International Consolidated Airlines Group (IAG) investor relations material

Strategic vision and financial targets

• Aims to achieve €1bn operating profit in the mid-term, with high margins and strong free cash flow conversion above 100% of operating profit.

• Targets operating margins above 18% and maintains a capital-light, high-margin business model.

• Profit has doubled since 2019, driven by growth in both Loyalty and Holidays divisions.

• Loyalty division delivers >20% operating margin, while Holidays achieves ~10%.

• Growth strategy includes expanding customer base, increasing multi-collection, and entering new markets.

Business model and value creation

• Generates revenue by selling Avios to partners at a higher price than redemption cost, and through mark-ups on holiday packages.

• Capital-light model with annual capex under £50m, supporting >10% business growth and high cash conversion.

• Partners benefit from increased customer acquisition, retention, and spend, while customers gain access to unique rewards.

• Financial services, especially co-brand cards, are the highest-margin sector, with >80% of Avios revenue from external partners.

• Holidays division leverages airline inventory and third-party suppliers to drive incremental demand and margin.

Customer base and engagement

• Over 46 million enrolled loyalty customers, with 10.6 million active in 2025, growing at ~13% CAGR.

• Customer base is concentrated in high-income segments, with 2.6x more UK customers earning £100k+ and 5.1x more in Spain earning €90k+ than market averages.

• Multi-collectors, who engage with multiple partners, drive 69% of Avios issuance and generate materially higher profit per customer.

• 80% of Holidays revenue comes from BA Club members, but only 5% of the Club base currently books Holidays, indicating significant growth headroom.

• Deep engagement across air, holidays, financial services, and retail, with rich customer data leveraged for future growth.