Financial Report 2024

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Balance sheet at 31 December 2024

(Expressed in thousands of euros)


	Note	2024	2023
ASSETS
NON-CURRENT ASSETS		9.377.367	9.812.384
Intangible assets	6	23.741	6.472
Property, plant and equipment	7	43.587	61.986
Investments in Group companies
Equity instruments	8	7.483.507	7.483.506
Loan receivable from Group companies	9,16	1.655.156	2.102.789
Non-current financial assets
Equity instruments	9	152.972	152.250
Other financial asset		3.625	-
Deferred tax asset	12	14.779	5.381

CURRENT ASSETS		2.791.104	1.588.937
Trade and other receivables
Clients, Group companies	9,16	126.502	187.530
Current tax receivable	12	51.003	7.810
Other receivables	9	23.848	13.554
Investments in Group companies
Loan receivable from Group companies	9,16	207.531	25.824
Cash and cash equivalents
Cash	9,10	138.517	151.605
Cash equivalents	9,10	2.243.703	1.202.614

TOTAL ASSETS		12.168.471	11.401.321

EQUITY AND LIABILITIES
EQUITY		9.290.522	8.645.732
SHAREHOLDERS’ FUNDS
Capital
Registered share capital	11	497.147	497.147
Share premium	11	7.770.439	7.770.439
Reserves
Legal and statutory reserves	11	99.429	99.429
Other reserves	11	163.660	186.132
Own shares and equity holdings	11	(286.777)	(99.333)
Profit/(loss) for the year	3	941.797	(22.749)
Interim dividend		(147.026)	-
Other equity instruments	11	163.711	118.843
VALUATION ADJUSTMENTS
Valuation adjustments to financial assets at fair value through equity	11	87.978	106.562
Translation differences	11	164	(10.738)

LIABILITIES
NON-CURRENT LIABILITIES		1.185.742	1.679.913
Non-current debt
Bond and other marketable securities	9	1.184.800	1.678.905
Deferred tax liability	12	942	1.008

CURRENT LIABILITIES		1.692.207	1.075.676
Current provisions	12	600	600
Current debt
Bond and other marketable securities	9	1.559.632	782.616
Group companies, current	9,16	-	209.137
Trade and other payables
Suppliers, Group companies	9,16	39.572	17.567
Various creditors	9	52.903	39.976
Current tax payable	12	-	248
Other amounts due to tax authorities	12	39.500	25.532

TOTAL EQUITY AND LIABILITIES		12.168.471	11.401.321

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Income statement for the year to 31 December 2024

(Expressed in thousands of euros)


	Note	2024	2023

Continuing operations
Revenue from operations		1.464.314	248.993
Rendering of services to Group companies	13,16	100.884	71.991
Dividend income	16	1.189.253	-
Finance income receivable from debt with Group companies and associates	13,16	174.177	177.002

Employee costs	13	(86.967)	(65.920)
Wages, salaries and other costs		(74.050)	(55.902)
Social security costs		(12.917)	(10.018)

Other operating expenses		(175.778)	(47.762)
External services received		(117.519)	(44.876)
Other operating expenses		(58.259)	(2.886)

Depreciation, amortisation and impairment		(2.445)	-
Amortisation of intangible assets		(2.445)	-

Finance costs		(1.443)	(5.764)
Payable on debt with Group companies and associates	16	(1.443)	(5.764)

OPERATING PROFIT		1.197.681	129.547

Finance income		62.558	54.504
Receivable from third parties	13	62.558	54.504

Finance costs		(59.764)	(63.622)
Payable on debt with third parties	13	(59.764)	(63.622)

Change in fair value of financial instruments	13	(280.488)	(130.119)

Currency differences		(504)	(2.368)

NET FINANCE EXPENSE		(278.198)	(141.605)

PROFIT/(LOSS) BEFORE TAX		919.483	(12.058)
Taxes	12	22.314	(10.691)
PROFIT/(LOSS) FOR THE YEAR	3	941.797	(22.749)

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Statement of changes in equity for the year to 31 December 2024

(Expressed in thousands of euros)


A) Statement of other comprehensive income

	Note	2024	2023

PROFIT/(LOSS) FOR THE YEAR	3	941.797	(22.749)

Income and expenses recognised directly in equity
Fair value movements on other equity investments	9	(18.650)	105.700
Currency differences		10.902	2.135
Tax effect	12	66	(1.008)

TOTAL INCOME AND EXPENSES RECOGNISED DIRECTLY IN EQUITY	11	(7.682)	106.827

TOTAL INCOME AND EXPENSES RECOGNISED		934.115	84.078

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Statement of changes in equity for the year to 31 December 2024

(Expressed in thousands of euros)


B) Statement of changes in equity
	Issued share capital	Share premium	Reserves	Own shares and equity holdings	(Loss)/profit for the year	Interim dividend	Other equity instruments	Valuation adjustments	TOTAL
	Issued share capital	Share premium	Reserves	Own shares and equity holdings	(Loss)/profit for the year	Interim dividend	Other equity instruments	Valuation adjustments	TOTAL

BALANCE AT 31 DECEMBER 2022	497.147	7.770.439	322.250	(28.012)	50.586	-	75.312	(11.003)	8.676.719

Total recognised income and expense	-	-	-	-	(22.749)	-	-	106.827	84.078

Transactions with shareholders and owners	-	-	2.030	(71.321)	-	-	(8.385)	-	(77.676)
Acquisition of treasury shares	-	-	-	(76.716)	-	-	-	-	(76.716)
Vesting of share-based payment schemes	-	-	2.030	5.395	-	-	(8.385)	-	(960)
Other movements in equity	-	-	(89.305)	-	-	-	51.916	-	(37.389)
Share-based payments charge (note 17)	-	-	-	-	-	-	51.916	-	51.916
Reverse merger of Veloz and Vueling (note 8.1)	-	-	(89.305)	-	-	-	-	-	(89.305)
Appropriation of prior year profit	-	-	50.586	-	(50.586)	-	-	-	-

BALANCE AT 31 DECEMBER 2023	497.147	7.770.439	285.561	(99.333)	(22.749)	-	118.843	95.824	8.645.732

Total recognised income and expense	-	-	-	-	941.797	-	-	(7.682)	934.115

Transactions with shareholders and owners	-	-	277	(187.444)	-	(147.026)	(32.513)	-	(366.706)
Acquisition of treasury shares	-	-	-	(210.973)	-	-	-	-	(210.973)
Vesting of share-based payment schemes	-	-	409	23.529	-	-	(32.513)	-	(8.575)
Transaction costs on share buyback	-	-	(132)	-	-	-	-	-	(132)
Dividend	-	-	-	-	-	(147.026)	-	-	(147.026)
Other movements in equity	-	-	-	-	-	-	77.381	-	77.381
Share-based payments charge (note 17)	-	-	-	-	-	-	77.381	-	77.381
Appropriation of prior year loss	-	-	(22.749)	-	22.749	-	-	-	-

BALANCE AT 31 DECEMBER 2024	497.147	7.770.439	263.089	(286.777)	941.797	(147.026)	163.711	88.142	9.290.522

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Cash flow statement for the year to 31 December 2024

(Expressed in thousands of euros)


	Note	2024	2023

CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) for the year before tax
Profit/(loss) from continued operations		919.483	(12.058)

Adjustments to profit/(loss)
Finance income	13	(236.735)	(231.506)
Dividend income		(1.189.253)	-
Finance costs	13	61.207	69.386
Change in fair value of financial instruments	13	280.488	130.119
Currency differences		504	2.368
Share-based payments	17	15.456	10.376
Amortisation of intangible assets		2.445	-
Air Europa Holdings termination settlement payment		50.000	-

Changes in working capital
Trade and other payables		14.724	14.131
Trade and other receivables		134.022	28.807

Other cash flows from operating activities
Interest paid		(782)	(3.022)
Taxation (paid)/received		(24.626)	13.312
Dividend received from Group companies		1.189.253	-

CASH FLOWS FROM OPERATING ACTIVITIES		1.216.186	21.913

CASH FLOWS FROM INVESTING ACTIVITIES
Amounts paid
Purchase of other equity instruments		(19.507)	(5.127)
Purchase of Property, plant and equipment	7	(5.269)	(43.901)
Purchase of Intangible assets	6	(19.553)	(6.426)
Amount paid to Group companies		(118.500)	-
Increase in Other financial assets	9	(3.625)	-
Air Europa Holdings termination settlement payment		(50.000)	-

Amounts received
Proceeds from sale of Property, plant and equipment		26.084	90.485
Interest received		57.648	54.431
Amount received from Group companies		557.785	152.196

CASH FLOWS FROM INVESTING ACTIVITIES		425.063	241.658

CASH FLOWS FROM FINANCING ACTIVITIES

Receipts and payments on equity instruments
Acquisition of treasury shares		(201.609)	(76.716)
Repayment of equity instruments		(9.281)	(9.284)

Repayment
Debt with Credit institutions		(47.500)	(550.000)
Debt with Group companies		(210.331)	(413.820)
Settlement of derivative financial instruments		(87)	-

Dividend payments and receipts from other equity instruments
Dividend paid	3	(147.026)	-

CASH FLOWS FROM FINANCING ACTIVITIES		(615.834)	(1.049.820)

IMPACT OF EXCHANGE DIFFERENCES		2.586	(789)

INCREASE IN CASH AND CASH EQUIVALENTS		1.028.001	(787.038)

Cash and cash equivalents at the beginning of the year	9,10	1.354.219	2.141.257

CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	9,10	2.382.220	1.354.219

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements

1. CORPORATE INFORMATION AND ACTIVITY

International Consolidated Airlines Group, S.A. (hereinafter the ‘Company’ or ‘IAG’) is a Spanish company formed to hold the

interests of airline and ancillary operations, and is registered in Madrid and was incorporated on 17 December 2009. IAG is the

parent company of British Airways, Iberia, Vueling, Aer Lingus, IAG Cargo Ltd (hereinafter ‘IAG Cargo’), IAG GBS, AERL Holding

Limited (hereinafter ‘AERL Holding'), Fly Level S.L., Fly Level Barcelona LH S.L. and IAG Connect all collectively defined as the

‘Group’. The Group presents consolidated financial statements separately. These will be deposited at the Madrid Mercantile

Registry and the FCA in London on 5 March 2025.

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.

(hereinafter ‘Vueling’) was acquired on 26 April 2013 and Aer Lingus Group DAC (hereinafter ‘Aer Lingus’) was acquired on 18

August 2015. During 2017, the Group incorporated Fly Level S.L. (hereinafter 'Fly Level') and IAG Connect Limited (hereinafter

‘IAG Connect’), with a 100% investment by the Company. During 2024 the Group incorporated Fly Level Barcelona LH S.L.

(hereinafter Fly Level Barcelona) acquiring 100% investment.

The objective and main activity, among others, of the Company is the acquisition, ownership, management and disposal of shares

or other equity interests in other companies, provision of management services to those companies, and significant Group

investments including aircraft procurement.

Following a shareholder meeting of Vueling Airlines, S.A. (‘Vueling’) on 29 December 2023, Veloz Holdco S.L.U. (‘Veloz') (legally

absorbed entity) and Vueling (legally absorbing entity) completed a reverse merger in which Vueling absorbed Veloz by means of

the block transfer of the entire assets of Veloz.

Prior to the reverse merger, the Company owned 100% of the share capital of Veloz, which in turn owned 49,39% of Vueling, with

Iberia Líneas Aéreas de España, S.A. Operadora (‘Iberia LAE’) (which the Company owns indirectly through its direct investment

in IB Opco Holding, S.L. (hereinafter 'IB Opco Holding') owning 50,10% and a further 0,51% held by shareholders external to the

Group. Subsequent to the merger, the Company holds a direct investment in Vueling of 49,39%, such that the investment in Veloz

has been allocated proportionally to the shareholding. For further information refer to note 8.1.

IAG is a Spanish Private Law entity, incorporated for an indefinite period by virtue of a public deed granted before the Public

Notary of Madrid Ignacio Martínez-Gil Vich on 17 December 2009 under number 3.866 of his files, with its registered office in

Madrid, at El Caserío, Iberia Zona Industrial nº 2 (La Muñoza), Camino de La Muñoza, s/n, 28042, Madrid, Spain and entered at

the Madrid Mercantile Registry with registration number M-492129 in Volume 27312, Book 0, Section 8, Folio 11.

IAG holds a premium listing on the FTSE’s UK index series. 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’).

The Company's presentation currency is euro. The United Kingdom (‘UK’) branch's functional currency is pound sterling as this is

the currency of the economic environment in which it operates.

2. BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS

Applicable financial reporting framework

The financial statements have been prepared in accordance with the accounting principles approved by Royal Decree 1514/2007,

of 16 November 2007, which was amended in 2016 by Royal Decree 602/2016 of 2 December 2016, and in 2021 by Royal

Decree 1/2021, and the remaining prevailing mercantile law.

These financial statements have been prepared by the Directors of the Company for submission to and for approval at the

General Shareholders’ Meeting, where it is expected they will be approved without modification.

The figures shown in these financial statements are presented in thousands of euros unless otherwise indicated.

Going concern

At 31 December 2024, the Company had cash and cash equivalents of €2.382 million and the Group had total liquidity of €13.362

million (31 December 2023: total liquidity of €11.624 million), comprising cash 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 Company has no financial covenants associated with its loans and borrowings.

In its assessment of going concern, the Company and the Group have 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 the 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 Company and 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 Company and the Group have assumed that the committed and undrawn general facilities of €3.400 million

available to the Group 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;

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

2.BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS continued

• The Group has €2.651 million of capital commitments due to be paid over the period to 31 March 2026;

• the Company and the Group have assumed that the €500 million bond that matures in March 2025 will not be

refinanced;

• the Company and the Group has incorporated the redemption, as detailed in note 19, prior to maturity, of €577 million

from the €500 million 2027 bond and the €700 million 2029 bond;

• while the Company and the Group do not expect to finance all expected deliveries over the going concern period, for

those expected to be financed, the Company and the Group have 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

expected to be financed, including aircraft delivered in 2024 that had not had their financing secured at the balance

sheet date; and

• the shareholder returns detailed in note 19.

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 at least 25% for three

months over the going concern period; reduced passenger unit revenue per 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 draw down, in full, its portion of the available US dollar Revolving Credit Facility. The Directors consider the Downside

Case to be a severe but plausible scenario.

Having reviewed the Base Case and Downside Case, the Directors of the Company have a reasonable expectation that the

Company and the Group have sufficient liquidity to continue in operational existence for a period of at least 12 months from the

date of approval of these financial statements and hence continue to adopt the going concern basis in preparing the financial

statements at 31 December 2024.

2.1. True and fair view

The accompanying financial statements have been prepared from the Company's accounting records in accordance with

prevailing Spanish accounting legislation to give a true and fair view of its equity, financial position and reserves. The cash flow

statement has been prepared to present fairly the origin and usage of monetary assets, such as cash and cash equivalents.

The annual accounts for 2024 shall be submitted for the approval in the Shareholders' Meeting in June 2025, and it is expected

that they will be approved without any modification.

2.2. Comparative information

According to corporate law, the prior year information in the Balance sheet, Income statement, Statement of other comprehensive

income, Statement of changes in equity and Cash flow statement is presented for comparison purposes, in addition to figures for

2024. The notes to the financial statements also include quantitative information for the prior year, unless an accounting standard

specifies that it is not necessary.

The notes to the financial statements for the prior year include reclassifications that were made to conform to the current year

presentation. The amendments have no material impact on the financial statements.

Balance sheet – presentation of convertible bond

As a result of the amendments to IFRS issued by the IASB on 31 October 2022 (Amendments to IAS 1 – Classification of

liabilities as current or non-current), which are considered relevant comparable accounting principles, and in the absence of

specific regulation under Spanish GAAP, the Company changed the presentation of the €825 million convertible bond that

matures in 2028 and reclassified it from a non-current liability to a current liability with the comparative presentation at

31 December 2023 also reclassified. Refer to note 9.2 for further details.

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 bond holders have the irrevocable right to exercise the conversion

feature within 12 months of the balance sheet date, such convertible instruments be presented as current.

2.3. Critical accounting estimates and assumptions

The Directors have prepared the financial statements using estimates and assumptions based on current and historical

experience and various other factors that affect the reported value of the assets and liabilities, and are considered reasonable

under the circumstances. The carrying amount of assets and liabilities, which are not readily apparent from other sources, is

established on the basis of these estimates. The Directors are not aware of any specific risks that might significantly alter the

value of the assets or liabilities in the following year and, therefore, considers that it is not necessary to make estimates of

uncertainty at the end of the reporting period.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

2.BASIS OF PRESENTATION OF THE FINANCIAL STATEMENTS continued

2.3Critical accounting estimates and assumptions continued

Impairment of investments in Group companies

The Company assesses whether there are any indicators of impairment for equity investments in Group companies. An

impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The

recoverable amounts of equity investments in Group companies have been determined based on the future forecast cash flows of

the investments, which require the use of estimates and assumptions, including three year business plan assumptions, long-term

growth rates and discount rates.

Impairment losses can be reversed and recognised in the Income statement if there is any indication that the impairment loss no

longer exists. The reversal is limited to the carrying value of the asset that would have been recognised on the reversal date had

the original impairment not occurred.

Determining whether the Company has significant influence over Air Europa Holdings

The Company 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. Such judgement includes the consideration as to the

ability of the Company 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 Company; enable the interchange of management personnel; and provide essential technical

information.

In forming its judgement, the Company 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; 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 Company has therefore concluded that it does not have significant influence over Air Europa

Holdings.

Accordingly, the Company accounts for its shareholding in Air Europa Holdings as an Equity instrument and measures it at fair

value through other comprehensive income. Had the Company 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.

At 31 December 2024, the fair value of its shareholding in Air Europa Holdings was €139 million. Further information is given in

note 9.1.2.

3. APPROPRIATION OF PROFIT/(LOSS)

The appropriation of the 2023 result was approved in the Shareholders’ Meeting dated 26 June 2024.

The Board of Directors will submit the following proposed appropriation of the 2024 result for approval at the Shareholders'

Meeting in June 2025:


€'000	2024	2023
Proposed appropriation:
Profit/(loss) for the year	941.797	(22.749)
	941.797	(22.749)
Appropriation to:
Interim dividend	147.026	-
Final dividend	288.000	-
Voluntary reserve	506.771	-
Prior year reserves	-	(22.749)
	941.797	(22.749)

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

3.APPROPRIATION OF BASIS OF PROFIT/(LOSS) continued

3.1. Interim dividend

On 1 August 2024 the Board of Directors approved an interim dividend of €0,03 per share. The interim cash dividend was paid on

9 September 2024 for a total amount (net of withholding tax of €27.935.000) of €147.026.000. The withholding tax was paid from

September 2024.

In accordance with article 277 of the Spanish Corporations Law, the following table shows the statement (unaudited) issued by the

Directors to substantiate that the Company had sufficient liquidity to distribute the interim dividend (expressed in thousands of

euros):


Accounting statement	Six months to 30 June 2024

	Amount (€ thousand)
Net profit (after estimated tax) for the period from 1 January to 30 June 2024	277.792
Losses from prior years	-
Mandatory allocations to reserves	-
Distributable income for the period	277.792

Proposed interim dividend (maximum amount)	146.969

Liquidity statement (funds available for distribution)
Cash and cash equivalents	1.942.774
Cash deposits maturing after the payment date of the proposed interim dividend	(360.000)
Estimation of additional net outflows until the payment date of the proposed interim dividend	(38.000)
Payment of Air Europa Holdings termination fee	(50.000)
Available credits	-
Total estimated funds available at the payment date of the proposed interim dividend	1.494.774

3.2. Final dividend

On 27 February 2025 IAG’s Board of Directors proposed a distribution in cash of a final dividend of €0,06 per share. The proposed

final dividend is subject to approval at the annual general meeting and subject to approval, will be recognised as a liability on that

date.

The proposed final dividend would be distributed from net profit for the year to 31 December 2024.


€'000	2024	2023
Cash dividends on ordinary shares declared
Interim dividend for 2024 of €0,03 per share (2023: Nil)	147.026	-

Proposed dividends on ordinary shares
Final dividend for 2024 of €0,06 per share	288.000	-

3.3. Limitations on the distribution of the profit

British Airways 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 2025 to 30

September 2025, 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 were to pay to IAG, would not trigger a payment into NAPS unless NAPS were to move back into technical deficit.

The Company is obliged to transfer 10% of the profit for the year to a legal reserve until this reserve reaches an amount at least

equal to 20% of share capital. Unless the balance of the reserve exceeds this amount, it cannot be distributed to shareholders. As

at 31 December 2024 and 2023 the legal reserve included the minimum amount required by law. The non-distributable reserves at

31 December 2024 are €966.720.000 (2023: €966.720.000).

Once the guidance provided by the law or the statutes has been covered, dividends can only be distributed from profit for the year,

or from distributable reserves, if the value of equity is not or, does not become as a result of the distribution, lower than share

capital. In this case, the profit charged directly to equity cannot be distributed, directly or indirectly. If losses from previous years

existed, that make the Company’s equity lower than share capital, the profits would be used to compensate those losses.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

4. RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES

The main recognition and measurement accounting policies applied in the preparation of the 2024 financial statements are the

following:

4.1. Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of

ownership to the Company. All other lease arrangements are classified as operating leases.

For operating leases, the total minimum payments, measured at inception, are charged to the Income statement in equal annual

amounts over the term of the lease.

4.2. Intangible assets

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.

4.3. Property, plant and equipment

Property, plant and equipment are held at cost. 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.

4.4. Investments in Group companies

Equity investments in Group companies include investments in entities over which the Company has control. On initial recognition

the investments are measured at fair value, which generally is equal to the fair value of the consideration paid, plus directly

attributable transaction costs. Equity investments are subsequently measured at cost less, where appropriate, provisions for

impairment, or distributions received recognised against the cost of the investment, if applicable.

4.5. Impairment of non-financial assets

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.

4.6. Financial instruments

The Company classifies financial instruments on initial recognition as a financial asset, a financial liability or an equity instrument

in accordance with the economic substance of the contractual arrangement and the definitions of a financial asset, a financial

liability and an equity instrument.

The Company recognises a financial instrument when it becomes party to the contract or legal transaction, in accordance with the

terms set out therein, either as the issuer or as the holder or acquirer thereof.

The Company classifies financial instruments into the following categories: financial assets and financial liabilities at fair value

through profit or loss and financial assets and financial liabilities measured at amortised cost.

Other equity investments, on initial recognition, 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.

The Company classifies investments in equity instruments of Group companies and associates, and investments in equity

instruments whose fair value cannot be determined by reference to a quoted price in an active market for an identical asset, or

cannot be reliably estimated, at cost.

All other financial assets are classified at fair value through profit or loss.

The Company designates a financial liability at initial recognition as measured at fair value through profit or loss when doing so

eliminates or significantly reduces a measurement or recognition inconsistency or mismatch that would otherwise arise from

measuring assets or liabilities or recognising the gains and losses on them on different bases.

The Company classifies all other financial liabilities at amortised cost.

i. Offsetting principles

A financial asset and a financial liability are offset only when the Company currently has the legally enforceable right to offset the

recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued

4.6Financial instruments continued

ii. Financial assets and financial liabilities

Financial assets and financial liabilities are classified, upon initial recognition, as measured at amortised cost, 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 holding to collect contractual cash flows and selling.

iii. Derivatives

Derivative financial instruments are initially recognised at fair value on the date the derivative contract is entered into and are

subsequently remeasured at their fair value. The resulting gain or loss arising from remeasurement is recognised in the Income

statement unless the derivative financial instrument has been designated as a hedge of a highly probable expected future cash

flow and is assessed as effective, when gains and losses are recognised in equity.

iv. 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 Company 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 at an amortised cost basis using the effective interest method until extinguished on conversion

or maturity of the bonds, and is recognised within Long-term 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 Company, 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 Long-

term borrowings. At the date of issue, the entirety of the convertible bonds is accounted for at fair value with subsequent fair value

gains or losses recorded within Finance cost in the Income statement. The fair value of such financial instruments is obtained from

their respective quoted prices in active markets.

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.

v. Investments in Group companies and associates

Equity investments in Group companies and associates are measured at the fair value of the consideration given, plus any directly

attributable transaction costs (except fees paid to legal advisors or other professionals, which are taken directly to the income

statement), less any accumulated impairment. Such impairment is calculated as the difference between the carrying amount and

the recoverable amount, which is the higher of fair value less costs to sell and the present value of future cash flows from the

investment. In the absence of better evidence of the recoverable amount, the investee's equity is taken into consideration,

corrected for any unrealised gains existing at the measurement date (including any goodwill).

vi. Equity instruments

Equity instruments are non-derivative financial assets including unlisted investments, excluding interests in associates and joint

ventures. On initial recognition, these equity instruments 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 transaction changes its classification as an Equity instruments. Dividends received on equity

instruments 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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued

4.6Financial instruments continued

vii. Reclassification of financial instruments

The Company reclassifies financial assets when it changes the business model for their management or when they meet or cease

to meet the criteria for classification as an investment in Group companies or associates, or the fair value of an investment ceases

to be or is once again reliable, except for equity instruments classified at fair value through equity, which cannot be reclassified.

The Company does not reclassify financial liabilities.

viii. Interest and dividends

The Company recognises interest and dividends accrued on financial assets after their acquisition as income.

The Company accounts for interest on financial assets carried at amortised cost using the effective interest rate method and

recognises dividends when the Company’s right to receive payment is established.

If the dividends are clearly derived from profits generated prior to the acquisition date because amounts higher than the profits

generated by the investee itself or by any investee thereof since acquisition have been distributed, the carrying amount of the

investment is reduced. This criterion applies irrespective of the measurement criterion used to measure equity instruments.

Therefore, in the case of equity instruments at fair value, the value of the investment is also reduced, and any subsequent

increase in value is recognised in the income statement or in equity, depending on the instrument’s classification.

ix. Impairment of financial assets

A financial asset or a group of financial assets is impaired and impairment losses are incurred if there is objective evidence of

impairment as a result of one or more events that occurred after the initial recognition of the asset and the event or events have

an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

The Company recognises impairment on financial assets at amortised cost when estimated future cash flows are reduced or

delayed due to debtor insolvency.

For equity instruments, objective evidence of impairment exists when the carrying amount of an asset is uncollectible due to a

significant or prolonged decline in its fair value.

• Impairment of financial assets carried at amortised cost.

The amount of the impairment loss of financial assets carried at amortised cost is measured as the difference between the asset’s

carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred)

discounted at the financial asset’s original effective interest rate. For variable income financial assets, the effective interest rate

corresponding to the measurement date under the contractual conditions is used. Nevertheless, the Company uses the market

value, providing this is sufficiently reliable to be considered representative of the recoverable amount.

The impairment loss is recognised in profit or loss and may be reversed in subsequent periods if the decrease can be objectively

related to an event occurring after the impairment has been recognised. The loss can only be reversed to the limit of the

amortised cost of the assets had the impairment loss not been recognised.

The Company directly reduces the carrying amount of a financial asset when it has no reasonable expectations of recovering the

financial asset in its entirety or a portion thereof.

• Impairment of investments in Group companies, associates and equity instruments carried at cost.

Impairment is calculated by comparing the carrying amount of the equity investment with its recoverable amount. The recoverable

amount is the higher of value in use and fair value less costs to sell.

Value in use is calculated based on the Company’s share of the present value of future cash flows expected to be derived from

ordinary activities and from the disposal of the asset, or the estimated cash flows expected to be received from the distribution of

dividends and the final disposal of the investment.

Nonetheless, and in certain cases, unless better evidence of the recoverable amount of the equity investment is available, when

estimating impairment of these types of assets, the investee’s equity is taken into consideration, adjusted, where appropriate, to

generally accepted accounting principles and standards in Spain, corrected for any net unrealised gains existing at the

measurement date. If the investee forms a subgroup of companies, the equity shown in the consolidated annual accounts is taken

into account, provided that these accounts have been authorised for issue. Otherwise, the equity reflected in the individual annual

accounts is considered.

The carrying amount of the equity investment includes any monetary item that is receivable or payable for which settlement is

neither planned nor likely to occur in the foreseeable future, excluding trade receivables or trade payables.

In subsequent years, reversals of impairment losses in the form of increases in the recoverable amount are recognised, up to the

limit of the carrying amount that would have been determined for the investment if no impairment loss had been recognised.

Impairment losses are recognised and reversed in the income statement.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued

4.6Financial instruments continued

x. Derecognition and modifications of financial liabilities

The Company derecognises all or part of a financial liability when it either discharges the liability by paying the creditor, or is

legally released from primary responsibility for the liability either by process of law or by the creditor.

The exchange of debt instruments between the Company and the counterparty or substantial modifications of initially recognised

liabilities are accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability,

provided that the instruments have substantially different terms. The Company considers the terms to be substantially different if

the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and

discounted using the original effective interest rate, is at least 10% different from the discounted present value of the remaining

cash flows of the original financial liability.

If the exchange is accounted for as an extinguishment of the financial liability, any costs or fees incurred are recognised as part of

the gain or loss on the extinguishment. If the exchange is not accounted for as an extinguishment, any costs or fees incurred

adjust the carrying amount of the liability and are amortised at amortised cost over the remaining term of the modified liability. In

the latter case, a new effective interest rate is determined on the modification date, calculated as the rate that equates the present

value of the flows payable under the new terms to the carrying amount of the financial liability at that date.

The difference between the carrying amount of a financial liability, or part of a financial liability, extinguished or transferred to

another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit

or loss. If the Company transfers non-monetary assets in settlement of the debt, the difference between their fair value and their

carrying amount is recognised as results from operating activities, and the difference between the value of the debt being settled

and the fair value of the assets as net finance income/cost. If the Company transfers inventories, the corresponding sale

transaction is recognised at their fair value and the change in inventories at their carrying amount.

4.7. 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.

4.8. Cash and cash equivalents

Cash and cash equivalents includes 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.

4.9. Foreign currency translation

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.

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 until all or part of the interest is sold, when the relevant portion of

the cumulative exchange difference is recognised in the Income statement.

4.10. Corporate tax

From 1 January 2015 onwards the Spanish entities International Consolidated Airlines Group S.A., Vueling Airlines S.A., Avios

Group Limited Sucursal en España, IAG GBS Limited Sucursal en España and IAG Cargo Limited Sucursal en España, filed

consolidated tax returns as part of the Spanish tax unity (0061/15, pursuant to title VII, Chapter VI of the Spanish Corporate

Income Tax Law set forth in the Law 27/2014 of 27 November 2014). Fly Level S.L. joined the tax unity on 7 November 2017.

Yellow Handling S.L.U. joined the tax unity on 17 October 2019. From 1 January 2020 Vueling and Yellow Handling S.L.U. ceased

to be part of the Spanish tax unity due to modifications in their shareholding.

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 difference arises from the initial recognition of goodwill or of an asset or liability in a transaction

that is not a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;

• 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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

4.RECOGNITION AND MEASUREMENT ACCOUNTING POLICIES continued

4.10Corporate tax continued

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.

Top-up tax

The Company's current income tax expense includes the tax related to the minimum effective taxation of multinational enterprise

groups (OECD model rules or Pillar Two, hereinafter the "Top-up Tax"), in respect of which the Company is a taxable person and

taxpayer.

If the Company is a substitute taxpayer, then the current income tax expense accrued on behalf of the taxpayer is recognised as a

receivable from group companies.

If the Company is a taxable person and taxpayer in respect of the Top-up Tax, but the parent acts as a substitute taxpayer of the

Company, the latter recognises the accrued current income tax expense with a credit to an account payable to group companies.

The Company recognises the accrual of the Top-up Tax expense with a credit to non-current tax liabilities in the balance sheet.

The Company has applied the exception to the recognition and disclosure of deferred tax assets and liabilities related to the Top-

up Tax.

4.11. Revenue and expense recognition

The Company presents the income from rendering management services to Group companies, dividends received from Group

Companies and financial income from financing granted to them as Revenue from operations.

4.12. 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

Company does not recognise a provision, but discloses the matter as a contingent liability. The Company assesses whether each

matter is probable of there being an outflow of economic resources to settle the obligation at each balance sheet date.

4.13. Long-term remuneration to personnel

The Company offers a defined contribution pension plan to all IAG employees. A defined contribution plan is a pension plan under

which the Company pays fixed contributions into a separate entity. The Company 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. Current service costs are recognised within the Income statement in the year in which they arise. At each

financial year end, accrued contributions payable are recognised in the Balance sheet.

4.14. Share-based payment transactions

The Company operates a number of equity-settled, share-based payment plans, under which the Company awards equity

instruments of the Company 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 (note 17). 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.

4.15. Dividends

Interim dividends are recognised when they are paid and final dividends are recognised when authorised in general meetings by

shareholders.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

4.16. Related parties

Transactions between group companies, except those related to mergers and non-cash contributions of businesses where

particular regulations apply, including investments in group companies, are recognised at the fair value of the consideration given

or received. The difference between fair value and the transaction price is recognised either as a contribution or a dividend

distribution. However, the amount which is not realised in proportion to the percentage interest held in the group company is

recognised as an income or expense.

In the transactions where the aforementioned particular regulations apply, the values of the net assets received must be those that

come from consolidated accounts of the group or of the larger sub-group in which the assets and liabilities are included and

whose parent company is Spanish. If the aforementioned financial statements are not prepared under one of the exemptions

considered in the consolidation rules, the values to be used shall be those existing prior to the transaction in the separate financial

statements of the transferring or acquired company.

4.17. Classification of assets and liabilities between current and non-current

Assets and liabilities are presented in the Balance sheet as either current or non-current. The assets and liabilities are classified

as current when linked to the normal operating cycle of the Company.

When an asset or liability is not linked to the normal operating cycle but the Company expects the asset or liability to mature or

liquidate, or plans to dispose of the asset or liability within 12 months, then these are also classified as current when they are

maintained for the purposes of operations, or the instrument is related to cash and cash equivalents.

Any asset or liability whose use is restricted to beyond one year is classified as non-current.

5. LEASES

The Company has a property in Madrid which is leased from Iberia with an annual renewal. The contract has an option to review

the duration of the lease on an annual basis. The Company also has an office in London which is leased from British Airways. The

lease expires in 2025.

The annual cost of the leases is €700.000 (2023: €617.000). The amount of future minimum lease payment is €710.000 (2023:

€623.000) for less than one year and €nil (2023: €484.000) for between one year and two years.

6. INTANGIBLE ASSETS


€'000	1 January	Additions	Exchange movements	Transfers	31 December
2024
Cost
Computer software	-	-	-	13.785	13.785
Computer applications in progress	6.472	19.553	277	(13.887)	12.415
	6.472	19.553	277	(102)	26.200
Amortisation
Computer software	-	2.430	29	-	2.459
Computer applications in progress	-	-	-	-	-
	-	2.430	29	-	2.459
Net book value
Computer software	-	(2.430)	(29)	13.785	11.326
Computer applications in progress	6.472	19.553	277	(13.887)	12.415
	6.472	17.123	248	(102)	23.741
2023
Cost
Computer applications in progress	-	6.472	-	-	6.472
	-	6.472	-	-	6.472
Net book value
Computer software	-	-	-	-	-
Computer applications in progress	-	6.472	-	-	6.472
	-	6.472	-	-	6.472

In 2024 the Company acquired computer developments or programmes from third parties for a total of €19.553.000 (2023:

€6.472.000) of which €13.785.000 (2023: €nil) have been put into operation.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

7. PROPERTY, PLANT AND EQUIPMENT


€'000	1 January	Additions	Exchange movements	Transfers	31 December
2024
Cost
Fleet¹	61.986	5.269	2.654	(26.412)	43.497
Computer equipment	-	-	3	102	105
	61.986	5.269	2.657	(26.310)	43.602
Amortisation and depreciation
Computer equipment	-	15	-	-	15
	-	15	-	-	15
Net book value
Fleet¹	61.986	5.269	2.654	(26.412)	43.497
Computer equipment	-	(15)	3	102	90
	61.986	5.254	2.657	(26.310)	43.587
2023
Net book value
Fleet	83.046	43.901	869	(65.830)	61.986
	83.046	43.901	869	(65.830)	61.986
1Relates to pre-delivery payments made on aircraft.

Capital expenditure authorised and contracted for but not provided for in the financial statements was €2.699.036.000 (2023:

€2.305.811.000) in relation to fleet purchases. The capital expenditure is denominated in US dollars, and as such is subject to

changes in exchange rates.

8. EQUITY INVESTMENTS IN GROUP COMPANIES

The details and movement of individual items that comprise this section are:


€'000	1 January	Additions	31 December
2024
Equity instruments
Cost	8.096.275	1	8.096.276
Distribution received	(342.766)	-	(342.766)
Impairment	(270.003)	-	(270.003)
	7.483.506	1	7.483.507
2023
Equity instruments
Cost	8.185.959	(89.684)	8.096.275
Distribution received	(342.766)	-	(342.766)
Impairment	(270.003)	-	(270.003)
	7.573.190	(89.684)	7.483.506

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

8.EQUITY INVESTMENTS IN GROUP COMPANIES continued

8.1. Description of the main movements

On 16 July 2024 LEVEL BCN was incorporated and the Company subscribed to 49,90% of the share capital with IB Opco Holding

subscribing to the other 50,10%. The total amount paid for the shares was €1.497.

Prior year movements

Following a shareholder meeting of Vueling on 29 December 2023, Veloz (legally absorbed entity) and Vueling (legally absorbing

entity) completed a reverse merger in which Vueling absorbed Veloz by means of the block transfer of the entire assets of Veloz.

As a result of the merger, Veloz ceased to exist. The reverse merger was carried out in accordance with the provisions set forth in

Book One, on the Transposition of the European Union Directive regarding Structural Changes in Commercial Companies, of the

Royal Decree-Law 5/2023, of 28th June, with the Company exchanging all of the shares of Veloz in exchange for 14,775,037

shares in Vueling of €1 nominal value. The deed executing the merger was filed for registration in the Mercantile Registry of

Barcelona on 29 December 2023.

Prior to the reverse merger, the Company owned 100% of the share capital of Veloz, which in turn owned 49,39% of Vueling,

Iberia LAE (which the Company owns indirectly through its direct investment in IB Opco Holding) owning 50,10% and a further

0,51% held by shareholders external to the Group. Subsequent to the merger, the Company holds a direct investment in Vueling

of 49,39%, such that the investment in Veloz has been allocated proportionally to the shareholding. This resulted in the following

accounting impact: (i) the de-recognition of the direct investment in Veloz of €166.139.000; (ii) a direct investment in Vueling of

€37.961.000; (iii) an increase in the investment in IB Opco Holding of €33.259.000; (iv) an increase in the investment in British

Airways of €5.235.000; (v) the recognition of a charge to the voluntary reserve in equity of €89.305.000; and (vi) a charge of

€379.000 being recorded in Finance costs in the Income statement reflecting the proportion relating to the non-controlling third

party shareholders.

8.2. Details of investments

Information at 31 December on the Group companies, prepared in accordance with International Financial Reporting Standards, is

as follows:


	Business activity	Percentage of ownership¹	Capital	Reserves	Profit/ (loss) after tax for the year	Total shareholders' equity	Operating profit/ (loss)	Dividend received during the year	Net book value €'000
	Business activity	Percentage of ownership¹	Capital	Reserves	Profit/ (loss) after tax for the year	Total shareholders' equity	Operating profit/ (loss)	Dividend received during the year	Net book value €'000
2024
€’000
Iberia	Airline operations	Indirect	66.717	(42.939)	745.034	768.812	670.500	-	-
IB Opco Holding	Holding company	100%	10	1.601.308	779.967	2.381.285	791.100	610.246	2.421.807
Aer Lingus	Airline operations	Indirect³	27.615	95.482	137.842	260.939	205.024	-	-
Vueling	Airline operations	99,5%²	29.905	(390.439)	241.002	(119.532)	400.082	-	37.961
AERL Holding	Holding company	100%	760.000	524.016	(2.984)	1.281.032	-	-	836.000
LEVEL6	Airline operations	100%	185.003	(172.327)	2.390	15.066	1.363	-	-
Fly Level Barcelona	Airline operations	Indirect⁵	3	-	(743)	(740)	(644)		1
£’000
British Airways	Airline operations	100%	290.000	2.138.000	2.389.000	4.817.000	2.060.000	483.434	4.160.632
IAG Cargo	Air freight operations	100%	-	9.139	1.498	10.637	1.779	-	-
IAG GBS	IT, finance, procurement services	100%	20.000	(26.701)	1.120	(5.581)	1.879	-	22.218
IAG Connect	Inflight eCommerce platform	100%	-	4.325	118	4.443	35	-	4.888
Polish złoty '000
IAG GBS Poland	IT, finance, procurement services	1%⁴	-	11.056	2.094	13.150	3.690	-	-

Other Group companies			n/a	n/a	n/a	n/a	n/a	n/a	n/a
									7.483.507

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

8.EQUITY INVESTMENTS IN GROUP COMPANIES continued

8.2Details of investments continued


	Business activity	Percentage of ownership¹	Capital	Reserves	Profit/ (loss) after tax for the year	Total shareholders' equity	Operating profit/ (loss)	Dividend received during the year	Net book value €'000
	Business activity	Percentage of ownership¹	Capital	Reserves	Profit/ (loss) after tax for the year	Total shareholders' equity	Operating profit/ (loss)	Dividend received during the year	Net book value €'000
2023
€’000
Iberia	Airline operations	Indirect	66.717	(91.550)	803.929	779.096	778.075	-	-
IB Opco Holding	Holding company	100%	10	2.294.733	15.192	2.309.935	(63)	-	2.421.807
Aer Lingus	Airline operations	Indirect³	27.615	(58.132)	173.877	143.360	225.008	-	-
Vueling	Airline operations	99,5%²	29.905	(732.785)	290.603	(412.277)	396.051	-	37.961
AERL Holding	Holding company	100%	760.000	526.791	(2.775)	1.284.016	-	-	836.000
LEVEL6	Airline operations	100%	185.003	(178.005)	5.678	12.676	(451)	-	-
£’000
British Airways	Airline operations	100%	290.000	1.149.000	1.161.000	2.600.000	1.431.000	-	4.160.632
IAG Cargo	Air freight operations	100%	-	7.219	1.009	8.228	2.977	-	-
IAG GBS	IT, finance, procurement services	100%	20.000	(30.411)	2.291	(8.120)	2.836	-	22.218
IAG Connect	Inflight eCommerce platform	100%	-	4.208	117	4.325	125	-	4.888
Polish złoty '000
IAG GBS Poland	IT, finance, procurement services	1%⁴	-	8.350	2.705	11.055	4.003	-	-

Other Group companies			n/a	n/a	n/a	n/a	n/a	n/a	n/a
									7.483.506

1IAG directly holds 90,02% and 86,45% of the economic rights in British Airways and Iberia respectively. The remaining economic

ownership of both companies is indirectly held by IAG through the cross-holdings between British Airways and Iberia.

IAG, including through British Airways’ shareholding, holds 49,9% of the total nominal share capital and of 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 two companies. The remaining shares, representing 50,1% of the total nominal share

capital and of the total number of voting rights belong to Garanair, S.L., a Spanish company incorporated for the purposes of

implementing the Spanish nationality structure.

IAG, including through Iberia’s shareholding, 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, correspond to a trust established for the purposes of implementing

the British Airways nationality structure.

2 IAG holds a total investment of 99,49% in Vueling, 49,39% held directly and 50,10% held through its subsidiary IB Opco Holding.

3IAG holds 49,75% of the total number of voting rights and almost 100% of the economic rights in Aer Lingus. The remaining

voting rights, representing 50,25%, correspond to a trust established for implementing the Aer Lingus nationality structure.

4 IAG holds a direct investment of 1% in IAG GBS Poland and an indirect investment of 99% through IAG GBS.

5 IAG holds a total investment of 100% in Fly Level Barcelona, 49,90% held directly and 50,10% held through its subsidiary IB

Opco Holding.

6 LEVEL includes Fly Level S.L and its subsidiary Fly Level UK Limited.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

8.EQUITY INVESTMENTS IN GROUP COMPANIES continued

8.2Details of investments continued

British Airways’ registered office is at Waterside, PO Box 365, Harmondsworth, Middlesex, UB7 0GB, United Kingdom. The main

activity of British Airways is the operation of international and domestic air services for the carriage of passengers and cargo. In

addition it provides aircraft maintenance services.

Iberia’s registered office is at Calle Martínez Villergas 49, 28027, Madrid, Spain. The main business of Iberia is the operation of

international and domestic air services for the carriage of passengers and cargo. In addition it provides ancillary services including

aircraft maintenance and handling services.

Vueling’s registered office is at Calle Catalunya 83, Viladecans, 08840, Barcelona, Spain. The main business of Vueling consists

of the the operation of international and domestic air services for the carriage of passengers.

IAG Cargo’s registered office is at Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow Airport, Hounslow,

Middlesex, TW6 2JS, United Kingdom. The principal activity of IAG Cargo is commercial sales, support and management services

in the provision of air freight on the British Airways, Iberia and Aer Lingus networks.

IAG GBS’s registered office is at Waterside (HAA2), PO Box 365, Harmondsworth, Middlesex, UB7 0GB, United Kingdom. The

principal activity is the provision of business services to the IAG Group.

IAG GBS Poland’s registered office is at ul. Opolska 114, 31-323 Kraków, Poland. The principal activity is the provision of

business services to the IAG Group.

AERL Holding’s registered office is at Waterside (HAA2), PO Box 365, Harmondsworth, Middlesex, UB7 0GB, United Kingdom.

The principal activity is acquisition and holding of equity interests in Aer Lingus Group DAC and the management and disposition

of such equity interests.

Fly Level S.L.'s registered offices are at El Caserío, Camino de la Muñoza s/n, Iberia zona Industrial no 2, 28042 Madrid, Spain.

The principal activity is airline operations.

Fly Level Barcelona LH S.L’s registered offices are at Calle Catalunya, 83, Viladecans, Barcelona, 08840, Spain. The principal

activity is passenger air transport.

IAG Connect Limited’s registered office is at Dublin Airport, County Dublin, Republic of Ireland. The principal activity is the

provision of the Group’s inflight eCommerce platform.

In accordance with article 155 of the Spanish Companies Law (Ley de Sociedades de Capital), the Company has duly notified the

above mentioned subsidiaries of the acquisition of their share capital.

8.3. Impairment review

The principal equity investments in Group companies comprise British Airways, Iberia, Vueling and AERL Holding (the holding

company of Aer Lingus).

Basis for calculating recoverable amount

The recoverable amounts of Company’s investments 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 the pre-tax discount rate for each investment.

Annually the relevant operating companies 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. 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.

Impact of climate change on the Company’s investment impairment analysis

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 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. These adjustments are limited to

those that: (i) the Group can reliably estimate at the balance sheet date; (ii) only relate to the Group’s existing asset base in its

current condition; and (iii) incorporate expected 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 Company’s investment 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 of 10% of the overall fuel mix; (ii) forecast cost of carbon,

including SAF, ETS allowances and CORSIA allowances (all derived from externally sourced or derived information); (iii) the

removal of existing free ETS allowances issued by 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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

8.EQUITY INVESTMENTS IN GROUP COMPANIES continued

8.3Impairment review continued

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 Company 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 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; (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.

Given the inherent uncertainty associated with the impact of climate change, the Company and the Group have applied additional

sensitivities below 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, operating margins and the increased fuel price sensitivity

Key assumptions

The value-in-use calculations for each investment 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 investments the key assumptions

used in the value-in-use calculations are as follows


Per cent	2024
Per cent	British Airways	Iberia	Vueling	Aerl Holding
Operating margin¹	12-16	11-13	8-10	8-13
Average ASK growth per annum¹	0-8	2-7	1-8	2-3
Long-term growth rate	1,8	1,4	1,0	1,3
Pre-tax discount rate	11,3	11,6	13,7	10,7


Per cent	2023
Per cent	British Airways	Iberia	Vueling	Aerl Holding
Operating margin¹	7-14	7-14	4-12	6-14
Average ASK growth per annum¹	3-9	5-11	1-6	2-16
Long-term growth rate	1,7	1,5	0,9	1,3
Pre-tax discount rate	11,2	12,4	14,3	10,9

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 investment, 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.

The airlines’ network plans 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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

8.EQUITY INVESTMENTS IN GROUP COMPANIES continued

8.3Impairment review continued

Pre-tax discount rates represent the current market assessment of the risks specific to each investment, 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 Group and the investment. 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 investors and loyalty scheme investors and the cost of debt is derived from both

market data structure and industry gearing levels derived from comparable companies. Investment 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 Company 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, UK ETS allowances and CORSIA allowances, respectively, per tonne of CO2 equivalents

emitted; and (iv) the removal of all free ETS and CORSIA allowances.

Summary of results

At 31 December 2024 and 31 December 2023 management reviewed the recoverable amount of each of the investments and

concluded the recoverable amounts exceeded the carrying values.

Reasonable possible changes in key assumptions, both individually and in combination, have been considered for each

investment, where applicable, which include reducing the operating margin by 2 percentage points in each year, reducing ASKs by

5% 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, in addition to those incorporated in the impairment modelling,

of climate change on the recoverability of the Company's investments

For the British Airways, Iberia, Vueling and AERL Holding investments, while the recoverable amounts are estimated to exceed

the carrying amounts by €24.952 million, €10.305 million, €1.329 million and €2.251 million (2023: €19.803 million, €8.124 million,

€746 million and €2.384 million), respectively, the recoverable amounts would equal the carrying amounts when applying

reasonable possible but not probable changes 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 51% (2023:

32%); and (ii) if the fuel price had been 58% (2023: 37%) higher;

• Iberia: if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 45% (2023: 29%); and

(ii) if the fuel price had been 49% (2023: 34%) higher;

• Vueling: (i) if ASKs had been 5% lower combined with a fuel price increase without cost recovery of 36% (2023: 16%);

and (ii) if the fuel price had been 43% (2023: 22%) higher; and

• AERL Holding: (i) if ASKs had been 5% lower combined with a fuel price increase of 25% (2023: 23%); and (ii) if the fuel

price had been 32% (2023: 29%) higher without cost recovery.

For the remainder of the reasonable possible changes in key assumptions applied to the British Airways, Iberia, Vueling and AERL

Holding investments and for all the reasonable possible changes in key assumptions applied to the remaining investments, no

impairment arises.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

9. FINANCIAL INSTRUMENTS

9.1. Financial assets

Details of the Company’s financial assets at 31 December by nature and classification for measurement purposes is as follows:


At 31 December 2024	Financial assets at amortised cost	Financial assets at fair value through Other comprehensive income	Total
€'000	Financial assets at amortised cost		Total
Non-current assets
Loan receivable from Group company (note 16.1)	1.655.156	-	1.655.156
Other financial asset	3.625	-	3.625
Investment in other equity instruments (note 9.1.2)	-	152.972	152.972
	1.658.781	152.972	1.811.753
Current assets
Trade and other receivables (note 9.1.1)	150.350	-	150.350
Loan receivable from Group company (note 16.1)	207.531	-	207.531
Cash and cash equivalents (note 10)	2.382.220	-	2.382.220
	2.740.101	-	2.740.101


At 31 December 2023	Financial assets at amortised cost	Financial assets at fair value through Other comprehensive income	Total
€'000	Financial assets at amortised cost		Total
Non-current assets
Loan receivable from Group company (note 16.1)	2.102.789	-	2.102.789
Investment in other equity instruments (note 9.1.2)	-	152.250	152.250
	2.102.789	152.250	2.255.039
Current assets
Trade and other receivables (note 9.1.1)	201.084	-	201.084
Loan receivable from Group company (note 16.1)	25.824	-	25.824
Cash and cash equivalents (note 10)	1.354.219	-	1.354.219
	1.581.127	-	1.581.127

9.1.1. Trade and other receivables

The breakdown of trade and other receivables at 31 December is as follows:


€'000	2024	2023
Current
Receivables from Group companies (note 16.1)	126.502	187.530
Other receivables	23.848	13.554
	150.350	201.084

9.1.2. Non-current investments in other equity instruments

Non-current investments in other equity instruments at 31 December is as follows:


€'000	2024	2023
Cost
Unlisted investments	152.972	152.250
	152.972	152.250

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

9.FINANCIAL INSTRUMENTS continued

9.1Financial assets continued

Investment in Air Europa Holdings

On 15 June 2022, the Company entered into a financing arrangement with Globalia Corporación Empresarial, S,A, (‘Globalia’),

whereby, the Company 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, S.L. (‘Air Europa Holdings’), a wholly owned subsidiary of

Globalia. Subsequently, on 16 August 2022, the Company 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 Company 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 Company withdrew from the agreement. Up until the Company

withdrew from the agreement, the recognition criteria of NRV 21ª Business combinations had not been met.

As a result of the Company withdrawing from the agreement with Globalia, the Company was required to pay a break-fee to

Globalia of €50 million, which has been recognised as as a charge to other operating expenses.

At 31 December 2024, the fair value of the investment in Air Europa Holdings was €139 million, representing a 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 tax effect of this is a deferred tax liability of €66.000 recorded in other comprehensive income.

The Company, 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 Company 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.

9.2. Financial liabilities

Details of the Company’s financial liabilities at 31 December by nature and classification for measurement purposes is as follows:


€'000	2024	2023
Non-current liabilities
Bonds and other marketable securities	1.184.800	1.678.905
	1.184.800	1.678.905
Current liabilities
Trade and other payables (note 9.2.1)	52.903	39.976
Group companies (note 16.1)	39.572	226.704
Bond and other marketable securities	544.115	47.500
Convertible bond¹	1.015.517	735.116
	1.652.107	1.049.296

1The 2023 financial liabilities 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.

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.

On 25 March 2021, two senior unsecured bonds were issued by the Group for an aggregate principal amount of €1,2 billion; €500

million fixed rate 2,75% due in 2025, and €700 million fixed rate 3,75% due in 2029.

Details of the 2028 convertible bond

On 11 May 2021, the Company 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 Company 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 includes 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 the

Company. The Company 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 the Company. The bondholders’ conversion right is

currently exercisable.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

9.FINANCIAL INSTRUMENTS continued

9.2Financial liabilities continued

The convertible bond is recorded at its fair value, which at 31 December 2024 was €1.015.517.000 (2023: €735.116.000),

representing a increase of €280.401.000 since 1 January 2024.

9.2.1. Trade and other payables

The breakdown of trade and other payables at 31 December is as follows:


€'000	2024	2023
Current trade and other payables
Various creditors	52.903	39.976
	52.903	39.976

9.2.2. Average payment days to suppliers

The information on average period for payment to suppliers in commercial transactions at 31 December is as follows:


Days	2024	2023
Average days for payment to suppliers	66	63
Ratio of transactions paid	66	67
Ratio of transactions outstanding for payment	60	42

€'000	2024	2023
Total payments made	62.506	33.989
Total payments outstanding	2.247	5.718
Information on invoices paid in a period shorter than the maximum period established in the late payment regulations
	2024	2023
Total payments made	28.003	13.083
Percentage share of total payments to suppliers	45%	38%
Number of invoices paid	1.061	531
Percentage share of total number of invoices paid	43%	36%

9.3. Fair value of financial assets and financial liabilities

The fair values of the Company’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.

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.

The fair value of cash and cash equivalents, other current interest-bearing deposits, and trade and other payables and receivables

approximate their carrying value largely due to the short-term maturities of these instruments.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

9.FINANCIAL INSTRUMENTS continued

9.3Fair value of financial assets and financial liabilities continued

The fair values and carrying amounts of the Company’s financial assets and liabilities at 31 December 2024 are as follows:


2024	Fair value				Carrying value
€'000	Level 1	Level 2	Level 3	Total	Total
Financial assets
Loan receivable from Group companies	-	1.862.687	-	1.862.687	1.862.687
Other financial assets	-	-	3.625	3.625	3.625
Equity instruments	-	-	152.972	152.972	152.972

Financial liabilities
Bond and other marketable securities¹	2.706.509	-	-	2.706.509	2.744.432
Loan payable to Group companies	-	-	-	-	-

The fair values and carrying amounts of the Company’s financial assets and liabilities at 31 December 2023 were as follows:


2023	Fair value				Carrying value
€'000	Level 1	Level 2	Level 3	Total	Total
Financial assets
Loan receivable from Group companies	-	2.128.613	-	2.128.613	2.128.613
Equity instruments	-	-	152.250	152.250	152.250

Financial liabilities
Bond and other marketable securities¹	2.373.395	-	-	2.373.395	2.461.521
Loan payable to Group companies	-	209.137	-	209.137	209.137

1Bond and other marketable securities includes the convertible bond.

Bonds and other marketable securities, with the exception of the IAG €825 million convertible bond due 2028 which is measured

at fair value, are measured at amortised cost. Loans with Group companies are measured at amortised cost.

Level 3 financial assets reconciliation

The following table summarises key movements in Level 3 financial assets:


€'000	% Holding	1 January	Additions	Valuation adjustments	Exchange movements	31 December
2024
Air Europa Holdings	20	129.300	16.250	(7.050)	-	138.500
Other		22.950	3.257	(11.600)	(135)	14.472
		152.250	19.507	(18.650)	(135)	152.972
2023
Air Europa Holdings	20	23.600	-	105.700	-	129.300
Other		17.823	5.088	-	39	22.950
		41.423	5.088	105.700	39	152.250

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

10. CASH AND CASH EQUIVALENTS

The cash and cash equivalents as at 31 December is as follows:


€'000	2024	2023
Cash at bank	138.517	151.605
Cash equivalents	2.243.703	1.202.614
	2.382.220	1.354.219

There are no restrictions on the use of the amounts included in these captions.

At 31 December 2024 and 2023, the Company had no outstanding bank overdrafts.

11. EQUITY – CAPITAL AND RESERVES

11.1. Share capital

At 31 December 2024, the share capital of the Company amounts to €497.147.000, divided into 4.971.476.000 ordinary shares of

the same class and series and with a nominal value of 0,10 € each, fully subscribed and paid.

Details of shareholders and their equity based on their declaration at 31 December is as follows:


Per cent		2024	2023
Significant shareholders:
	Qatar Airways (Q.C.S.C.)	24,995	25,143
	Capital Research and Management Company	5,001	5,001
	Hargreaves Lansdown Plc	3,122	4,023
Other shareholders		66,882	65,833
		100	100

The share capital and premium for the Company is as follows:


	Number of shares	Share capital	Share premium
	000s	€'000	€'000
At 31 December 2024: Ordinary shares of 0,10 € each	4.971.476	497.147	7.770.439
At 31 December 2023: Ordinary shares of 0,10 € each	4.971.476	497.147	7.770.439

11.2. Reserves and prior year results

Details of movements through reserves for the years to 31 December is as follows:


€'000	1 January	Appropriation of prior year profit/(loss)	Vesting of share based payments	Share buyback transaction costs	Reverse merger of Veloz and Vueling	31 December
2024
Legal reserve	99.429	-	-	-	-	99.429
Other reserve	186.132	(22.749)	409	(132)	-	163.660
	285.561	(22.749)	409	(132)	-	263.089
2023
Legal reserve	99.429	-	-	-	-	99.429
Other reserve	222.821	50.586	2.030	-	(89.305)	186.132
	322.250	50.586	2.030	-	(89.305)	285.561

According to Spanish Companies Law, the legal reserve is not distributable to shareholders until it exceeds 20% of the share

capital, and may only be used, in the case that no other reserves are available, to offset losses. This reserve may also be used to

increase the share capital in excess of 10% of the increased capital stock.

As permitted by the Spanish Companies law, the Company may decrease its share capital without granting its creditors the right

of objection legally contemplated in connection with such capital reduction if it records from unrestricted reserves a reserve for

redeemed capital for an amount equal to the nominal value of the cancelled shares. This reserve can only be used if the same

requirements as those applicable to the reduction of share capital are met.

Other reserves include a Redeemed capital reserve of €70.478.000 (2023: €70.478.000) associated with the decrease in share

capital relating to cancelled shares and a Share capital reduction reserve of €796.813.000 (2023: €796.813.000) associated with a

reduction in the nominal value of the Company’s share capital in 2020.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

11.EQUITY – CAPITAL AND RESERVES continued

11.3. Equity – valuation reserve

A breakdown of movements through the valuation reserve for the years to 31 December is as follows:


€'000	1 January	Valuation adjustment	31 December
2024
Fair value movements on other equity investments (note 9.1.2)	106.562	(18.584)	87.978
Currency translation differences	(10.738)	10.902	164
	95.824	(7.682)	88.142
2023
Fair value movements on other equity investments (note 9.1.2)	1.870	104.692	106.562
Currency translation differences	(12.873)	2.135	(10.738)
	(11.003)	106.827	95.824

The currency differences include the impact of converting the functional currency of the UK branch into the Company’s

presentation currency.

11.4. Treasury shares

The Company has authority to acquire its own shares, subject to specific conditions. The treasury shares balance consists of

shares held directly by the Company.

During the year to 31 December 2024, the Company commenced a €350 million share buyback programme, with an expected

completion date of February 2025. At 31 December 2024, the Company had purchased 47.854.000 shares amounting to €156

million. The treasury shares acquired under the €350 million share buyback programme will be cancelled after approval at the

2025 General Shareholders Meeting.

The Company also acquired treasury shares for IAG’s use, which will be applied towards employee share scheme requirements.

In total, the Company purchased 74.918.000 shares, at a weighted average share price of €2,82 per share totalling €211 million,

which are held as treasury shares. A total of 13.141.000 shares (2023: 3.208.000) were issued to employees during the year as a

result of vesting of employee share schemes.

At 31 December 2024 the Group held 117.622.000 treasury shares (2023: 55.845.000) which represented 2,37% (2023: 1,12%) of

the issued share capital of the Company.


€'000	1 January	Purchase of treasury shares	Share-based payment scheme vesting	31 December
2024
Treasury shares	(99.333)	(210.973)	23.529	(286.777)
	(99.333)	(210.973)	23.529	(286.777)
2023
Treasury shares	(28.012)	(76.716)	5.395	(99.333)
	(28.012)	(76.716)	5.395	(99.333)

11.5. Other equity instruments

The detail of balances related to other equity instruments at 31 December is as follows:


€'000	1 January	Equity instruments movement for the year	31 December
2024
Share-based payments charge (note 17)	353.442	77.381	430.823
Vesting of share-based payment	(234.599)	(32.513)	(267.112)
	118.843	44.868	163.711
2023
Share-based payments charge (note 17)	301.526	51.916	353.442
Vesting of share-based payment	(226.214)	(8.385)	(234.599)
	75.312	43.531	118.843

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

12. TAXES

12.1. Current taxes

12.1.1. Tax receivables and payables

The detail of balances related to tax assets and liabilities at 31 December is as follows:


€'000	2024	2023
Corporate income tax receivable from Tax Authorities (net):
Spain	50.299	6.886
UK	704	676
Total corporate income tax receivable	51.003	7.562

Intercompany payable relating to UK corporate income tax	(16.353)	(16.812)
Provisions for taxes	(600)	(600)
Social security and withholding taxes payable	(39.500)	(25.532)
Value added tax receivable	9.432	4.315
	3.982	(31.067)

12.1.2. Reconciliation of accounting profit for corporate income tax

T he reconciliation between the accounting profit and tax (charge)/credit is as follows:


€'000	2024	2023
Profit/(loss) after tax for the year from continuing operations	941.797	(22.749)
Current tax	(2.293)	2.630
Deferred tax	(3.151)	(1.561)
Impact of rate change	-	121
Adjustments in respect of prior years	(16.870)	9.501
Profit/(loss) before tax	919.483	(12.058)

Permanent differences	(1.104.670)	(8.261)
Temporary differences	10.969	8.061
Adjustment for the purposes of determining the Group taxable base (50% of current tax loss)	82.523	-
Taxable loss	(91.695)	(12.258)

The adjustment for the purposes of determining the Group taxable base (50% of current tax loss) is an amount of €83 million that

originated as a tax loss and in accordance with the Nineteenth Amendment of Law 27/2014 can be deducted in 10 equal annual

instalments.

12.1.3. Reconciliation of accounting profit to taxable profit for corporate income tax


	2024	2023
€'000	Total	Total

Profit/(loss) before tax	919.483	(12.058)
Tax at the standard rates in Spain (25%) and the UK (25%)	(229.871)	2.716
Permanent differences decreasing the tax charge / increasing the tax credit	289.253	7.965
Permanent differences increasing the tax charge / decreasing the tax credit	(12.966)	(6.122)
Adjustment in respect of prior years	16.869	(9.501)
Impact of rate change	-	121
Current year tax asset not recognised	(41.262)	(5.870)
Prior year tax assets not recognised	291	-
Tax credit/(charge)	22.314	(10.691)

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

12.TAXES continued

12.1Current taxes continued

From 1 January 2015 onwards the Spanish companies International Consolidated Airlines Group, S.A., Vueling Airlines, S.A,

Veloz Holding, S.L.U., Avios Group Limited Sucursal en España, IAG GBS Limited Sucursal en España and IAG Cargo Limited

Sucursal en España filed consolidated tax returns as part of the Spanish tax unity (0061/15, pursuant to title VII, Chapter VI of the

Spanish Corporate Income Tax Law set forth in the Law 27/2014 of 27 November 2014). Fly Level S.L. joined the tax unity on 7

November 2017. Yellow Handling S.L.U. joined the tax unity on 17 October 2019. Vueling and Yellow Handling S.L.U. were

excluded from the Spanish tax unity since 1 January 2020 due to modifications in their shareholding.

In 2023 there was a merger between Veloz Holding, S.L.U. and Vueling Airlines, S.A. pursuant to Structural Changes in

Commercial Companies legislation. The merger had retroactive accounting effect as of 1 January 2023. Due to the merger, Veloz

Holding, S.L.U was excluded from the Spanish tax unity since 1 January 2023. No tax liability arose a result of the merger, as the

transaction was carried out under the tax neutrality regime. For further information refer to note 8.1

IAG will be responsible for filing consolidated tax returns on behalf of the other companies that belong to this tax unity.

12.1.4. Taxable (loss)/profit

The taxable profit for the year to 31 December arises as follows:


€'000	2024	2023
Profit/(loss) before tax	919.483	(12.058)
Spain	992.518	7.867
UK	(73.035)	(19.925)
Permanent differences	(1.104.670)	(8.261)
Temporary differences	10.969	8.061
Adjustment for the purposes of determining the Group taxable base (50% of current tax loss)	82.523	-
Taxable loss	(91.695)	(12.258)

12.2. Current provisions and tax audits


€'000	2024	2023
Provisions for taxes	600	600
	600	600

Under prevailing tax regulations, tax returns in Spain may not be considered final until they have either been inspected by tax

authorities or until the four-year inspection period has expired. A tax provision in the balance sheet of €600.000 (2023: €600.000)

has been made as a result of potentially varying interpretations of the tax legislation applicable to the Company’s transactions.

Under prevailing tax regulations, tax returns in the UK may not be considered final until they have either been inspected by tax

authorities or until the six-year inspection period for discovery assessment has expired. In December 2016 the UK Tax Authority

opened an audit into corporate income tax for the year to 31 December 2014. Audits into subsequent years have since been

opened each year for all years up to and including 31 December 2021. As the UK branch is part of the Group’s UK tax group, the

tax provision relating to the UK tax audit is included in “Corporate income tax receivable/(payable) with group companies - UK” in

the balance sheet.

12.3. Deferred tax asset

The detail and movements of balances related to deferred tax assets at 31 December is as follows:


		Variations reflected in
€'000	1 January	Income statement	Equity	Exchange difference	31 December
2024
Temporary differences on share-based payments	5.381	3.151	5.750	497	14.779
	5.381	3.151	5.750	497	14.779
2023
Temporary differences on share-based payments	3.731	1.591	-	59	5.381
	3.731	1.591	-	59	5.381

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

12.TAXES continued

12.4. Deferred tax liability

The detail and movements of balances related to deferred tax liability at 31 December is as follows:


		Variations reflected in
€'000	1 January	Income statement	Equity	Exchange difference	31 December
2024
Temporary differences on Air Europa shares revaluation	(1.008)	-	66	-	(942)
	(1.008)	-	66	-	(942)
2023
Temporary differences on Air Europa shares revaluation	-	-	(1.008)	-	(1.008)
	-	-	(1.008)	-	(1.008)

12.5. Unrecognised tax assets

At the balance sheet date, the Company has €113.259.069 of unrecognised tax losses that arose in Spain in 2014 (before the tax

unity was formed), 2020, 2023 and 2024, and €101.802.416 of unrecognised deductible temporary differences that arose in Spain

in 2015, 2016, 2023 and 2024.


Unrecognised tax losses €'000	2024	2023
2014	8.284	8.284
2020	12.614	69.076
2023	9.838	23.480
2024	82.523	-
Total	113.259	100.840

Unrecognised deductible temporary differences €'000	2024	2023
2015	6.191	6.191
2016	2.608	2.608
2023	10.480	-
2024	82.523	-
Total	101.802	8.799

12.6. Tax related contingent liabilities

The Company has certain contingent liabilities, across all taxes, which at 31 December 2024 amounted to €104 million. No

material losses are likely to arise from such contingent liabilities. As such the Directors do not consider it appropriate to make a

provision for these amounts. Included in the tax related contingent liability is the following:

12.6.1. 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 or ‘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 re-assess its position and the associated

accounting treatment accordingly.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

12.TAXES continued

12.6Tax related contingent liabilities continued

12.6.1Merger gain continued

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 remainder of 2025. If an

appeal on this matter was ultimately successful, it would reduce the exposure of the merger gain described above.

12.7. Other Information

Pillar Two minimum effective tax rate reform

On December 21 2024, Law 7/2024, of 20 December, was published in the Spanish Official State Gazette, establishing a Top-up

Tax in order to guarantee a global minimum tax rate for multinational groups and large national groups, a Tax on the Net Interest

Income and certain financial institutions’ fees and a Tax on liquids for electronic cigarettes and other products related to tobacco.

Other tax regulations are also amended (hereinafter, "Law 7/2024").

Law 7/2024 implements Pillar Two in Spain, establishing, with retroactive effect for Fiscal Years beginning from December 31,

2023, a Top-up Tax, which guarantees that large multinational groups are taxed at a minimum effective rate of 15 per cent

wherever they operate.

In this regard, the group has carried out an analysis of the possible impacts that may arise from the application of this tax in Fiscal

Year 2024, considering the application of the Transitional Safe Harbours that have been established in the Fourth Transitional

Provision of Law 7/2024 and the full computation, where applicable.

The Company has no impact related to Pillar Two rules on its current tax expense and applies the exception to the recognition of

deferred tax assets and liabilities arising from the implementation of Law 7/2024, as established in IAS 12.

Revocation of Royal Decree-Law 3/2016 in Spain

In January 2024, the ruling of the Tribunal Constitutional (Constitutional Court) in Spain was made public, which upheld the

exceptions of unconstitutionality raised regarding several modifications to the Corporate Tax introduced by Royal Decree-Law

3/2016, through which measures were adopted in the tax field aimed at consolidating public finances and other urgent social

measures. In this regard, prior to the aforementioned ruling, in January 2024, the Company submitted a request for correction of

the Corporate Tax returns for the fiscal years 2021 and 2022, requesting the non-application of the measures introduced by Royal

Decree-Law 3/2016.

Prior to the introduction of Royal Decree-Law 3/2016, the Company was permitted to offset up to 70 per cent of its taxable profit

with historical accumulated tax losses (to the extent there were sufficient tax losses to do so). With the introduction of Royal

Decree-Law 3/2016, this limitation of tax losses applied to taxable profit was reduced to 25 per cent.

The declaration of unconstitutionality of certain measures introduced by Royal Decree-Law 3/2016 resulted in the reinstatement of

the limitation on the offsetting of tax losses, returning it to 70 per cent.

As a result of the above, the Company has recognized a current tax credit of €15 million during 2024, equivalent to the refund

received from the Spanish tax authorities in relation to the fiscal years 2021 and 2022.

Restoration of the measures declared unconstitutional, following the approval of Law 7/2024

The aforementioned Law 7/2024 has restored the tax measures mentioned in the previous section, which had been declared

unconstitutional by the Constitutional Court in its ruling of January 18, 2024. Specifically, effective from January 1, 2024, the

Group’s Spanish subsidiaries will be able to offset up to 25 per cent of their taxable base with historical accumulated tax losses (to

the extent there were sufficient tax losses to do so).

13. INCOME AND EXPENSES

13.1. Revenue

The Company’s activity as described in note 1, is the acquisition, ownership, management and disposal of shares or other equity

interests in other companies and provision of management services to those companies. Details and distribution of the revenue

for the year to 31 December, from continuing operations by geographical segments can be represented by the following

information:


€'000	2024	2023
Revenue from operations
Rendering of services to Group companies (note 16.1)	100.884	71.991
Receivable from debt with Group companies (note 16.1)	174.177	177.002
	275.061	248.993

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

13.INCOME AND EXPENSES continued

13.1 Revenue continued


€'000	2024	2023
Revenue by area of geographical sale:
UK	200.487	180.903
Spain	65.220	57.725
Rest of the World	9.354	10.365
	275.061	248.993

13.2. Finance income and costs

The breakdown of finance income and cost is as follows:


€'000	2024	2023
Finance income
Receivable from third parties	62.558	54.504
	62.558	54.504
Finance costs
Payable interest on convertible bond and other securities payables	(59.292)	(61.043)
Payable to third parties	(472)	(2.579)
	(59.764)	(63.622)
Changes in fair value of financial instruments
Net change in fair value of convertible bond	(280.401)	(130.119)
Realised (losses)/gains on derivatives not qualifying for hedge accounting	(87)	-
	(280.488)	(130.119)

During the year the Company recognised a €87.000 loss (2023: €nil) related to foreign exchange derivatives taken to mitigate

exposure arising from intra group dividends received in currencies other than euro.

13.3. Employee costs

The breakdown of personnel expenses is as follows:


€'000	2024	2023
Wages, salaries and other costs
Salaries and wages	58.594	45.526
Share-based payments charge (note 17)	15.456	10.376

Social security costs
Social security	9.159	6.624
Other social costs	3.758	3.394
	86.967	65.920

The Company offers a defined contribution pension plan to all IAG employees. The contributions paid into the defined contribution

scheme during the year to 31 December 2024 totalled €3.758.000 (2023: €3.394.000), and have been recognised as Other social

costs.

Employee numbers are presented in 18.1.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

14. FOREIGN CURRENCY

IAG is a Spanish Company with a UK branch which has a pound sterling functional currency. The breakdown of assets and

liabilities of the UK branch, all denominated in pound sterling, is as follows:


Pound sterling '000	2024	2023
Assets
Property, plant and equipment	53.225	59.082
Investment in other equity instruments	36.273	43.439
Current tax receivable	582	583
Deferred tax asset	12.232	4.646
Amounts owed by Group companies	80.599	93.664
Other receivables	51.369	45.234
Cash and cash equivalents	66.047	45.492
	300.327	292.140
Liabilities
Other taxes and social security	32.184	21.424
Accruals and others payables	33.782	30.782
Amounts due from Group companies	21.703	20.623
	87.669	72.829

Net assets	212.658	219.311

The Income statement, all denominated in ‘000 pound sterling, of the branch is as follows:


Pound sterling '000	2024	2023
Revenue	72.769	57.977
Finance income	2.508	5.088
Employee costs	(64.984)	(48.774)
Other costs	(71.596)	(28.868)
Finance costs	(630)	(2.714)
Loss for the year before tax	(61.933)	(17.291)

15. FINANCIAL RISK MANAGEMENT

The nature of the Company’s business model and its ability to pay dividends to shareholders means the Company is primarily

exposed to capital and credit risk.

Counterparty risk

The Company 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. 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 carrying amount of financial assets represents the maximum exposure to counterparty risk.

Foreign currency risk

The Company undertakes external foreign exchange derivatives trading activity to mitigate the exposure arising from potential

dividends received in currencies other than the euro.

Liquidity risk

The Company 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 Company had no committed revolving credit facilities as at 31 December 2024 (2023: €nil).

Capital risk

The Company’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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

16. RELATED PARTY TRANSACTIONS

The Company has the following related parties at 31 December:


	Nature of relationship
British Airways Plc	Other Group companies
Iberia Líneas Aéreas de España S.A. Operadora	Other Group companies
IB Opco Holding, S.L.	Other Group companies
Vueling Airlines, S.A.	Other Group companies
IAG Cargo Ltd	Other Group companies
IAG GBS Ltd	Other Group companies
IAG GBS Poland Sp. z o.o.	Other Group companies
Aerl Holding Limited	Other Group companies
Aer Lingus Group DAC	Other Group companies
Avios Group (AGL) Limited	Other Group companies
IAG Connect	Other Group companies
Fly Level S.L.	Other Group companies
FLYLEVEL UK Limited	Other Group companies
Fly Level Barcelona LH S.L.	Other Group companies
Qatar Airways (Q.C.S.C.)	Significant shareholder
Key management personnel	Directors and Management Committee

16.1. Related entities

The following transactions took place with related parties for the financial years to 31 December:


€'000	2024	2023
Revenue from operations
Rendering of services to Group companies	100.884	71.991
Dividend income received from Group companies	1.189.253	-
Receivable from debt with Group companies	174.177	177.002
Purchases of services
Purchases from Group companies	19.017	7.877
Costs
Payable on debt with Group companies	1.443	5.764

December balances
	2024	2023
Receivables from related parties
Amounts owed by Group companies	126.502	187.530
Loan receivable from Group companies	1.862.687	2.128.613
Payables to related parties
Amounts owed to Group companies	39.572	17.567
Loan payable to Group companies	-	209.137

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

16.RELATED PARTY TRANSACTIONS continued

16.1Related entities continued

The details of the loans receivable from Group companies is as follows:


	Amount outstanding 31 December				Finance income
€'000	2024	2023	Due date	Interest rate	2024	2023
AERL Holdings	-	-	2023	3 year mid swap vs 3 months EURIBOR +4,00%	-	1.900
AERL Holdings	77.496	73.218	2025	5,66% fixed	4.278	1.354
British Airways	1.648.645	1.648.425	2026	3 months EURIBOR + 4,60%	140.131	132.952
Aer Lingus	-	-	2023	3 months EURIBOR + 4,70%	-	3.853
Fly Level Barcelona	6.511	-	2027	6,20 % fixed	118	-
Fly Level Barcelona	2.018	-	2025	12 months EURIBOR + EBIT component	18	-
IB Opco Holding	-	81.006	2026	3,50 % fixed	1.641	3.404
IB Opco Holding	17.711	325.964	2026	12 months EURIBOR + EBIT component	27.685	33.539
Vueling	110.306	-	2025	12 months EURIBOR + EBIT component	306	-
	1.862.687	2.128.613			174.177	177.002

During 2024 IB Opco Holding repaid the principal and interest outstanding totalling €417.768.000 to the Company. The

outstanding balance as at 31 December 2024 was €17.711.000 (2023 €406.970.000)

During 2024 Vueling borrowed €110.000.000 from the Company which was issued as a profit participating loan. The outstanding

balance as at 31 December 2024 was €110.306.000 (2023: €nil).

During 2024 Fly Level Barcelona borrowed €8.500.000 from the Company. €2.018.000 was issued as a profit participating loan.

The outstanding balance as at 31 December 2024 was €8.529.000 (2023: €nil).

Prior year movements:

In 2023, a new loan agreement was entered into with AERL Holdings which replaced the existing loan. The outstanding balance

as at 31 December 2023 was €73.218.000

The details of the loans payable to Group companies is as follows:


	Amount outstanding 31 December				Finance costs
€'000	2024	2023	Due date	Interest rate	2024	2023
Vueling	-	109.069	2024	1,20%	1.239	1.308
Avios	-	-	2023	2 year GILT + 1,25%	-	1.161
Iberia	-	-	2023	5 year euro mid swap rate +1,95%	-	1.152
Aer Lingus	-	100.068	2024	5 year euro mid swap rate +1,03%	204	1.086
British Airways	-	-	2023	5 year euro mid swap rate +2,00%	-	316
British Airways	-	-	2023	5 year euro mid swap rate +2,00%	-	741
	-	209.137			1.443	5.764

During 2024 the Company repaid to Vueling the principal and interest outstanding of €110.059.000.The outstanding balance as at

31 December 2024 was €nil (2023: €109.069.000).

During 2024 the Company repaid to Aer Lingus the principal and interest outstanding of €100.272.000. The outstanding balance

as at 31 December 2024 was €nil (2023: €100.068.000).

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

16.RELATED PARTY TRANSACTIONS continued

16.1Related entities continued

Prior year movements:

In June 2023 the Company repaid to Avios the principal and interest outstanding of €216.270.000. The outstanding balance as at

31 December 2023 was €nil.

During 2023 the Company repaid to Iberia the principal and interest outstanding of €101.658.000. The outstanding balance as at

31 December 2023 was €nil.

During 2023 the Company repaid to British Airways the principal and interest outstanding of €97.390.000. The outstanding

balance as at 31 December 2023 was €nil.

On 28 December 2023, the shareholders of Vueling approved the reverse merger between Veloz and Vueling, whereby Vueling

absorbed the assets and liabilities of Veloz. Accordingly, the €109.044.000 loan payable from the Company to Veloz became a

loan payable to Vueling.

Ordinary transactions with Group companies were carried out on an arm’s length basis in accordance with the Group’s transfer

pricing policies. Outstanding balances that relate to trading balances are placed on intragroup accounts with payment terms of 90

days.

16.2. Board of Directors and Management Committee remuneration

A breakdown of the remuneration received by the Board of Directors and Management Committee for the years to 31 December is

as follows:


€'000	2024	2023

Board of Directors
Salaries (fixed and variable)	4.673	4.419
Benefits in kind	297	259
Life insurance policies	12	12
	4.982	4.690

Management Committee
Salaries (fixed and variable)	14.008	12.686
Benefits in kind	2.543	2.244
Life insurance policies	35	33
Pension contributions	163	42
Share-based payments	3.110	-
	19.859	15.005

The pension obligation outstanding, which represents the transfer value of the accrued pension was €3.665.000 (2023:

€3.501.000) for the Management Committee.

Information regarding share-based remuneration can be found on the Report of the Remuneration Committee in the Group Annual

Report and Accounts 2024.

At 31 December 2024 and 2023, no advances or loans had been given to members of the Board of Directors.

The members of the Board of Directors of the Company and persons related to them are as defined per Article 229 of the Spanish

Capital Companies Act approved by Royal Decree 1/2010 dated 2 July, amended by Law 31/2014 dated 3 December, amending

the Spanish Capital Companies. They have also confirmed that they have not engaged in activities on their own behalf or on

behalf of others that involve effective competition, whether actual or potential, with the Company or that in any other way places

them in permanent conflict with the interests of the company.

17. 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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

17.SHARE-BASED PAYMENTS continued

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.

IAG Restricted Share Plan

The IAG Restricted Share Plan (RSP) 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.

IAG Full Potential Incentive Plan

In 2021, the Group launched the Full Potential Incentive Plan (FPIP), 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 operating result performance targets

for 2024 and the approval of the Board.

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.

Share-based payment schemes summary


	Outstanding at 1 January 2024	Granted number	Lapsed number	Vested number	Outstanding at 31 December 2024	Exercisable 31 December 2024
	000s	000s	000s	000s	000s	000s
Performance Share Plans	2.602	-	-	1.588	1.014	1.014
Restricted Share Plans	12.137	5.388	582	2.159	14.784	-
Full Potential Incentive Plan	4.847	-	21	-	4.826	-
Incentive Award Deferral Plans	448	465	-	-	913	-
	20.034	5.853	603	3.747	21.537	1.014


	Outstanding at 1 January 2023	Granted number	Lapsed number	Vested number	Outstanding at 31 December 2023	Exercisable 31 December 2023
	000s	000s	000s	000s	000s	000s
Performance Share Plans	4.973	-	2.156	215	2.602	1.038
Restricted Share Plans	8.499	4.967	1.104	225	12.137	-
Full Potential Incentive Plan	5.039	923	1.115	-	4.847	-
Incentive Award Deferral Plans	909	447	7	901	448	-
	19.420	6.337	4.382	1.341	20.034	1.038

The weighted average share price at the date of exercise of options exercised during the year to 31 December 2024 was €1,91

(2023: €1,74). The weighted average contractual life for awards outstanding at 31 December 2024 was 0,9 years (2023: 1,8

years).

In 2024 there were no equity-settled share-based payment plan grants made with a fair value determined using the Monte Carlo

method of valuation. The fair value of awards made during 2024 is the share price at the date of award.

The Company recognised a share-based payments charge of €15.456.000 for the year to 31 December 2024 (2023:

€10.376.000). A credit of €77.381.000 (2023: €51.916.000) representing the total Group charge was recognised in Reserves

including a deferred tax credit of €5.750.000 (2023: €nil). Group companies are recharged for the grants made to employees of

those Group companies.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

18. OTHER DISCLOSURES

18.1. Employee numbers


	Number of employees at year end			Average number
Professional category	Men	Women	Total	of employees
2024
Management Committee	8	3	11	11
All other employees	89	63	152	148
	97	66	163	159
2023
Management Committee	9	3	12	11
All other employees	84	59	143	135
	93	62	155	146

There are no employees with a certified disability greater than 33% (2023: €nil)

At 31 December 2024, the Board consisted of 11 people, including six men and five women (2023: 11 people, including six men

and five women).

18.2. Audit fees

The fees for the audit of the Company’s financial statements, the audit of the Group consolidation and non-audit services provided

to the Company by the external auditor KPMG Auditores S.L. are as follows:


€'000	2024	2023

Fees for the audit of the financial statements	1.901	1.936
Other audit related services	758	671
All other services	-	-
	2.659	2.607

Information on services provided to the Company and its subsidiaries by KPMG and other network firms is included in the Group’s

consolidated financial statements.

18.3. Contingent liabilities

There are a number of legal and regulatory proceedings against the Company in a number of jurisdictions which at 31 December

2024, where they could be reliably estimated, amounted to €3,5 million (31 December 2023: €53,5 million). The Company 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.

Contingent liabilities associated with income taxes, deferred taxes and indirect taxes are presented in note 12.

18.4. Information on environmental issues

The undersigned, as Directors of the Company, hereby state that the accounting records relating to these financial statements do

not contain any item of an environmental nature that should be included pursuant to point 5 of the Valuation Standard 4ª Financial

Statements, or Section 3 of the Spanish National Chart of Accounts (Royal Decree 1514/2010, of 16 November). Please refer to

the Corporate Sustainability Reporting Directive within the Group Annual Report and Accounts 2024 for Group disclosures on

environmental matters and climate change.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Notes to the financial statements continued

19. POST BALANCE SHEET EVENTS

Partial redemption of 2027 and 2029 bonds

On 17 January 2025, the Company 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 Company paid accrued interest for

the bonds that were redeemed amounting to €11 million. Further information relating to these two bonds is given in note 9.

Completion of share buyback programme

As detailed in note 11, on 8 November 2024 the Company 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.

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.

INTERNATIONAL CONSOLIDATED AIRLINES GROUP, S.A.

Management report for the year to 31 December 2024

MANAGEMENT REPORT

International Consolidated Airlines Group, known as International Airlines Group or IAG is the parent company of British Airways,

Iberia, Vueling, Aer Lingus, IAG Cargo, IAG GBS, AERL Holding, Fly Level, Fly Level Barcelona and IAG Connect. The Group

was formed on 21 January 2011 when the merger between British Airways and Iberia was completed.

Business review

IAG is a Spanish registered company with the majority of its Board meetings held in Spain. IAG operates a head office through its

UK branch in London, with an average staff of 159 (2023: 146) managing key support functions for the Group. The Company’s

focus is on the Group strategy, synergies, digital and connectivity, and support of finance, legal and communications functions as

well as the administration of the Company.

Costs in relation to work carried out for the operating companies of the Group are recharged back to those companies.

It is expected that the Company will remain relatively small within the Group, whilst continuing to provide support to the operating

companies where required and providing leadership of the Group strategy.

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.

As the parent company, IAG is responsible for managing and allocating capital, driving overall Group performance and setting the

agenda for sustainability and innovation.

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.

IAG as 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.

IAG’s three strategic imperatives are:

• A strong core;

• Capital-light earnings growth; and

• A robust financial and sustainability framework

These imperatives are achieved through a series of strategic priorities:

• Growing our portfolio of global leadership positions and strengthening our portfolio of world-class brands;

• Developing our loyalty and holidays businesses and leveraging our strategic airline partnerships;

• Performing disciplined capital allocation and balance sheet management; and

• Being an industry leader in the transition to net zero.

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.

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.

Finance review

Income statement

Revenue derived from charging the airline companies for the services that IAG provides to them totalled €101 million for the year

to 31 December 2024 (2023: €72 million). Such services cover financial control over treasury policy, treasury support including

hedging, financing and refinancing, major capital investments, co-ordination and delivery support of the synergies, strategy and

general management of the Group. Revenue from services in 2024 increased compared to 2023 to cover additional costs relating

to IT and digital services. Revenue also includes finance income received from lending provided to operating companies within the

Group. Finance income from debt with Group companies in the period was €174 million compared to €177 million in 2023.

The Company received dividend income from British Airways and Iberia amounting to €1.189 million during the year (2023: €nil).

The Company’s expenses are split between employee costs, services received and other operating expenses.

Employee costs for the year were €87 million (2023: €66 million). The increase in employee costs is due to salary increases as

well as an increase in the share based payment and social security charges.The share-based payment cost was €15 million for

the year, compared with €10 million in 2023.

Services received largely relate to supporting the activities of the key departments. Other expenses reflect the cost of operating

the IAG offices and IT costs, as well as the costs supporting the Group’s market listings with the CNMV and UKLA. Operating

expenses increased to €176 million in 2024 from €48 million in 2023. Legal and advisory fees incurred in pursuit of the acquisition

of 80% of Air Europa totalled €30 million and €50 million relates to the Air Europa termination settlement payment, with the

balance largely relating to IT and digital services.

Finance costs payable on debt with third parties of €60 million (2023: €64 million) include interest expense on bonds.

The change in fair value of financial instruments reflects €87 thousand loss on derivatives entered into by the Company not

qualifying for hedge accounting (2023: €nil ).

The profit before tax for the year was €919 million (2023: loss €12 million).

The tax credit of €22 million (2023: €11 million charge) reflects:

• UK tax on the tax adjusted results of the Company’s UK branch at the tax rate of 25% (2023: 23,5%);

• No Spanish tax credit being recognised on the tax adjusted losses of the Company’s head office; and

• Adjustments in respect of prior years.

The profit after tax for the year was €942 million (2023: loss €23 million).

Balance sheet

IAG’s primary assets are its subsidiaries. IAG’s investments in British Airways and Iberia were created at the time of the merger

on 21 January 2011 and amounted to €6.208 million. At 31 December 2024, IAG held an investment of €4.161 million in British

Airways, €2.422 million in Iberia, €836 million in AERL Holding, €38 million in Vueling, €22 million in GBS, €5 million in IAG

Connect and €1.000 in Fly Level Barcelona, totalling €7.484 million (2023: €7.484 million). It also holds an investment in Cargo.

Treasury shares

At 31 December 2024 the Company held 117,6 million shares (2023: 55,8 million).

During the year the Company purchased 74,9 million shares, and a total number of 13,1 million shares vested in relation to share-

based payment schemes. The total number of the Company’s treasury shares as at 31 December 2024 accounts for 2,37%

(2023: 1,12%) of the total issued capital at that date.

Dividends

On 1 August 2024 the Board of Directors approved an interim dividend of €0,03 per share. The interim cash dividend was paid on

9 September 2024 for a total amount (net of withholding tax of €27.935.000) of €147.026.000. The withholding tax was paid from

September 2024.

On 27 February 2025 IAG’s Board of Directors proposed a distribution in cash of a final dividend of €0,06 per share. The proposed

final dividend is subject to approval at the annual general meeting and subject to approval, will be recognised as a liability on that

date. The proposed final dividend would be distributed from net profit for the year to 31 December 2024.

Post balance sheet events

Partial redemption of 2027 and 2029 bonds

On 17 January 2025, the Company 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 Company paid accrued interest for

the bonds that were redeemed amounting to €11 million. Further information relating to these two bonds is given in note 9.

Completion of share buyback programme

As detailed in note 11, on 8 November 2024 the Company 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.

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.

Research and development

The Company does not undertake any research or development activity.

Financial risk management

The nature of the Company’s business model and ability to pay dividends to shareholders means the Company is primarily

exposed to capital and credit risk. The Company’s objectives when managing capital are to safeguard the Group’s ability to

continue as a going concern, to maintain an optimal capital structure in order to reduce the cost of capital and to provide future

returns to shareholders.

Principal risks and uncertainties

The Company has continued to maintain its framework and processes to identify, assess and manage risks, and monitors the risk

landscape in the light of changes that influence or impact the Company’s performance or the aviation industry. Through its risk

reviews, the Group has been considering further how to assess the combining effect of groups of risks on the business to help

develop mitigations that address risk and opportunity more holistically or identify themes or emerging risks earlier. In assessing its

principal risks, the Company has considered the status of the financial markets, geopolitical and economic risk, including potential

policy change with new governments, pace of transformation, Artificial Intelligence (AI) adoption and future skillsets, people

engagement, and securing talent and expertise to deliver cultural change. The Directors of the Company believe that the risks and

uncertainties described below are the ones that may have the most significant impact on the day to day operations of IAG as a

parent company. These risks are considered by the IAG Management Committee as part of its wider consideration of Group risks

under the IAG Enterprise Risk Management framework. Management remains focused on mitigating risks, where appropriate or

feasible, whilst recognising that such risk events may not be so easily planned for and that mitigations may be more responsive in

nature. The list is not intended to be exhaustive.

Data and cybersecurity

The risks from cyber threats continue as threat actors seek to exploit any weaknesses in defences particularly through social

engineering and human behaviours, with the threat of malware attacks on the Company or its suppliers remaining high and

increasing in the year with heightened geopolitical tensions. The Company could face financial loss, disruption or damage to

brand reputation arising from an attack on the Company’s systems. 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. The Company

continues to improve its cyber security posture either through IT transformational change or additional monitoring through tools as

well as better understanding the risk presented by its suppliers. There is significant oversight of critical systems and suppliers to

ensure that the Company understands the data it holds, that it is secure and regulations are adhered to. The fast-moving nature of

this risk means that the Company will always retain a level of vulnerability.

Economic and political risk

Geopolitical risk and uncertainty remains high and wider macroeconomic events may continue to drive market volatility. Changes

in government may result in a change in sentiment to aviation and access to markets. The Company 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. 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 also kept under review.

Financial risk, including tax

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 re-finance 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.

The failure to manage the financial counterparties credit exposure arisen from cash investments and derivatives trading may

result in financial losses. The Company is exposed to non-performance of ﬁnancial contracts by counterparties, for activities such

as money market deposits, fuel and currency hedging. 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 Company has maintained its clear

focus on managing liquidity and maintaining strong relationships with banks, lenders and lessors. There is continuous review of

the capital structure to minimise interest rate exposure and lower cost of capital. The Company 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. The Company may be subject to higher levels of taxation as governments seek to redesign the

global tax framework and rebuild public finances. The Group adheres to the tax strategy which is reviewed and approved annually

by the IAG Board. It is committed to complying with all tax laws, to acting with integrity in all tax matters and to working openly

with tax authorities. The Group takes expert advice on tax matters as required.

Group Governance Structure

The aviation industry continues to operate under a range of nationality and other restrictions, some of which are relevant to market

access under applicable bi-lateral and multi-lateral air service agreements, while some are relevant to eligibility for applicable

operating licences. IAG could face a challenge to its ownership and control structure. IAG will continue to monitor regulatory

developments affecting the ownership and control of airlines in the UK and EU and will continue to encourage stakeholders to

normalise ownership of airlines in line with other business sectors.

Operational and IT resilience

The dependency on IT systems for key business and customer processes for operational resilience is increasing and the failure of

a critical system may cause significant disruption. Obsolescence within the Company’s IT estate could result in service outages or

delays in implementation of transformation activities. The Company works to deliver digital and IT change initiatives to enhance

security, stability and availability. System controls, disaster recovery and business continuity arrangements exist to mitigate the

risk of a critical system failure

People and culture

Our people, their engagement and cultural appetite and mindset for change are critical to achieving our transformation plans. Our

people and leaders are a critical enabler of the Company’s current performance and future success. The Company may fail to

attract, motivate, retain or develop its people with critical skillsets not being in place to execute on the required transformation or

to exploit innovation and AI opportunities and drive the business forward. The Company is also at risk of our people not being

engaged or not displaying the required leadership or cultural behaviours. Enhancing leadership capability, succession planning

and plans for improving organisational health and employee engagement mitigate these risks. The Company is exposed to the

risk of individual employees’ or groups of employees’ inappropriate and/or unethical behaviour. Failure to meet legal or regulatory

standards may result in breach with the potential to hurt or impact our employees, or third parties, and lead to reputational

damage, fines or losses to the Company. There are clear frameworks in place including comprehensive Group-wide policies

designed to ensure compliance, monitored by the IAG Audit and Compliance Committee. There are mandatory training

programmes in place to educate employees in these matters, including training in respect of the IAG Code of Conduct framework.

Compliance, human resources and legal professionals advise the Company as needed

Reputation

As a listed entity in Spain and the UK, and as owner of British Airways, Iberia, IAG Cargo, Vueling, Aer Lingus, IAG Loyalty and

LEVEL, the Company is exposed to reputational risk and consequent impact to the Group’s brands. The Company’s Investor

Relations and Media Relations teams work with stakeholders to understand their concerns or update on specific matters.

The Annual Corporate Governance Report is part of this Management Report but has been presented separately together with the

Group Annual Report and Accounts. This report has been filed with the CNMV, together with the required statistical annex, in

accordance with the CNMV Circular 2/2018, dated June 12. The Annual Corporate Governance Report and the statistical annex

are also available on the Company’s website (www.iairgroup.com).

The Corporate Sustainability Reporting Directive in response to the requirements of Law 11/2018, of 28 December, (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), is part of this Management Report and is available on the Company’s website

(www.iairgroup.com).


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