–
Work-life balance metrics
S1-15
Applicable from the
2025 financial year
–
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Financial Statements
Sustainability Statement
Appendix
International Airlines Group | Annual Report and Accounts 2024
314
3. Calculation methodology and factors
Footprint metric
Unit
Description
Carbon emissions and energy consumption
Scope 1 emissions
(gross)
tCO2e
Direct emissions associated with IAG’s operations including use of jet fuel, diesel, petrol,
natural gas and halon. Sources of emissions include aircraft engines, boilers, auxiliary power
units and ground vehicle engines.
Gross emissions include reductions from Sustainable Aviation Fuel (SAF), in line with
globally recognised accounting standards.
SAF emission reductions are calculated using the volume of SAF uplifted, multiplied by the
lifecycle assessment (LCA) carbon saving of the fuel, relative to conventional jet kerosene,
and subtracted from our jet fuel emissions.
Scope 2 emissions
tCO2e
Indirect emissions associated with electricity use in ground facilities like offices, lounges,
data centres and hangars. Market-based emissions are based on the carbon intensity of
electricity purchased from suppliers. Location-based emissions are based on the carbon
intensity of national electricity grids.
CO2e is calculated using gCO2e/kWh factors from national agencies in Ireland, Spain and
the UK and IEA national electricity emissions factors.
Scope 3 emissions
tCO2e
Indirect emissions associated with Group activities across its value chain. Please refer to the
description of Scope 3 emission metrics later in this section for more details.
Flight-only carbon
intensity
gCO2/pkm
Grammes of CO2 per passenger kilometre (gCO2/pkm) is a standard industry measure
of flight fuel efficiency. It is calculated by dividing total jet fuel use by total passenger-km,
assuming one cargo-tonne-km is equivalent to 10 passenger-km – then multiplying this
value by a conversion factor of 3.15. IAG discloses this figure without emission reductions
from the use of SAF for the purpose of third-party corporate reporting.
This calculation excludes the jet fuel used by franchises, cargo carried on other airlines.
It excludes no-show passengers, in line with industry guidance.
Flight-only carbon
intensity (inclusive of
emission reductions
from use of SAF)
gCO2/pkm
As per ‘Flight-only carbon intensity’ but with emission reductions from the use of SAF
included. This metric is used for the calculation of the IAG-specific carbon
efficiency management incentive.
Scope 1 emissions (net)
tCO2e
Net emissions are calculated based on gross emissions less any carbon savings from EU,
Swiss and UK Emissions Trading Schemes (ETS) compliance obligations, volumes of offsets
purchased to meet Carbon Offsetting and Reduction Scheme for International Aviation
(CORSIA) compliance obligations, and volumes of offsets voluntarily purchased by IAG.
EU ETS allowances purchased from other sectors equate to a net reduction, aligned to
European Commission guidance. IAG has been disclosing net emissions since 2017 using
this methodology.
Renewable electricity
kWh
The share of electricity generated by renewable sources such as solar power and wind, based
on volumes procured from renewable electricity suppliers. In overseas offices where data on
electricity sources was unavailable, the source of electricity is assumed to be the national grid.
Carbon intensity (Scope
2)
gCO2/pkm
Based on Scope 2 location-based emissions divided by business activity, as measured in revenue
passenger-km, including cargo. Complements the flight-only emissions intensity metric.
GHG reduction initiatives tonnes
CO2e
Reductions in CO2e as a result of specific efficiency initiatives which started in the reporting
year. This excludes reductions from externally driven changes applicable to all airlines, such
as airspace changes.
Electricity
kWh
Consumption of electricity across IAG ground facilities, in millions of kWh. This includes
usage in main offices, overseas offices, hub airports and maintenance facilities.
Energy
kWh
The sum of the electricity across IAG ground facilities and energy use from fuel. Fuel energy
use is based on volumes of jet fuel, diesel, petrol, natural gas and gas oil, multiplied by the
latest available UK Government conversion factors. UK factors are used across the Group
as these are considered the most robust available.
Energy intensity per net
revenue (otherwise
known
as revenue per tonne
CO2e)
tCO2e/€
Calculated by dividing total Group revenue by the sum of Scope 1 emissions and Scope 2
location-based emissions.
CO2 per revenue tonne
kilometre
gCO2e/RTK The total number of revenue-generating tonnes of both passengers and freight, multiplied
by the distance flown.
Grammes of CO2 per revenue tonne kilometre (gCO2e/RTK) is an activity statistics indicator
commonly used by the aviation industry and third parties including the EU Commission and
Transition Pathway Initiative (TPI). This metric represents the distance flown and weight
transported associated with the revenue passengers of a flight. The great circle distance is
used for the distance flown and the mass and balance documentation of the flight for the
weight which, according to the policy of each airline, a default value of 100kg can be used
(or a different value approved by the competent authorities, representing the weight of the
passenger plus the hand luggage),
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Financial Statements
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International Airlines Group | Annual Report and Accounts 2024
315
Footprint metric
Unit
Description
Jet fuel consumed
tonnes
Jet fuel used within the aircraft fleet and for engine testing during the reporting year.
SAF fuel consumed
tonnes
SAF used within the aircraft fleet and for engine testing during the reporting year.
SAF is the main term used by the aviation industry to describe a non-conventional (fossil
derived) aviation fuel. SAF is the preferred IATA term for this type of fuel although when
other terms such as sustainable alternative fuel, sustainable alternative jet fuel, renewable
jet fuel or biojet fuel are used, in general, the same intent is meant. Please refer to section
‘E1-3 – Actions and resources in relation to climate change policies’ of this statement for
more information.
Fleet age
years
The average age of aircraft in the IAG fleet as of 31 December in a given year. The average
age of operational aircraft increases each year. This is offset by the impact of new deliveries
and retirements.
Scope 3 emission categories
Category 1:
Purchased goods
and services
million
tCO2e
Emissions from all purchased goods and services not captured in other upstream Scope 3
categories. Calculated using a spend based methodology and Watershed’s Comprehensive
Environmental Data Archive (CEDA) or supplier specific emission factors, for those with
CDP disclosures.
Category 2:
Capital goods
tCO2e
Emissions associated with aircraft manufacture. Calculated by multiplying the number
of aircraft delivered within the reporting year by an effective tCO2e per plane, based on
disclosed operational emissions from aircraft and engine manufacturers.
Category 3:
Fuel and energy-related
production
million
tCO2e
The well-to-tank emissions from jet fuel use, Scope 1 fuel use and Scope 2 electricity kWh.
CO2e values are calculated by multiplying the weight or energy content of various fuels
by the latest standardised UK Government GHG conversion factors.
Category 4:
Upstream transportation
and distribution
tCO2e
Emissions from subcontracted vehicles used in hub operations or cargo operations.
The emissions generated through the transportation and distribution product that IAG’s
operating companies purchase from outside of the Group. This methodology uses both
spend and activity based approach, depending on the availability of data.
Category 5:
Waste generated
in operations
tCO2e
Emissions associated with processing waste via recycling, recovery, incineration or landfill,
including disposed aircraft. These are calculated by multiplying total extrapolated global
waste volumes by appropriate CO2e/tonne conversion factors from international recognised
sources (including the UK Government and the US Environmental Protection Agency).
Category 6:
Business travel
tCO2e
Emissions from fuel related to IAG staff travel on rail and other airline carriers. Staff travel
on IAG aircraft is captured in Scope 1 emissions. Emissions from crew hotels were included
in 2024, where such data was available.
Category 7:
Employee commuting
tCO2e
Emissions from staff travelling to and from workplaces and the emissions from the energy
used when employees work from home. In the absence of detailed staff travel data,
emissions were estimated using employee numbers, locations and work patterns.
Category 8:
Upstream leased assets
tCO2e
This category is not applicable to IAG.
Category 9:
Downstream
transportation
and distribution
tCO2e
The emissions previously reported under this category is recategorised into Scope 3
Category 4, since the activities are being paid by IAG. This category covers emissions
associated with IAG Loyalty Retail, trading as the Wine Flyer, a subsidiary of IAG Loyalty,
and specifically covering the activity of delivering products to end consumers.
Category 10: Processing
of sold products
tCO2e
This is not a material source of emissions for IAG.
Category 11:
Use of sold products
million
tCO2e
Emissions related to products purchased by IAG loyalty programme members using Avios
points and use of sold aircraft. Purchases of IAG flights are reported under Scope 1
emissions. Product categories reported here are flights on non-IAG carriers, hotel stays
and car hire, as these are the most material categories. The use of sold aircraft, previously
owned by the Group, are included. The average expected life of an aircraft for passenger
or freight use is considered for the calculations.
Category 12: End-of-life
treatment of sold
products
tCO2e
Total expected end-of-life emissions from all products sold in the reporting year.
The methodology is consistent with disposed aircraft in Category 5.
Category 13:
Downstream leased
assets
tCO2e
Jet fuel emissions from any aircraft leased to other carriers on a seasonal basis.
Category 14:
Franchises
tCO2e
Emissions from the jet fuel burn of aircraft franchises.
Category 15:
Investments
tCO2e
Emissions associated with Group investments in the reporting year that are not already
included in our Scope 1 or Scope 2 footprint.
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Appendix continued
International Airlines Group | Annual Report and Accounts 2024
316
Waste metric
(as per GRI 306 standards)
Single-use plastic (SUP)
Volume
Items made wholly or partly of plastic which are typically intended to be used just once
or for a short period of time before they are thrown away. This aligns to the EU definition.
On-board
kg/
passenger
Numerator: On-board waste is both cabin and catering waste. Cabin waste is defined as
items collected from the cabin following flights, including newspapers, blanket and
headphone wrapping, and packaging that passengers have brought onto the aircraft.
Includes rubbish bins from toilets and excludes lost luggage. Catering waste is defined as
food and packaging left over from on-board catering, including drinks cans and IAG-owned
waste from food preparation at catering facilities. Includes all categories of catering waste
covering international and domestic flights.
Denominator: The number of inbound passengers at hub airports, plus outbound
passengers on short-haul flights whose waste was kept on-board the aircraft and offloaded
at the hub when the plane returned.
Cargo
kg/tonne
of cargo
handled
Numerator: Total waste from handling and packaging cargo. This consists largely of
recyclable materials such as plastic, wood and cardboard but is impacted heavily by ad hoc
disposal of perishable or hazardous cargo.
Denominator: Tonnes of cargo and mail handled in three main hubs: Dublin, Madrid and
London Heathrow.
Maintenance
kg/person-
hour
Numerator: Materials from specific maintenance/engineering facilities including paper, metal
and hazardous waste. Excludes airport waste, aircraft disposal, construction waste and
effluent.
Denominator: Number of available person-hours at maintenance facilities, as compiled
by Maintenance teams.
Office
kg/
employee
Numerator: Materials from printing, office stationery and on-site catering. Includes offices,
training facilities, and Irish, Spanish and UK call centres. Includes technology waste, defined
as primarily data centre equipment and IAG-owned IT equipment.
Denominator: Total FTE employees at the end of the reporting period.
Waste disposal method
(as per GRI 306 standards)
Landfilled
These
categories
and their
definitions
are used
within the
calculation
of IAG’s
waste
metrics.
Defined as ‘final depositing of solid waste at, below, or above ground level at engineered
disposal sites’.
Includes: waste sent directly to disposal.
Excludes: waste sent to third parties.
Incinerated
Defined as ‘controlled burning of waste at high temperatures’.
Includes: incineration with energy recovery.
Recovered
Defined as ‘any operation wherein products, components of products, or materials that
have become waste are used or prepared to be used to fulfil a purpose in place of new
products, components, or materials that would otherwise have been used for that purpose.’
Includes: incineration including energy from waste if the incinerator meets set standards.
Excludes: reprocessing into materials that are to be used as fuels.
Recycled
Defined as ‘reprocessing of products or components of products that have become waste,
to make new materials’.
Includes: downcycling, upcycling, composting and anaerobic digestion, uniforms reused
and plastics turned into new plastic products.
Excludes: reprocessing into materials that are to be used as fuels.
Noise metric
Noise per LTO
QC/LTO
Average noise per flight considering arrival and departure noise for each aircraft type.
Based on the number of flights of all aircraft which operated during the year, including
leased aircraft.
Quota Count (QC) values from the UK Government are used to create a relative
categorisation based on certified noise levels. For example, for a single flight, a Boeing 747
would have had a score of 6.0, while an Airbus A320neo would have a score of 0.5 or lower.
NOx per LTO
kg/LTO
Average emissions of the air pollutants nitrogen oxides (NOx) as aircraft take off and land.
This calculation considers the engine certifications and aircraft types of all aircraft that
operated during the year, including leased aircraft, referencing information from the ICAO
emissions database.
ICAO Chapter 14
% of fleet
at standard
ICAO Chapter standards compare aircraft noise against standardised limits that are
a combination of lateral, approach and flyover noise levels. Higher standards are more
stringent. Chapter 14 applies to new aircraft certified from 1 January 2017.
CAEP Chapter 6
% of fleet
at standard
ICAO CAEP standards are for NOx emissions from aircraft engines. Higher standards
are more stringent. The CAEP 6 NOx standard applies to engines manufactured from
1 January 2008.
CAEP Chapter 8
% of fleet
at standard
The CAEP 8 standard applies to engines manufactured from 1 January 2014.
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Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
317
4. Datapoints from other legislation
Disclosure points reported with alignment to ESRS
ESRS 2 GOV-1 Board's gender diversity paragraph 21 (d)
X
X
265-266
ESRS 2 GOV-1 Percentage of Board members who are
independent paragraph 21 (e)
X
265-266
ESRS 2 GOV-4 Statement on due diligence paragraph 30
X
314
ESRS 2 SBM-1 Involvement in activities related to fossil-fuel-
related activities paragraph 40 (d) i
X
X
X
14-16, 268
ESRS 2 SBM-1 Involvement in activities related to chemical
production paragraph 40 (d) ii
X
X
not material
ESRS 2 SBM-1 Involvement in activities related to controversial
weapons paragraph 40 (d) iii
X
X
not material
ESRS 2 SBM-1 Involvement in activities related to cultivation and
production of tobacco paragraph 40 (d) iv
X
not material
ESRS E1-1 Transition plan to reach climate neutrality by 2050
paragraph 14
X
275-283
ESRS E1-1 Undertakings excluded from Paris-aligned benchmarks
paragraph 16 (g)
X
X
275-283
ESRS E1-4 GHG emission reduction targets paragraph 34
X
X
X
286-287
ESRS E1-5 Energy consumption from fossil source disaggregated
by sources (only 'high-climate-impact' sectors) paragraph 38
X
287
ESRS E1-5 Energy consumption and mix paragraph 37
X
287
ESRS E1-5 Energy intensity associated with activities in 'high-
climate-impact' sectors paragraphs 40 to 43
X
287
ESRS E1-6 Gross Scope 1, 2, 3 and total GHG emissions paragraph 44
X
X
X
288-289
ESRS E1-6 Gross GHG emissions intensity paragraphs 53 to 55
X
X
X
288-289
ESRS E1-7 GHG removals and carbon credits paragraph 56
X
289-290
ESRS E1-9 Exposure of the benchmark portfolio to climate-related
physical risks paragraph 66
X
not disclosed,
subject to phase in
ESRS E1-9 Disaggregation of monetary amounts by acute and
chronic physical risk paragraph 66 (a); ESRS E1-9 Location of
significant assets at material physical risk paragraph 66 (c).
X
not disclosed,
subject to phase in
ESRS E1-9 Breakdown of the carrying value of its real estate assets
by energy-efficiency classes paragraph 67 (c).
X
not disclosed,
subject to phase in
ESRS E1-9 Exposure of the portfolio to climate-related
opportunities paragraph 69
X
X
not disclosed,
subject to phase in
ESRS E1-9 Breakdown of the carrying value of real estate assets
by energy-efficiency classes paragraph 67 (c).
X
not disclosed,
subject to phase in
ESRS E1-9 Degree of exposure of the portfolio to climate-related
opportunities paragraph 69
X
not disclosed,
subject to phase in
ESRS E2-4 Amount of each pollutant listed in Annex II of the E-
PRTR Regulation (European Pollutant Release and Transfer
Register) emitted to air, water and soil paragraph 28
X
not material
ESRS E3-1 Water and marine resources paragraph
X
not material
ESRS E3-1 Dedicated policy paragraph 13
X
not material
ESRS E3-1 Sustainable oceans and seas paragraph 14
X
not material
ESRS E3-4 Total water recycled and reused paragraph 28 (c)
X
not material
ESRS E3-4 Total water consumption in m3 per net revenue from
own operations paragraph 29
X
not material
ESRS 2- IRO 1 - E4 paragraph 16 (a) i
X
not material
ESRS 2- IRO 1 - E4 paragraph 16 (b)
X
not material
ESRS 2- IRO 1 - E4 paragraph 16 (c)
X
not material
ESRS E4-2 Sustainable land/agriculture practices or policies
paragraph 24 (b)
X
not material
ESRS E4-2 Sustainable oceans/seas practices or policies
paragraph 24 (c)
X
not material
ESRS E4-2 Policies to address deforestation paragraph 24 (d)
X
not material
ESRS E5-5 Non-recycled waste paragraph 37 (d)
X
not material
ESRS E5-5 Hazardous waste and radioactive waste paragraph 39
X
not material
Disclosure requirement and related datapoint
SFDR
reference
Pillar 3
reference
Benchmark
regulation
reference
EU Climate
Law
reference
Page number
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Appendix continued
International Airlines Group | Annual Report and Accounts 2024
318
ESRS 2 - SBM3 - S1 Risk of incidents of forced labour paragraph
14 (f)
X
292
ESRS 2 - SBM3 - S1 Risk of incidents of child labour paragraph 14
(g)
X
292
ESRS S1-1 Human rights policy commitments paragraph 20
X
292-294
ESRS S1-1 Due diligence policies on issues addressed by the
fundamental International Labour Organization (ILO) Conventions
1 to 8, paragraph 21
X
292-294
ESRS S1-1 Processes and measures for preventing trafficking in
human beings paragraph 22
X
292-294
ESRS S1-1 Workplace accident prevention policy or management
system paragraph 23
X
292-294
ESRS S1-3 Grievance/complaints handling mechanisms paragraph
32 (c)
X
295
ESRS S1-14 Number of fatalities and number and rate of work-
related accidents paragraph 88 (b) and (c)
X
X
300-301
ESRS S1-14 Number of days lost to injuries, accidents, fatalities or
illness
paragraph 88 (e)
X
300-301
ESRS S1-16 Unadjusted gender pay gap paragraph 97 (a)
X
X
301-303
ESRS S1-16 CEO pay ratio paragraph 97 (b)
X
301-303
ESRS S1-17 Incidents of discrimination paragraph 103 (a)
X
303
ESRS S1-17 Non-respect of UNGPs on Business and Human Rights
and OECD guidelines paragraph 104 (a)
X
303
ESRS 2- SBM3 – S2 Significant risk of child labour or forced labour
in the value chain paragraph 11 (b)
X
305
ESRS S2-1 Human rights policy commitments paragraph 17
X
305-306
ESRS S2-1 Policies related to value chain workers paragraph 18
X
305-306
ESRS S2-1 Non-respect of UNGPs on Business and Human Rights
and OECD guidelines paragraph 19
X
X
305-306
ESRS S2-1 Due diligence policies on issues addressed by the
fundamental International Labour Organization Conventions 1 to
8, paragraph 19
X
305-306
ESRS S2-4 Human rights issues and incidents connected to
upstream and downstream value chain paragraph 36
X
305-306
ESRS S3-1 Human rights policy commitments paragraph 16
X
not material
ESRS S3-1 Non-respect of UNGPs on Business and Human Rights,
ILO principles or and OECD guidelines paragraph 17
X
X
not material
ESRS S3-4 Human rights issues and incidents paragraph 36
X
not material
ESRS S4-1 Policies related to consumers and end-users paragraph
16
X
X
307-308
ESRS S4-1 Non-respect of UNGPs on Business and Human Rights
and OECD guidelines paragraph 17
X
307-308
ESRS S4-4 Human rights issues and incidents paragraph 35
X
307-308
ESRS G1-1 United Nations Convention against Corruption
paragraph 10 (b)
X
309-310
ESRS G1-1 Protection of whistleblowers paragraph 10 (d)
X
309-310
ESRS G1-4 Fines for violation of anti-corruption and anti-bribery
laws paragraph 24 (a)
X
X
311
ESRS G1-4 Standards of anti-corruption and anti-bribery
paragraph 24 (b)
X
311
Disclosure requirement and related datapoint
SFDR
reference
Pillar 3
reference
Benchmark
regulation
reference
EU Climate
Law
reference
Page number
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
319
Table of contents required by Spanish Law 11/2018
General Information
Business model description
ESRS 2 GOV-1 , ESRS 2 GOV-2,
ESRS 2 SBM-1, ESRS 2 SBM-2,
ESRS 2 SBM-3, G1-1
14-16, 21-31 91-152,
265-267,
268-274, 275, 292,
305,307,
309-310.
Organisation and structure
Market presence
Objectives and strategies
Main factors and trends that may affect future performance
Reporting framework used
ESRS 2 BP-1
263-264
Materiality assessment
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3
272-274, 275, 292,
305,
307,309
Social and employee related matters
Management approach
Description of the applicable policies and the result of these policies
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3, S1-1
S1-3
272-274, 292-294,
295
Main risks related to these issues
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3, ESRS 2 GOV-5
72-90, 267,
272-274, 305, 307
Employment
Total number and distribution of employees by sex, age, contract type, full-
time/part-time, professional category
S1-6, S1-9, GRI 405-1, GRI 2-7
295-298, 299
Total number of employees and distribution by country/region and
collective bargaining agreement
S1-6, GRI 2-7
295-296
Total number of employment contracts distribution and annual average
distributed by gender, age and job category
S1-6, GRI 405-1, GRI 2-7
295-296
Total number and attrition ratio of dismissals and voluntary leavers by
gender, age and job category
S1-6, GRI 401-1
295-296
Average remuneration broken down by gender, age and job category
S1-16, GRI 405-2
301-303
Salary gap
S1-16, GRI 405-2
301-303
Average remuneration of Board members and directors
GRI 2-19, GRI 2-20, GRI 2-21, S1-16
301-303
Policies to allow employees to disconnect from work
S1-1
292-294
Number of employees with disabilities
S1-12
300
Working organisation
Working hours organisation
S1-1
292-294
Absenteeism rates
S1-14, GRI 403-9
300-301
Measures to promote work-life balance
S1-4, S1-5
295-298
Health and safety
Occupational health and safety conditions
S1-14
300-301
Number of workplace accidents and accident rates broken down by gender
S1-14
300-301
Occupational illness cases broken down by gender
S1-14
300-301
Labour relations
Social dialogue organisation
S1-2
294-295
Percentage of employees covered by collective agreements broken down by
country
S1-3, S1-8
295, 298-299
Results of collective agreements, especially in the field of health and safety
S1-8
298-299
Description of the mechanisms and procedures the company has in place to
promote the involvement of workers in the management of the company, in
terms of information, consultation and participation
S1-8
298-299
Training
Policies implemented
S1-1
292-294
Total number of training hours broken down by employee category
S1-13
304
Universal accessibility of people with disabilities
Universal accessibility of people with disabilities
S1-1, S1-12
292-294, 300
Area
European Sustainability Reporting
Standard (ESRS) or Global Reporting
Initiative (GRI) reference
Page number
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Appendix continued
International Airlines Group | Annual Report and Accounts 2024
320
Equality
Measures taken to promote equal treatment and opportunities between women
and men
S1-4, S1-5
292-294, 295
Equality plans
S1-1, S1-4
292-294, 295
Measures taken to promote employment
S1-1, S1-4
292-294, 295
Protocols against sexual harassment and on the basis of gender
S1-1, S1-4
292-294, 295
Integration and universal accessibility for persons with disabilities
S1-1, S1-4
292-294, 295
Policy against all types of discrimination and policy on diversity
S1-1
292-294
Environmental matters
Management approach
Description of the applicable policies and the result of these policies
ESRS 2 IRO-1, ESRS 2 IRO-2, ESRS
2 IRO-3, E1-1, E1-2, E1-3
272-286
Main risks related to these issues
ESRS 2 GOV-5, ESRS 2 IRO-1,
ESRS 2 IRO-2, ESRS 2 SBM-3,
E1-1
72-90, 266,
272-274, 283-285
Environmental management
Information of the current and foreseeable impact of the Company’s
activities on the environment
ESRS 2 SBM-3, E1-1
271-273, 274-282
Environmental assessment and certification procedure
ESRS 2 GOV-5
267
Resources devoted to environmental risks prevention
ESRS 2 GOV-5, ESRS 2 IRO-1,
ESRS 2 IRO-2, ESRS 2 IRO-3,
E1-3
267, 272-274,
283-285
Implementation of the precautionary principle
ESRS 2 GOV-5, ESRS 2 IRO-1,
ESRS 2 IRO-2, ESRS 2 IRO-3,
E1-3
267, 272-274,
283-285
Amount of provisions and warranties for environmental risks
ESRS 2 GOV-5, E1-1
267, 275-283
Pollution
Measures to prevent, reduce or repair emissions (including noise and light
pollution)
GRI 3-3, GRI 305-7, light
pollution not material
291
Circular economy and waste prevention and management
Measures related to prevention, recycling, reuse and other form of waste
recovery and disposal
GRI 306-3
291
Actions to avoid food waste
not material
-
Sustainable use of resources
Water consumption
not material
-
Raw materials consumption
not material
-
Direct and indirect energy consumption
E1-5
287
Measures to improve energy efficiency
E1-3
284-286
Use of renewable energy
E1-5
287
Climate change
Relevant aspects regarding greenhouse gas emissions (GHG)
E1-5, E1-6
287, 288-289
Measures to adapt to climate change
E1-1
275-283
Objective related to GHG reduction
E1-1, E1-4
275-283, 286-287
Biodiversity
Measures to preserve or restore biodiversity
not material
-
Impacts caused by activities or operations in protected areas
not material
-
Taxonomy
EU taxonomy disclosure
Regulation on EU Taxonomy
(EU 2020/852)
323-332
Area
European Sustainability Reporting
Standard (ESRS) or Global Reporting
Initiative (GRI) reference
Page number
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
International Airlines Group | Annual Report and Accounts 2024
321
Respect for human rights
Management approach
Description of the applicable policies and the result of these policies
ESRS 2 SBM-3, S1-1, S2-1, S4-1,
G1-1
292-294, 309-310
Main risks related to these issues
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3, ESRS 2 GOV-5
72-90, 267,
272-274
Specific contents
Implementation of human rights due diligence procedures
S1-1, S2-1, S2-4, S4-4
292-294,
305-306, 307-308
Measures to prevent and manage potential human rights abuses
Reported cases of human rights violations
S1-17
303
Promotion and compliance with ILO´s provisions
S1-2
294-295
Elimination of forced or compulsory labour
S1-1, S2-1, G1-1
292-294,
305-306, 309-310
Effective abolition of child labour
S1-1, S2-1
292-294, 305-306
Anti-corruption and bribery matters
Management approach
Description of the applicable policies and the result of these policies
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3, G1-1, G1-3, G1-4
272-274, 309-310,
311
Main risks related to these issues
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3, ESRS 2 GOV-5
72-90, 267,
272-274
Specific contents
Measures to prevent corruption and bribery
S1-1, G1-1, G1-3, G1-4
292-294, 309-310,
311
Measures to prevent money-laundering
S1-1, G1-1, G1-3, G1-4
292-294, 309-310,
311
Contributions to not-for-profit organisations
not material
-
Other information on the Company
Management approach
Description of the applicable policies and the result of these policies
S1-1
292-294
Main risks related to these issues
ESRS 2 IRO-1, ESRS 2 IRO-2,
ESRS 2 SBM-3, ESRS 2 GOV-5
72-90, 267,
272-274
Commitment to sustainable development
Impact of the Company’s activities on employment and local development
S1-1, S2-1, G1-1
292-294,
305-306, 309-310
Impact of the Company’s activities on local populations and territories
not material
-
Relations with actors in the local communities and forms of engagement
with them
not material
-
Partnership or sponsorship actions
not material
-
Sustainable supply chain management
Inclusion of social, gender equality and environmental issues in the procurement
policy
S2
305-306
Consideration of suppliers’ and subcontractors’ social and environmental
responsibility in relations with them
S2-1, G1-2
292-294,
305-306, 309-310
Supervision and audit systems
ESRS 2 GOV-1 , ESRS 2 GOV-2, G1-1
265-266, 309-310
Consumer relationship management
Measures to protect consumer health and safety
not material
-
Claims systems and complaints
ESRS 2 SBM-3, S4-3
272-274, 307-308
Complaints received and their outcome
S4-4
307-308
Tax information and transparency
Profits broken down by country
GRI 3-3, 207-4
313
Corporate income tax paid
GRI 3-3 201-1, 207-4
313
Public subsidies received
GRI 201-4, Accounting criteria
313
Area
European Sustainability Reporting
Standard (ESRS) or Global Reporting
Initiative (GRI) reference
Page number
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
Appendix continued
International Airlines Group | Annual Report and Accounts 2024
322
EU Taxonomy
Overview
What is the EU Taxonomy Regulation?
Regulation EU 2020/852 (the ‘EU Taxonomy Regulation’) is a
framework to identify and to facilitate sustainable investment
across the EU. This framework operates through a classification
system for determining when an economic activity can be
considered environmentally sustainable according to EU
standards, to promote a transition to a zero-carbon future.
The taxonomy regulation aims to guide funding towards
solutions that tackle the climate crisis and prevent further
environmental degradation. It aims to encourage investment
in a low-carbon economy by creating common definitions of
sustainability and mandatory disclosures to help investors make
informed decisions.
How does it work?
The EU Taxonomy Regulation includes economic activities
against which companies can report their business activities.
These economic activities are then screened against the
technical criteria of each of the environmental objectives and
minimum safeguard requirements to arrive at the taxonomy-
aligned activities.
Having identified the relevant (eligible) economic activities, the
Group calculates and reports the aligned revenue (turnover),
capital expenditure (capex) and operating expenditure (opex)
for the financial year.
The reporting scope
The EU Taxonomy Regulation’s reporting scope covers the
Group’s business activities, based on the same principles of
consolidation as the consolidated financial statements, adjusted
for the various narrower scope definitions of the EU Taxonomy
Regulation. The period for the EU Taxonomy Regulation is the
year to 31 December.
The Group’s eligible activities principally relate to the activities
of our airline operations and associated maintenance, repair
and overhaul (MRO) operations. For 2023 we were not required
to report aligned revenues or expenditures for these activities,
which became applicable for reporting in 2024.
The reporting basis of the EU Taxonomy Regulation differs
from that of our consolidated financial statements, which are
prepared in accordance with International Financial Reporting
Standards as adopted by the EU (IFRS). Such differences
include, but are not limited to, not recognising the investment
in or results from equity-accounted investments, as well as
a very narrow scope definition for opex. These and other
differences result in lower reported eligible turnover, capex and
opex under the EU Taxonomy Regulation when compared to
other financial and sustainability disclosures.
While the Group is supportive of efforts to enhance and
increase the comparability of climate disclosures more broadly,
the limited scope of the EU Taxonomy Regulation does not
enable the Group to outline all of our investment activity in its
Flightpath net zero transition. The limitations of the Regulation
in the following areas prevent the Group from fully disclosing
our investment in sustainability: (i) any joint ventures to
produce SAF or hydrogen-fuelled aircraft do not fall within the
scope of our reporting; (ii) our long-term purchase agreements
for SAF and other renewable power products, which underpin
investment and enable financing of large-scale renewable
production, are excluded. The additional reporting restrictions
on aviation (where the growth of the entire global aviation fleet
is used to discount an individual company’s investment in best-
in-class aircraft and SAF) also limit the Group’s ability to fully
express its financial commitment to the transition to a low-
carbon environment. This approach, requiring company-specific
performance to be adjusted based on global trends, is unique
to the aviation sector and we feel dilutes the impact of the
Taxonomy in driving more investment at an individual
company level.
Changes in EU Taxonomy Regulation in 2024
While there have been no amendments made to the EU
Taxonomy Regulation during the course of 2024, the European
Commission, on 29 November 2024, published a draft
commission notice (the ‘Notice’) on the interpretation and
implementation of certain legal provisions of the EU Taxonomy
Environmental Delegated Act, the EU Taxonomy Climate
Delegated Act and the EU Taxonomy Disclosures Delegated
Act. The notice provides a wide range of responses to
frequently asked questions, including, but not limited to, those
economic activities pertaining to the aviation industry.
Further details regarding the application of the aviation specific
economic activities are given below in the section entitled
‘Understanding the aviation economic activities’.
Snapshot of eligible and aligned activities
For the years to 31 December 2024 and 2023, the Group’s eligible and aligned KPIs were as follows:
Eligible
Aligned
Year to 31 December 2024
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Turnover
30,487
95%
11,323
35%
Capex
2,779
78%
2,318
65%
Opex
2,673
98%
1,558
57%
Eligible
Aligned
Year to 31 December 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Turnover
27,166
92%
–
– %
Capex
3,543
86%
–
– %
Opex
2,509
99%
–
– %
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
EU Taxonomy
International Airlines Group | Annual Report and Accounts 2024
323
Understanding the EU Taxonomy Regulation
Basis of preparation
The Group prepares its disclosures in accordance with the
Delegated Act EU 2021/2178 (enacted 4 June 2021), the
associated Delegated Regulation EU 2021/2139 (enacted 6 July
2021), the amendments to Delegated Regulation EU 2021/2139
(enacted 21 November 2023) (referred to as the Amended
Delegated Regulation), several Commission Notices containing
answers to frequently asked questions, the annually updated
EU Taxonomy User Guide and the EU Taxonomy Compass
(a website that offers a range of online tools to enable users
to better understand the EU Taxonomy Regulation and the
associated reporting obligations).
In accordance with the disclosure requirements of Article 8 of
the EU Taxonomy Regulation, the Group confirms that it does
not carry out, fund or have exposures to nuclear and fossil
gas related activities.
The EU Taxonomy Regulation framework
The EU Taxonomy Regulation establishes 150 predefined
and prescriptive economic activities across the following six
environmental objectives:
1. Climate change mitigation;
2. Climate change adaptation;
3. Sustainable use and protection of water and marine resources;
4. Transition to a circular economy;
5. Pollution prevention and control; and,
6. Protection and restoration of biodiversity and ecosystems.
The EU Taxonomy Regulation also sets out four overarching
conditions that an economic activity must meet in order to
qualify as environmentally sustainable and accordingly able
to be reported as taxonomy-aligned:
1. Making a substantial contribution to at least one
environmental objective;
2. Doing no significant harm to any of the other five
environmental objectives;
3. Complying with minimum safeguards; and,
4. Complying with the detailed technical screening criteria
set out in the EU Taxonomy Regulation delegated acts.
Taxonomy-eligible
The EU Taxonomy Regulation defines taxonomy-eligible
economic activities as those activities of the Group that comply
with any of the aforementioned 150 economic activities across
nine sectors. Such activities are eligible whether they comply
with the technical screening criteria or not.
The most important of those, which relate to the aviation sector,
are those activities associated with the (i) Manufacturing of
aircraft, (ii) Passenger and freight air transport and (iii) Air
transport ground handling which now require alignment reporting
for 2024.
If an activity is not included in the EU Taxonomy Regulation,
then it is not considered to be eligible. The main categories
for eligible spend in 2024 are set out in the table below:
Identified economic activities of the Group
For 2024, the Group has identified a total of 15 economic activities as eligible for reporting as follows:
Aviation
Manufacturing of aircraft (CM)
Passenger and freight air transport (CM)
Air transport ground handling operations (CM)
Construction and real estate activities
Renovation of existing buildings (CM)
Acquisition and ownership of buildings (CM)
Installation, maintenance and repair of energy–efficiency equipment (CM)
Installation, maintenance and repair of charging stations for electric vehicles in buildings (and parking spaces attached to buildings) (CM)
Installation, maintenance and repair of renewable energy technologies (CM)
Energy
Electricity generation using solar photovoltaic technology (CM)
Information and communication
Data-driven solutions for GHG emissions reductions (CM)
Technical, scientific and professional activities
Research into innovative low-carbon technologies (CM)
Transport
Transport by motorbikes, passenger cars and light commercial vehicles (CM)
Urban and suburban transport, road passenger transport (CM)
Water supply, sewerage, waste management and remediation
Depollution and dismantling of end-of-life products (CE)
Manufacturing
Sale of spare parts (CE)
Preparation for re-use of end-of-life products and product components (CE)
Key: CA – climate adaptation; CM – climate mitigation; CE – circular economy
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
EU Taxonomy continued
International Airlines Group | Annual Report and Accounts 2024
324
Note that the categories of eligible activities have been reduced
from 2023 following further clarification on the relevance of certain
activities to specific taxonomy-eligible assets.
In practical terms, identifying taxonomy-eligible economic
activities is the first step towards assessing the alignment of
economic activities against the technical screening criteria.
In addition, companies are required to ensure that and explain
how taxonomy-eligible turnover, capex or opex are not double
counted where the activities of the Group fall under more than
one economic activity.
Taxonomy aligned
A taxonomy-aligned activity is one that having identified
eligibility, contributes substantially to at least one of the six
environmental objectives, does no significant harm to the other
environmental objectives and complies with the minimum
safeguards. Details on substantial contribution, do no significant
harm and minimum safeguards are given below.
Substantial contribution
The EU Taxonomy Regulation provides detailed substantial
contribution criteria to ensure that the associated economic
activity has either a substantial positive impact on one of the
six aforementioned environmental objectives or substantially
reduces the negative impact on the environment. The most
relevant objective for the Group is Climate Mitigation; however,
the categories of Circular Economy, Pollution Prevention and
Water also have relevant activities for the Group. These
substantial contribution criteria vary by economic activity
and each economic activity can apply to more than one
environmental objective.
Do no significant harm (DNSH)
Together with the criteria to assess if an activity substantially
contributes to at least one of the EU Taxonomy Regulations
environmental objectives, the criteria for DNSH specify the
minimum requirements that the economic activity should
meet to avoid harming any of the other five environmental
objectives. The DNSH criteria differ by economic activity
and by environmental objective.
Any breach of the DNSH criteria would automatically disqualify
an activity from being environmentally sustainable and as
such lead to the associated activities not meeting the criteria
for alignment.
In addition, there are four generic DNSH criteria that apply
to all economic activities, being: (i) climate change adaptation;
(ii) water and marine resources; (iii) pollution prevention and
control regarding the use and presence of chemicals; and
(iv) protection and restoration of biodiversity and ecosystems.
These generic criteria apply to several of the Group’s identified
economic activities.
Minimum safeguards
The EU Taxonomy Regulation defines the minimum safeguards
as due diligence and remedy procedures implemented by
a company that is carrying out an economic activity in order
to ensure alignment with the Organisation for Economic
Cooperation and Development Guidelines for Multinational
Enterprises (OECD MNEs) and the UN Guiding Principles on
Business and Human Rights (UNGP). The latter includes the
principles and rights set out in eight of the ten fundamental
conventions identified in the International Labour Organization
(ILO) Declaration of the Fundamental Principles and Rights
at Work and the International Bill of Human Rights.
The Group complies at all times with the requirements of
the OECD MNEs. In addition, the Group considers respect
and the upholding of human rights as a critical cornerstone
of its operations and is embedded within its Code of Conduct.
The Group considers that it complies with the UNGP.
Accordingly, the Group considers that all taxonomy-eligible
activities are compliant with the minimum safeguard
requirements of the EU Taxonomy Regulation.
Technical screening criteria
Each of the detailed technical screening criteria, under each
environmental objective, are based on stringent levels of
environmental performance as opposed to transitional activities
or alternative acceptable approaches. In certain instances such
requirements go significantly beyond other existing legislation
and what is theoretically technically and operationally possible
at the reporting date.
Due to their complexity and reliance on EU standards, the
technical screening criteria can be difficult to interpret, especially
for activities and key suppliers based outside of the EU.
Capex Plan
The EU Taxonomy Regulation permits capex and opex to be
treated as taxonomy-aligned when such expenditure form part
of a ‘capex plan’. A capex plan is defined as a plan that either
aims to expand the Group’s taxonomy-aligned economic
activities or to upgrade pre-existing taxonomy-eligible
economic activities to taxonomy-aligned economic activities
within a five-year period. In addition, the relevant plan must
be approved by management and detailed at the taxonomy
economic activity level.
Given the uncertainty of definitions and lack of guidance
pertaining to capex plans within the EU Taxonomy Regulation,
the Group has elected not to report any capex or opex as
taxonomy-aligned as a result of the capex plan provisions.
Reporting financially aligned activities under
the EU Taxonomy Regulation
The EU Taxonomy Regulation requires the reporting of KPIs
associated with turnover, capex and opex, both for eligible and
aligned activities. These KPIs differ to those determined by the
Group in assessing and monitoring the Group’s performance
and should only be considered with reference to the EU
Taxonomy Regulation. Each KPI is calculated as the amount
associated with the eligible and aligned economic activities
(the numerator) divided by the total (denominator).
The reporting basis of the EU Taxonomy Regulation differs to
our consolidated financial statements, which are prepared in
accordance with IFRS. Such differences include, but are not
limited to, not recognising the investment in or results from
equity-accounted investments, as well as a very narrow scope
definition of opex. These and other differences result in a lower
reported turnover, capex and opex under the EU Taxonomy
Regulation when compared to other financial disclosures.
Turnover KPI
The turnover KPI comprises the total revenue line from the Income statement of the consolidated financial statements and is
detailed below:
Year to 31 December
€ million
2024
2023
Passenger revenue
28,274
25,810
Cargo revenue
1,234
1,156
Other revenue
2,592
2,487
Total taxonomy turnover (denominators)
32,100
29,453
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The following table provides a summary of the taxonomy-eligible and taxonomy-aligned revenues by major economic activity,
both as absolute figures (being the numerator) and as a percentage of the aforementioned denominator:
Eligible
Aligned
Year to 31 December 2024
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport
29,508
91.9%
11,190
34.9%
Manufacturing of aircraft
820
2.6%
–
0%
Air transport ground operations
159
0.5%
133
0.4%
Total taxonomy eligible and aligned turnover
30,487
95.0%
11,323
35.3%
Eligible
Aligned
Year to 31 December 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport
26,288
89.3%
–
–%
Manufacturing of aircraft
683
2.3%
–
–%
Air transport ground operations
195
0.7%
–
–%
Total taxonomy eligible and aligned turnover
27,166
92.3%
–
–%
Capex KPI
The capex KPI comprises the Additions to Property, plant and equipment (note 13 of the consolidated financial statements)
and Intangible assets (note 17 of the consolidated financial statements). The denominators are detailed as follows:
Year to 31 December
€ million
2024
20231
Additions to Property, plant and equipment (note 13)
3,086
3,753
Additions to Intangible assets (note 17)1
494
366
Total taxonomy capex (denominators)
3,580
4,119
1
The 2023 capex denominator has been restated to align with the reclassification reported in the consolidated financial statements (notes 2, 17 and 37).
The numerator for aligned capex includes those expenditures included in the denominator that are any of the following: (i) related
to taxonomy-aligned economic activities; (ii) part of the capex plan to expand taxonomy-aligned activities or to allow taxonomy-
eligible economic activities to become taxonomy-aligned; or (iii) the purchase of output from taxonomy-aligned economic activities.
However, given the uncertainty of definitions and lack of guidance pertaining to parts (ii) and (iii), the Group has elected only
to report financial data relating to taxonomy-aligned economic activities.
The following table provides a summary of the taxonomy-eligible and taxonomy-aligned capex by major economic activity, both
as absolute figures (being the numerator) and as a percentage of the aforementioned denominator:
Eligible
Aligned
Year to 31 December 2024
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport
2,779
77.6%
2,318
64.7%
Total taxonomy eligible and aligned capex
2,779
77.6%
2,318
64.7%
Eligible
Aligned
Year to 31 December 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport
3,543
86.0%
–
–%
Total taxonomy eligible and aligned capex
3,543
86.0%
–
–%
Opex KPI
The opex KPI is defined as those costs not capitalised that relate to: (i) research and development; (ii) building renovation measures;
(iii) short-term leases; (iv) maintenance and repair; and (v) other direct expenditures relating to the day-to-day servicing of assets
of property, plant and equipment.
Other direct expenditures relating to day-to-day servicing of assets of property, plant and equipment is further defined as including:
(i) maintenance materials; (ii) the employee costs of repairing an asset; and (iii) IT dedicated to sustainability-orientated
maintenance, other than that capitalised. For the avoidance of doubt, other direct expenditures exclude the following: (i) overheads;
(ii) raw materials; (iii) the employee costs associated with operating the asset; (iv) the cost of managing research and development
projects; (v) general IT costs; (vi) general professional service costs; and (vii) electricity, fluids, or reagents needed to operate property,
plant and equipment. The opex KPI definition is narrower than the Group’s definition of operating expenditure and does not capture
all of the expenditure on otherwise eligible activities. The opex KPI is reconciled to total operating expenditure as follows:
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Year to 31 December
€ million
2024
20231
Maintenance and repair
2,673
2,509
Expenses relating to short-term leases
56
26
Total taxonomy opex (denominators)
2,729
2,535
Other operating expenses outside the scope of the EU Taxonomy Regulation
25,088
23,411
Total operating expenditure per Income statement
27,817
25,946
1
The results for 2023 have been restated to conform with the current basis of assessment of opex to better reflect the eligibility nature of certain
economic activities, including IT operating costs and research and development incurred.
2 Referred to as ‘Engineering and other aircraft costs’ from the Income statement of the consolidated financial statements.
The numerator for aligned opex includes those expenditures included the denominator that is any of the following: (i) related to
taxonomy-aligned economic activities; (ii) part of the capex plan to expand taxonomy-aligned activities or to allow taxonomy-
eligible economic activities to become taxonomy-aligned; or (iii) the purchase of output from taxonomy-aligned economic activities.
However, given the uncertainty of definitions and lack of guidance pertaining to parts (ii) and (iii), the Group has elected only to
report against taxonomy-aligned economic activities.
The Group considers that the definitions of the opex KPI, when considering the turnover KPI, do not reflect the economic reality
of operating a taxonomy-aligned asset. For instance, all revenue associated with the operation of a taxonomy-aligned aircraft meets
the definition of the turnover KPI; however, the costs associated with operating that aircraft are limited to the maintenance of that
aircraft and, for example, exclude the expenditure on SAF used in the operation of those aircraft. The following table provides
a summary of the taxonomy-eligible and taxonomy-aligned opex by major economic activity, both as absolute figures (being the
numerator) and as a percentage of the aforementioned denominator:
Eligible
Aligned
Year to 31 December 2024
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport
2,673
97.9%
1,558
57.1%
Total taxonomy eligible and aligned opex
2,673
97.9%
1,558
57.1%
Eligible
Aligned
Year to 31 December 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport
2,509
99.0%
–
–%
Total taxonomy eligible and aligned opex
2,509
99.0%
–
–%
Methodology/data collection and validation
The Group has established internal processes for the collection,
validation and reporting of taxonomy data through the established
governance structure described in the Governance section
of this Annual Report. The Group utilises a seven-step process
in preparing its taxonomy disclosures:
1. Identification of applicable economic activities – IAG
Sustainability and IAG Finance undertake the initial scoping
as to which economic activities are applicable to the
operations of the Group. Representatives from the
sustainability and finance functions of each operating
company validate the completeness of this identification.
In undertaking the scoping of these activities, the Group has
identified eligible activities associated only with the climate
change mitigation objective;
2. Determination of assessment factors – where judgement is
required to be applied in the application of the EU Taxonomy
Regulation, IAG Sustainability and IAG Finance develop
a standardised approach to such application;
3. Training on existing and new regulation – annually IAG
Sustainability and IAG Finance undertake workshops across
the Group to ensure all relevant members of the sustainability
and finance communities involved in taxonomy are trained
on the existing methodology, changes in regulations and key
judgements applied;
4. Standardised reporting – IAG Sustainability and IAG Finance
have developed standardised reporting templates for the
quantification, by economic activity, of taxonomy-eligible
activities. As well as the detailed specific technical screening
criteria, the DNSH criteria and the minimum safeguards
to derive the taxonomy-aligned quantification;
5. Review and validation – IAG Sustainability and IAG Finance
validate this information across operating companies and
consolidate the information;
6. Quantitative threshold for reporting – the Group has
developed a quantitative threshold of €2 million below which
the Group assumes such taxonomy-eligible activities are
not taxonomy-aligned. This assessment is performed at an
individual economic activity level and by each operating
company; and
7. Reporting – IAG Sustainability and IAG Finance calculate the
associated consolidated KPI metrics for eligibility and alignment.
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Understanding the aviation economic activities
The Amended Delegated Regulation, issued in 2023,
introduced the economic activities of Manufacturing of aircraft,
Passenger and freight air transport and Air transport ground
handling operations.
The below information reflects the assessment criteria required
in 2024.
Passenger and freight air transport
These economic activities cover all owned and leased
aircraft that the Group operates for the transport of passengers
and freight.
This section does not attempt to detail all of the technical
screening criteria, but the pertinent screening criteria for
meeting alignment are:
a. The aircraft has zero direct (tailpipe) CO2 emissions1;
b. As at the date of the Amended Delegated Regulation coming
into force, those aircraft determined to be ‘compliant aircraft’2;
c. Subsequent to the date of the Amended Delegated
Regulation coming into force, those aircraft determined to be
‘compliant aircraft’2; and with the commitment that a non-
compliant aircraft in the fleet is either:
i. Permanently withdrawn from use within six months of
delivery of the compliant aircraft; or
ii. Permanently withdrawn from the fleet within six months of
delivery of the compliant aircraft, in which case the
replacement ratio3 is applied.
d. Or if not determined to be a compliant aircraft, the aircraft
can still meet the criteria for eligibility and alignment if it
operates with a minimum of 9% SAF in 20244, increasing
by 2% for each subsequent year.
Further technical screening criteria that comes into force from
1 January 2030, have not been included in the above summary.
For aircraft operation, the DNSH criteria are limited to the
aforementioned generic criteria and certain criteria relating to
a number of topics, including an assessment of climate
adaptation, prevention of waste generation, recycling of such
assets, the control of hazardous substances and restrictions
on noise pollution. For these criteria, the Group has only
considered aircraft compliant if the associated manufacturer
has provided confirmation of compliance.
Having identified the compliant aircraft, the Group is
required to report the turnover, capex and opex by those
individual aircraft5.
Key judgements the Group considers will be relevant
in interpreting and applying the Amended Delegated
Regulation
1 Zero direct CO2 emissions are not defined but is interpreted
to be both electric and hydrogen powered aircraft. Both of
these technologies are in their infancy and while the Group
expects both technologies to become commercially viable
in due course, these are not expected before 2035, at the
earliest. Accordingly, the Group will be unable to report any
aligned spend in the foreseeable future.
2 A compliant aircraft is defined as those meeting the technical
screening and DNSH criteria of the economic activity of the
manufacturing of aircraft. These criteria include, but are not
limited to: (i) a specific ratio of CO2 emissions as a proportion
of their maximum take-off mass; (ii) pollution prevention
criteria, such as specific certification regarding noise
pollution; and (iii) ensuring specific hazardous materials are
not included in the construction of the aircraft, including
certain anti-fouling paints which are required by law, for
safety reasons, to be included in the aircraft. Each aircraft
manufacturer is required to provide a self-declaration as to
which of their aircraft meet the criteria for being a compliant
aircraft. While certain manufacturers have provided these
declarations during 2024, not all manufacturers have and
accordingly, the Group expects further developments and
self-certification during 2025.
The Group is required under local and international safety
standards to have installed certain hazardous materials on its
aircraft that are prohibited under the EU Taxonomy
Regulation as defined in Appendix C of the DNSH category.
The Group has conducted an analysis of all hazardous materials
in its operations, as defined in Appendix C of the DNSH category
of the EU Taxonomy Regulation. The Group has identified a
limited number of materials that are installed on our aircraft
that are required by local and international law, for safety
reasons, but are prohibited under the EU Taxonomy Regulation.
Certain of these materials, including anti-fouling paints used
in the aircraft, have been clarified in the draft commission
notice published by the European Commission on
29 November 2024 as being exempt from the DNSH criteria.
However, the aforementioned draft commission notice does
not cover all hazardous materials which are required by
safety standards. The only product that the Group has
installed in its aircraft not covered by existing exemptions
are halons, which are required for fire suppression equipment.
The Group has such materials installed as there are no
suitable alternative products and such materials are installed
and used under strict controlled conditions. In addition, such
hazardous materials are only used in emergency scenarios,
none of which occurred in 2024.
The Group expects that with technological advancement,
suitable alternative products will be identified by aircraft
manufacturers and these hazardous materials will be withdrawn.
The Group considers there to be uncertainty in the EU
Taxonomy Regulation as to whether it meets the DNSH criteria,
given that exemptions are given for some, but not all, safety
critical materials. Therefore, the Group has applied judgement
in determining whether it meets all of the DNSH criteria and
has concluded that it has met the alignment requirements.
Had the Group not reached this conclusion, the Group would
have reported no alignment for each of its KPIs in 2024.
3 The replacement ratio is defined as the 10-year average of
the total global number of aircraft permanently withdrawn
from use divided by the total global number of aircraft
delivered. The draft commission notice published by the
European Commission on 29 November 2024 confirmed
that the replacement ratio to be applied for 2024 was 0.48.
In accordance with the Delegated Act 2023/2485, the
application of the replacement ratio is limited to the revenues
of the Group and does not apply to opex and capex. If the
global number of aircraft delivered exceeds the global
number of aircraft permanently withdrawn, then the
taxonomy-aligned financial revenues of the Group are
reduced. As a result, the replacement ratio does not reflect
the individual activities of the Group as part of its transition
to a low-carbon environment, but instead the entirety of the
global aviation sector. Actions that influence such a global
measure are outside the control of the Group and do not
provide enhanced comparability within the airline sector
to investors or users of our taxonomy reporting.
4 As detailed, the EU Taxonomy Regulation permits the
allocation of SAF to non-compliant aircraft to make them
compliant if a minimum of 9% of the fuel consumption is SAF.
The EU Taxonomy Regulation does not provide any guidance
as to how to undertake this allocation and accordingly the
Group has applied judgement in such allocation. In
undertaking this allocation, the Group has allocated SAF
on the basis of the total fuel consumed by aircraft family.
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5 At of 31 December 2024, the Group operates 601 aircraft
within its fleet and does not monitor or report all revenue
and expenditure on an individual aircraft basis. Accordingly,
the Group has applied judgement in determining the basis
on which to allocate revenue and expenditure to the
associated assets. The details of which are as follows:
Revenues - The Group is able to monitor revenue
denominated metrics by aircraft family (such as across
all of the Airbus A320 family) using metrics such as
Average Seat Kilometres (ASKs) and Revenue Passenger
Kilometres (RPKs), but cannot monitor the level of such
activity to an individual aircraft. Accordingly, the Group
has allocated revenues to individual assets based on the
proportion of ASKs for those compliant aircraft at the
operating company level;
Capex - The Group is able to monitor certain capex on
an aircraft-by-aircraft basis and, accordingly, has not
needed to apply judgement in the allocation of such capex.
For other fleet related capex, such as the purchase of
rotable spare parts, the Group is unable to assign these to
a specific aircraft family. As such, the Group has allocated
capex to individual assets based on the proportion of
ASKs for each aircraft family at the operating company
level; and
Opex - For expenditure related to the maintenance and
repair of aircraft, those expenditures that do not form part
of capex, the Group is not able to monitor the expenditure
on an aircraft-by-aircraft basis. Accordingly, the Group
has allocated maintenance and repair expenditure to
individual assets based on the proportion of ASKs for
those compliant aircraft at the operating company level.
A reconciliation has been made to total turnover, capex
and opex to avoid double counting. Further, to avoid double
counting, all maintenance expenditure associated with
aircraft operations, both capitalised and recorded within
operating expenditure, is included in this economic activity
and the economic activity of manufacturing of aircraft
(see below) will only include the revenues associated with
the performance of maintenance activities to parties external
to the Group.
Manufacturing of aircraft
The economic activity for manufacturing of aircraft covers
a wider range of activities including: (i) manufacture;
(ii) repair; (iii) maintenance; (iv) overhaul; (v) retrofitting;
and (vi) repurposing and upgrade of aircraft and aircraft
parts and equipment. While the Group does not manufacture
aircraft, all other aspects of the activities detailed in parts
(ii) to (vi) are undertaken by the Group, both internally
on operating aircraft and externally to third parties as part
of the MRO business operations.
The EU Taxonomy Regulation does not provide definitions
as to the nature of these sub-activities and they do not align
with the industry terminology. Absent such guidance, the
Group has considered that all of the MRO business operations
of the Group would fall under this economic activity, including
airframes, engines and other components of aircraft.
From a technical screening perspective, points (a) to (c) as
described above relating to passenger and freight air transport
economic activities also apply. In addition, the DNSH criteria
are limited to the aforementioned generic criteria and certain
criteria relating to the prevention of waste generation,
maximising the reuse and use of secondary materials and
restrictions on noise pollution.
Having identified the taxonomy-aligned activities, the Group
is required to report the turnover, capex and opex by those
individual services provided. The Group’s accounting policy for
maintenance events differs between those major maintenance
events and those that are considered non-major, with further
details given below:
• Major maintenance events for owned aircraft are capitalised
as incurred and monitored on a project-by-project basis;
• Major maintenance events for leased aircraft are provided for
in advance of the event and monitored on a project-by-
project basis; and
• Those maintenance events considered to be non-major by
nature are expensed as incurred and the associated expenditure
is not monitored on a project-by-project basis. Accordingly,
for the purpose of reporting taxonomy-aligned expenditure,
the total expenditure is allocated based on the total number
of maintenance events on compliant aircraft as a proportion
of total number of non-major maintenance events.
The provision of MRO services to third parties is monitored
on a project-by-project basis. To ensure that maintenance
activities on aircraft are not double counted, only revenues
arising from transactions with parties external to the Group
are included in this economic activity. All capex and opex
associated with the MRO business operations are included
within the economic activity of passenger and freight air
transport. In addition, where one operating company provides
MRO services to another operating company, then the
intercompany expenditure incurred and the intercompany
revenue earned by the provider of the services is eliminated
on consolidation.
During the course of 2024, the Group was unable to meet
the DNSH criteria for reporting KPI alignment on the provision
of MRO services.
Air transport ground handling operations
The economic activity for air transport ground handling
operations covers a wider range of activities that occur
within the operations of the Group, including, but not limited to:
(i) pushback tugs; (ii) equipment for baggage and freight
handling; (iii) vehicles for aircraft marshalling; (iv) equipment
for passenger boarding; (v) de-icing equipment; and
(vi) equipment for catering.
The technical screening criteria are limited to only those
vehicles that have zero CO2 emissions from the tailpipe,
with the DNSH criteria limited to the aforementioned generic
criteria and certain criteria relating to the prevention of waste
generation, recycling of such assets and protection of water
resources associated with de-icing activities.
Across the economic activity, the Group has several thousand
individual assets for which it is not possible to identify the
revenue and expenditure by individual asset. Accordingly, for
2024, the Group has allocated turnover figures based on the
proportion of zero emission vehicles compared to the overall
ground handling fleet.
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KPIs of non-financial undertakings
Proportion of turnover from products or services associated with taxonomy-aligned economic activities – disclosure covering year 2024
Financial year N
Year 2024
Substantial contribution criteria
DNSH criteria (‘Do No Significant Harm’)
(h)
Economic Activities (1)
Code (2)
Turnover (currency € million)
(3)
Proportion of turnover, year
2024 % (4)
Climate change mitigation (5)
Climate change adaptation (6)
Water & Marine Resources (7)
Pollution (8)
Circular economy (9)
Biodiversity & Ecosystems (10)
Climate change mitigation (11)
Climate change adaptation
(12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of taxonomy-
aligned (A.1) turnover, year
2024 (18)
Proportion of taxonomy-
aligned (A.1) turnover, year
2023 (19)
Category enabling activity
(20)
Category transitional activity
(21)
Y; N; N/EL
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (taxonomy-aligned)
Passenger and freight air transport
CCM
6.19
11,190
34.9%
Y
Y
Y
-
Y
Y
-
Y
34.9%
–%
T
Air transport ground handling operations
CCM
6.20
133
0.4%
Y
Y
Y
Y
Y
Y
-
Y
0.4%
–%
T
Turnover of environmentally
sustainable activities (taxonomy-aligned) (A.1)
11,323
35.3%
35.3%
–%
of which enabling
–
0%
–%
–%
E
of which transitional
11,323
100%
100%
–%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (g)
Manufacturing of aircraft
CCM
3.21
820
2.5%
E
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
2.5%
2.3%
T
Passenger and freight air transport
CCM
6.19
18,318
57.1%
E
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
57.1%
89.3%
T
Air transport ground handling operations
CCM
6.20
26
0.1%
E
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
0.1%
0.7%
T
Turnover of taxonomy-eligible but not environmentally sustainable
activities (not taxonomy-aligned activities) (A.2)
19,164
59.7%
59.7%
92.3%
A. Turnover of taxonomy-eligible activities (A.1+A.2)
30,487
95.0%
95.0%
92.3%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of taxonomy-non-eligible activities
1,613
5.0%
TOTAL
32,100
100%
EL – eligible
N/EL – non-eligible
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Proportion of capex from products or services associated with taxonomy-aligned economic activities – disclosure covering year 2024
Financial year N
Year 2024
Substantial contribution criteria
DNSH criteria (‘Do No Significantly
Harm’) (h)
Economic Activities (1)
Code (2)
Capex (currency € million) (3)
Proportion of capex, year 2024 %
(4)
Climate change mitigation (5)
Climate change adaptation (6)
Water & Marine Resources (7)
Pollution (8)
Circular economy (9)
Biodiversity & Ecosystems (10)
Climate change mitigation (11)
Climate change adaptation (12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of Taxonomy-aligned
(A.1.) capex, year 2024 (18)
Proportion of Taxonomy-aligned
(A.1.) capex, year 2023 (19)
Category enabling activity (20)
Category transitional activity (21)
Y; N; N/EL
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (taxonomy-aligned)
Passenger and freight air transport
CCM
6.19
2,318
64.7%
Y
Y
Y
-
Y
Y
-
Y
64.7%
–%
T
Capex of environmentally sustainable activities (taxonomy-aligned) (A.1)
2,318
64.7%
64.7%
–%
T
of which enabling
–
0%
0%
–%
E
of which transitional
2,318
100%
100%
–%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (g)
Passenger and freight air transport
CCM
6.19
461
12.9%
EL
N/
EL
N/
EL
N/
EL
N/
EL
N/
EL
12.9%
86.0%
T
Capex of taxonomy-eligible but not environmentally sustainable
activities
(not taxonomy-aligned activities) (A.2)
461
12.9%
12.9%
86.0%
A. Capex of taxonomy eligible activities (A.1+A.2)
2,779
77.6%
77.6%
86.0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Capex of taxonomy-
non-eligible activities
801
22.4%
TOTAL
3,580
100%
EL – eligible
N/EL – non-eligible
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Proportion of opex from products or services associated with taxonomy-aligned economic activities – disclosure covering year 2024
Financial year N
Year 2024
Substantial contribution criteria
DNSH criteria (‘Do No Significantly
Harm’) (h)
Economic Activities (1)
Code (2)
Opex (currency € million)
(3)
Proportion of opex, year
2024 % (4)
Climate change mitigation
(5)
Climate change adaptation
(6)
Water & Marine Resources
(7)
Pollution (8)
Circular economy (9)
Biodiversity & Ecosystems
(10)
Climate change mitigation
(11)
Climate change adaptation
(12)
Water (13)
Pollution (14)
Circular economy (15)
Biodiversity (16)
Minimum safeguards (17)
Proportion of taxonomy-
aligned (A.1.) opex, year
2024 (18)
Proportion of taxonomy-
aligned (A.1.) opex, year
2023 (19)
Category enabling activity
(20)
Category transitional
activity (21)
Y; N; N/EL
Y/N
%
%
E
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
Opex of environmentally sustainable activities (taxonomy-aligned) (A.1)
Passenger and freight air transport
CCM
6.19
1,558
57.1%
Y
Y
Y
-
Y
Y
-
Y
57.1%
–%
T
Opex of environmentally sustainable activities (taxonomy-aligned) (A.1)
1,558
57.1%
57.1%
–%
of which enabling
–
–%
–%
–%
E
of which transitional
1,558
100%
100%
–%
T
A.2 Taxonomy-eligible but not environmentally sustainable activities (not taxonomy-aligned activities) (g)
Passenger and freight air transport
CCM
6.19
1,115
40.9%
EL
N/EL
N/EL
N/EL
N/EL
N/EL
40.9%
99.0%
T
Opex of taxonomy-eligible but not environmentally sustainable
activities (not taxonomy-aligned activities) (A.2)
1,115
40.9%
40.9%
99.0%
A. Opex of taxonomy eligible activities (A.1+A.2)
2,673
98.0%
98.0%
99.0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Opex of taxonomy-non-eligible activities
56
2.0%
TOTAL
2,729
100%
EL – eligible
N/EL – non-eligible
Strategic Report
Corporate Governance
Financial Statements
Sustainability Statement
EU Taxonomy continued
International Airlines Group | Annual Report and Accounts 2024
332
Registered office
International Consolidated Airlines Group, S.A. El Caserío, Iberia
Zona Industrial nº 2 (La Muñoza) Camino de La Muñoza, s/n,
28042 Madrid, Spain.
Madrid Commercial Registrar tomo 27312, folio 11, hoja
M-492129 C.I.F. A85845535
UK branch registered address
International Airlines Group, Waterside (HAA2), PO Box 365,
Speedbird Way, Harmondsworth, UB7 0GB
Registered in England and Wales: BR014868
UK registrar
Computershare Investor Services PLC
For enquiries relating to shares held through the Corporate
Sponsored Nominee (UK share register):
Tel: +44 370 702 0110
Email: web.queries@computershare.co.uk
Online: www.investorcentre.co.uk/iag
IAG Investor Relations team
Institutional investors: investor.relations@iairgroup.com
Private shareholders: shareholder.services@iairgroup.com
American Depositary Receipt programme
IAG has a Sponsored Level 1 American Depositary Receipt
(ADR) facility that trades on the OTC market in the US
(see www.otcmarkets.com). Deutsche Bank is the ADR
depositary bank.
For shareholder enquiries, contact:
Deutsche Bank Trust Company Americas c/o Equiniti Trust
Company, LLC, Peck Slip Station, PO Box 2050, New York, NY
10272-2050
Email: adr@equiniti.com
Toll free: 800 301 3517 (within the US)
International: +1 718 921 8137
Online: www.adr.db.com
Financial calendar
Financial year end: 31 December 2024
Q1 results: 9 May 2025
Half-year results: 1 August 2025
Q3 results: 7 November 2025
Other key dates can be found on our website:
www.iairgroup.com
ShareGift
UK shareholders with a small number of shares may like
to consider donating their shares to charity under ShareGift,
administered by Orr Mackintosh Foundation. Details are
available from the UK Registrar.
Certain statements included in this report are forward-looking. 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’, ‘continues’, ‘intends’, ‘plans’,
‘targets’, ‘predicts’, ‘estimates’, ‘envisages’ or ‘anticipates’ or other words of similar meaning or their negatives. They include, without
limitation, any and all projections relating to the results of operations and financial conditions 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 scenarios. All
forward-looking statements in this report are based upon information known to the Group on the date of this report and speak as of
the date of this report. Other than in accordance with its legal or regulatory obligations, the Group does not undertake to update or
revise any forward-looking statement to reflect any changes in events, conditions 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 report as a result of any number
of known and unknown risks, uncertainties and other factors, including, but not limited to, economic and geo-political, market,
regulatory, climate, supply chain or other significant external events, many of which are difficult to predict and are generally beyond
the control of the Group, and it is not reasonably possible to itemise each item. Accordingly, readers of this report 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 this report. All forward-looking
statements made on or after the date of this report and attributable to IAG are expressly qualified in their entirety by the primary
risks set out in that section.
Shareholder information
International Airlines Group | Annual Report and Accounts 2024
333
International Airlines Group | Annual Report and Accounts 2024
334
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