Shares in International Airlines Group fell sharply despite the British Airways owner reporting a strong rise in annual profits and improved transatlantic demand. Profits climbed 26 per cent to £3.95 billion in 2025, and the company announced plans to return £1.3 billion to investors, beginning with a £440 million share buyback due to be completed by the end of May.

However, the stock dropped 7.4 per cent as investors reacted to the absence of detailed profit guidance and growing concerns over higher fuel costs. Oil prices reached a seven month high amid fears of conflict in the Middle East, weighing on airline shares globally, with several major American and European carriers also suffering steep declines.

The results follow earlier warnings of softer demand for economy seats on North Atlantic routes, though chief executive Luis Gallego said bookings had rebounded since the third quarter and that first quarter demand was strong. Despite the latest fall, the company’s shares remain about a quarter higher than a year ago.