Q3 2025 International Consolidated Airlines Group SA Earnings Call

November 7, 2025

Speaker #1: Good morning , ladies and gentlemen , and welcome to the International Airlines Group . Third quarter 2020 results call . At this time , all participants are in listen only mode .

Operator: Good morning, ladies and gentlemen, welcome to the International Airlines Group Q3 2025 Results Call. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session through the phone lines, and instructions will follow at the time. I would like to remind all participants that this call is being recorded. I will now hand over to Luis Gallego, Chief Executive Officer, to open the presentation. Please go ahead.

Speaker #1: Later , we will conduct a question and answer session through the phone lines and instructions will follow . At that time . If I would like to remind all participants that this call is being recorded .

Speaker #1: I will now hand over to Luis Gallego, Chief Executive Officer, to open the presentation. Please go ahead.

Speaker #2: Thank you very much . Good morning , everyone , and welcome to the IAG third quarter results . Today I have with me Nicholas Cadbury , our CFO , as well as members of the IAG Management Committee .

Luis Gallego: Thank you very much. Good morning, everyone, welcome to the IAG Q3 results. Today I have with me Nicholas Cadbury, our CFO, as well as members of the IAG Management Committee. This has been another good quarter for IAG, we are on track for another very good year. Our strong fundamentals underpin our best-in-class value creation over the long term. We are continuing to see robust demand for travel across the group. Our leading network and brands have helped to deliver a strong revenue performance in the quarter, with PRAS broadly flat at constant currency against our record quarter last year. Our transformation initiatives are delivering effective cost control, supporting our competitive cost base on which we are delivering market-leading margins at 22% for the quarter and over 15% on a last 12 months basis.

Speaker #2: This has been another good quarter for IAG, and we are on track for another very good year. Our strong fundamentals underpin our best-in-class value creation.

Speaker #2: Over the long term, we are continuing to see robust demand for travel across the group. Our leading network and brands have helped to deliver a strong revenue performance in the quarter, with broadly flat results at constant currency against a record quarter last year.

Luis Gallego: Our leading network and brands have helped to deliver a strong revenue performance in the quarter, with PRAS broadly flat at constant currency against our record quarter last year. Our transformation initiatives are delivering effective cost control, supporting our competitive cost base on which we are delivering market-leading margins at 22% for the quarter and over 15% on a last 12 months basis.

Speaker #2: Our transformation initiatives are delivering effective cost control, supporting our competitive cost base on which we are delivering market-leading margins at 22% for the quarter and over 15% on a last 12 months basis.

Speaker #2: As Nicholas will show you , every single one of our airlines has reported a margin over 20% this quarter . This was also one of the best summers , operationally , that we have ever had , which is also supporting positive NPS performance .

Luis Gallego: As Nicholas will show you, every single one of our airlines has reported a margin over 20% this quarter. This was also one of the best summers operationally that we have ever had, which is also supporting positive NPS performance. Our balance sheet continues to be strong, giving us optionality around our capital allocation, whether that is investing in the business at the high rates of return or reducing our gross leverage as we take an encumber aircraft deliveries or as we increase our dividends, as we are doing with this set of results for our shareholders. We intend to announce further returns of excess cash to shareholders at full year results in February. For the short term, we are confirming that our outlook for this year is unchanged. In the longer term, we are confident in our strategy to create value for our shareholders.

Speaker #2: Our balance sheet continues to be strong , giving us optionality around our capital allocation , whether that is investing in the business at a high rates of return or reducing our gross leverage as we take unencumbered aircraft deliveries , or as we increase our dividends .

Speaker #2: As we are doing with this set of results for our shareholders, we intend to announce further returns of excess cash to shareholders at full year results in February.

Luis Gallego: We intend to announce further returns of excess cash to shareholders at full year results in February. For the short term, we are confirming that our outlook for this year is unchanged. In the longer term, we are confident in our strategy to create value for our shareholders.

Speaker #2: So for the short term , we are confirming that our outlook for this year is unchanged . And in the longer term , we are confident in our strategy to create value for our shareholders .

Speaker #2: And on that note, I will hand over to Nicholas to take you through the details for the quarter.

Luis Gallego: On that note, I will hand over to Nicholas to take you through the details for the quarter.

Speaker #3: Thank you . Good morning , everyone . I'm pleased to announce another strong set of results . On the left you can see the breakdown of the key drivers of the profit increase .

Nicholas Cadbury: Thank you, Luis. Good morning, everyone. I'm pleased to announce another strong set of results. On the left, you can see the breakdown of the key drivers of the profit increase we've delivered in Q3. These are shown on a constant currency basis with the impact FX shown separately. We delivered a passenger revenue increase of EUR 177 million or 2% up. Cargo revenue decreased slightly as we cycled over the elevated yields from the Red Sea disruption in 2024. Other revenue continued to perform well with the increase including higher IAG Loyalty revenues, together with increased third-party revenues from Iberia's MRO business. As we guided, the performance of non-fuel costs continued to improve quarter-on-quarter, the increase was partially offset by lower fuel prices.

Speaker #3: We've delivered in Q3 . These are shown on a constant currency basis with the impact of FX shown separately . We delivered a passenger revenue increase of €177 million , or 2% , up .

Speaker #3: Cargo revenue decreased slightly as we cycled over the elevated yields from the Red Sea. Disruption in 2024 and other revenue continued to perform well, with the increase in crude, including higher IAG loyalty revenues.

Nicholas Cadbury: Other revenue continued to perform well with the increase including higher IAG Loyalty revenues, together with increased third-party revenues from Iberia's MRO business. As we guided, the performance of non-fuel costs continued to improve quarter-on-quarter, the increase was partially offset by lower fuel prices.

Speaker #3: Together with increased third-party revenues from IBM Iberia's MRO business, as we guided, the performance of non-fuel costs continues to improve.

Speaker #3: Quarter on quarter, the increase was partially offset by lower fuel prices. We split out the FX into a separate item, and you can see that we had an €8 million overall headwind from FX on profit.

Nicholas Cadbury: We split out the FX into a separate item. You can see that we had an EUR 8 million overall headwind from FX on profit, with benefits from the weaker US dollar more than offset by weaker sterling euro in the quarter. Overall, we increased profit by EUR 40 million on the record performance in Q3 last year. By opco, Iberia, Aer Lingus, and Loyalty showed strong profit growth, whilst BA and Vueling profits were slightly down year-on-year. BA is shown in euros here and was impacted by the depreciation of sterling against the euro, driving a larger reduction in euro terms than in sterling terms. Let's look at the operating company's performance in more detail.

Speaker #3: With benefits from the weaker US dollar more than offset by a weaker sterling euro in the quarter. Overall, we increased profit by €40 million on the record performance in Q3 last year.

Speaker #3: By Opco Iberia and Loyalty showed strong profit growth whilst BA and dwelling profits were slightly down year on year . BA BA is shown in euros here and so was impacted by the depreciation of sterling against the euro , driving a larger reduction in euro terms than in sterling terms .

Nicholas Cadbury: By opco, Iberia, Aer Lingus, and Loyalty showed strong profit growth, whilst BA and Vueling profits were slightly down year-on-year. BA is shown in euros here and was impacted by the depreciation of sterling against the euro, driving a larger reduction in euro terms than in sterling terms. Let's look at the operating company's performance in more detail.

Speaker #3: Now let's look at the operating company's performance in more detail. Aer Lingus increased its operating profits by €31 million to €170 million, and its operating margins by three percentage points to 21.6%.

Nicholas Cadbury: Aer Lingus increased its operating profits by EUR 31 million to EUR 170 million, its operating margins by 3 percentage points to 21.6%, despite competitive capacity growth in Dublin. Q3's performance was driven by the expansion of its networks, particularly on the North Atlantic, and the impact of the industrial action of approximately EUR 30 million in Q3 2023. British Airways saw its operating profits decline slightly by GBP 18 million, and its operating margins remained high at 20.2%. Unit revenues fell 1% driven by the expected softer trading in US sold North Atlantic economy leisure and by 7% capacity growth in European short haul. Non-fuel unit costs increased by 3%, driven by employee pay deals and resilience costs not being fully offset by the transformational benefits.

Speaker #3: Despite competitor capacity growth in Dublin, Q3 performance was driven by the expansion of its networks, particularly on the North Atlantic, and the impact of the industrial action of approximately €30 million in Q3 last year.

Speaker #3: British Airways saw its operating profits decline slightly by £18 million, and its operating margins remained high at 20.2%. Unit revenues fell 1%, driven by the expected softer trading in the U.S. market.

Nicholas Cadbury: Unit revenues fell 1% driven by the expected softer trading in US sold North Atlantic economy leisure and by 7% capacity growth in European short haul. Non-fuel unit costs increased by 3%, driven by employee pay deals and resilience costs not being fully offset by the transformational benefits.

Speaker #3: North Atlantic economy leisure and by 7% capacity growth in European short-haul. Non-fuel unit costs increased by 3%, driven by employee pay deals and resilient costs.

Speaker #3: Not being fully offset by the transformational benefits . Iberia continued to report strong results with operating profits increasing €56 million to €510 million , and its operating margin increasing 2.2% to 23.7% .

Nicholas Cadbury: Iberia continued to report strong results, with operating profits increasing EUR 56 million to EUR 510 million, and its operating margin increasing 2.2% to 23.7%. Iberia also saw softness in the North Atlantic, driven by competitive capacity into Madrid. However, it was fully more than offset by the continued strong demand in the South Atlantic routes. Non-fuel costs increased by 2.2%, primarily due to resilience costs and higher ownership costs from the new aircraft. Vueling operating profit was EUR 20 million lower at EUR 272 million, but at a high operating margin of just over 25%.

Speaker #3: Iberia also saw softness in the North Atlantic , driven by competitive , competitive capacity into Madrid . However , it was fully more than offset by the continued strong demand in the South Atlantic routes .

Speaker #3: Non-fuel costs increased by 2.2%, primarily due to resilience costs and higher ownership costs from the new aircraft. Operating profit was €20 million lower at €272 million, but at a high operating margin of just over 25%.

Speaker #3: Good non-fuel unit cost performance was offset by a decline in unit revenue , driven by slightly weaker demand , particularly in Benelux and Germany and the UK , as well as the effect of investing , investing and strengthening some of its core markets , which was not fully offset by the strong demand in other markets .

Nicholas Cadbury: Good non-fuel unit cost performance was offset by decline in unit revenue driven by slightly weaker demand, particularly in Benelux, Germany, and the UK, as well as the effect investing in strengthening some of its core markets, which was not fully offset by the strong demand in other markets. IAG Loyalty reported GBP 141 million in operating profit, up GBP 60 million year-on-year at a margin of nearly 19%. Moving on to our revenue performance in more detail. Overall demand for travel continues to be strong, driven by demand for our network and our strong brands. The performance was in line with the guidance we gave in an outlook at the interns.

Speaker #3: IAG loyalty reported £141 million in operating profit , up £16 million year on year at a margin of nearly 19% . Moving on to our revenue performance in more detail .

Nicholas Cadbury: Moving on to our revenue performance in more detail. Overall demand for travel continues to be strong, driven by demand for our network and our strong brands. The performance was in line with the guidance we gave in an outlook at the interns.

Speaker #3: Overall demand for travel continues to be strong , driven by demand for our network and our strong brands . Performance was in line with the guidance we gave in the outlook at the interims .

Speaker #3: We grew capacity by 2.4% , with unit revenue declining by 2.4% and around two percentage points , of which was due to currency movements .

Nicholas Cadbury: We grew capacity by 2.4%, with unit revenue declining by 2.4%. Around 2 percentage points of which was due to currency movements, so only marginally down on an underlying basis against a record quarter last year. If we look at the performance by region, North Atlantic capacity increased by 2.9%, with unit revenue decreasing by 7.1%. It's really important to note that around half of this was due to currency headwinds from both weak US dollar and sterling against the euro. The trends were similar to those we reported at the interim results. We continued to see some softness in US point of sale economy leisure and an impact on our transfer flows of US direct capacity growth into secondary markets in Europe. Premium demand held up well.

Speaker #3: So only marginally down on underlying basis against a record quarter last year . If we look at the performance by region , North Atlantic capacity increased by 2.9% , with unit revenue decreasing by 7.1% .

Speaker #3: It's really important to note that around half of this was due to currency headwinds . Headwinds from both weak US dollar and sterling against the euro .

Nicholas Cadbury: The trends were similar to those we reported at the interim results. We continued to see some softness in US point of sale economy leisure and an impact on our transfer flows of US direct capacity growth into secondary markets in Europe. Premium demand held up well.

Speaker #3: The trends were similar to those we reported at the interim results . We continued to see some softness in US point of sale , economy , leisure and an impact on our transfer flows of US direct capacity growth into secondary markets in Europe .

Speaker #3: Premium demand held up well . South Atlantic continues to be the star performer in the network . Unit revenue increased 0.6% on a capacity increase of up to 2.9% .

Nicholas Cadbury: South Atlantic continues to be the star performer in the network. Unit revenue increased 0.6% on a capacity increase of up 2.9%. Iberia's performance continues to be strong, with the routes to Argentina continuing to perform well, along with routes to Venezuela, Ecuador, and Colombia. Europe unit revenues decreased by 6% on a capacity increase of 2.4%. I've already mentioned weaker demand for Vueling and the additional capacity from British Airways. In addition, there were FX headwinds from the weak sterling euro, representing about 2 percentage points on unit revenue impact, with Iberia and Aer Lingus performing better. To finish off, Asia Pacific performed well, and Africa, the Middle East, and South Africa partly saw the impact of additional capacity to Saudi Arabia and South Africa. Just turning to Q4.

Speaker #3: Iberia performance continues to be strong , with routes to Argentina . Argentina continuing to perform well along with routes to Venezuela , Ecuador and Colombia .

Speaker #3: Europe . Unit revenues decreased by 6% on a capacity increase of 2.4% . I've already mentioned weak demand for dwelling , weaker demand for wedding , and the additional capacity from British Airways .

Nicholas Cadbury: I've already mentioned weaker demand for Vueling and the additional capacity from British Airways. In addition, there were FX headwinds from the weak sterling euro, representing about 2 percentage points on unit revenue impact, with Iberia and Aer Lingus performing better. To finish off, Asia Pacific performed well, and Africa, the Middle East, and South Africa partly saw the impact of additional capacity to Saudi Arabia and South Africa. Just turning to Q4.

Speaker #3: In addition , there were FX headwinds from the weak sterling Euro , representing about two percentage points on unit revenue impact with Iberia and Aer Lingus performing better .

Speaker #3: To finish off Asia Pacific performed well and Africa and the Middle East and South Africa partly saw the impact of additional capacity to Saudi Arabia and South Africa .

Speaker #3: Just turning to Q4 . So far . We are pleased with the revenue performance with passenger revenue held positively year on year , including the North Atlantic .

Nicholas Cadbury: We are pleased with the revenue performance, with passenger revenue held positively year-on-year, including the North Atlantic. We did have a particularly good month, good in-month booking in December last year following the EU elections. We do have some tougher comparatives over the next few weeks. Despite this, we are confident about the long-haul markets in particular. While it's a bit further away, H1 is so far looking positively. Just to note, as you've seen, the currency impact on PRASK in Q3 was -2%. In Q4, we currently see higher adverse FX on revenue of around 3.5 percentage points, most of which is due to the average sterling to EUR rate, which was about 1.2 EUR last year. This year looks like it'll be around about 1.15.

Speaker #3: We did have a particularly good month , good in month booking in December last year following the EU elections . So we do have some tougher comparatives over the next few weeks .

Speaker #3: Despite this , we are confident about the long haul market in particular , and while it's a bit further away . H1 is so far looking positively .

Speaker #3: Just to note , as you've seen , the currency impact on Presc in Q3 was -2% . In Q4 . We currently see higher adverse effects on revenue of around three and a half percentage points .

Nicholas Cadbury: Just to note, as you've seen, the currency impact on PRASK in Q3 was -2%. In Q4, we currently see higher adverse FX on revenue of around 3.5 percentage points, most of which is due to the average sterling to EUR rate, which was about 1.2 EUR last year. This year looks like it'll be around about 1.15.

Speaker #3: Most of which is usually average sterling to euro rate , which was about €1.2 last year . And this year looks like it'll be around about 1.15 .

Speaker #3: Clearly , the majority of the translation FX impact on revenue is offset by favourable impact on costs . I guided last quarter that the increase in our Non-fuel unit costs this year would be weighted to the first half of the year , and I'm pleased that we're broadly flat in Q3 compared to 4.6 increase in Q2 .

Nicholas Cadbury: Clearly, the majority of the translation FX impact on revenue is offset by favorable impact on costs. I guided last quarter that the increase in our non-fuel unit costs this year would be weighted to the first half of the year. I'm pleased that we're broadly flat in Q3 compared to +4.6 increase in Q2. This is a good performance overall and in line with our expectations. Currency benefited these unit costs by about 2%. Employee unit costs increased 2.9% due to agreed salary increases, which were only partially mitigated by productivity benefits from more punctual operations. Supply cost inflation was more than offset by procurement driven transformation initiatives, part of our wider transformation program. Ownership unit costs increased by 9%, driven by investments in new aircraft, products, and IT.

Speaker #3: This is a good performance overall , and in line with our expectations . Currency benefited these unit costs by about 2% . Employee unit costs increased 2.9% due to an agreed salary increases , which were only partially mitigated by productivity benefits from more punctual operations .

Nicholas Cadbury: Currency benefited these unit costs by about 2%. Employee unit costs increased 2.9% due to agreed salary increases, which were only partially mitigated by productivity benefits from more punctual operations. Supply cost inflation was more than offset by procurement driven transformation initiatives, part of our wider transformation program. Ownership unit costs increased by 9%, driven by investments in new aircraft, products, and IT.

Speaker #3: Supply cost , inflation was more than offset by procurement driven transformation initiatives . Part of our wider transformation programme . Ownership unit costs increased by 9% , driven by investments in new aircraft , products and it fuel unit costs reduced by almost 11% , driven by lower commodity prices and the fuel consumption savings from the new generation aircraft .

Nicholas Cadbury: Fuel unit costs reduced by almost 11%, driven by lower commodity prices and the fuel consumption savings from the new generation aircraft we're investing in. We continue to expect non-unit non-fuel unit costs to increase around 3% in line with the guidance I gave you at the last quarter. Likewise on fuel, we continue to expect fuel costs to be around EUR 7.1 billion. This slide shows our financial results for the nine months down to net profit. Operating profit increased by around 18%, and pre-exceptional profit after tax increased by approximately 20% to EUR 2.7 billion, which in addition to a lower share count from our share buyback program, drove a 27% increase in adjusted earnings per share. I'm pleased to report that our balance sheet continues to strengthen.

Speaker #3: We investing in . We continue to expect non-unit Non-fuel unit costs to increase around 3% , in line with a guidance I gave you at the last quarter .

Speaker #3: And likewise on fuel , we continue to expect fuel costs to be around €7.1 billion . This slide shows our financial results for the nine months , down to net profit .

Nicholas Cadbury: This slide shows our financial results for the nine months down to net profit. Operating profit increased by around 18%, and pre-exceptional profit after tax increased by approximately 20% to EUR 2.7 billion, which in addition to a lower share count from our share buyback program, drove a 27% increase in adjusted earnings per share. I'm pleased to report that our balance sheet continues to strengthen.

Speaker #3: Operating profit increased by around 18%, and pre-exceptional profit after tax increased by approximately 20% to €2.7 billion. This, in addition to a lower share count from our share buyback program, resulted in over a 27% increase in adjusted earnings per share.

Speaker #3: I'm pleased to report that our balance sheet continues to strengthen. Gross leverage has been reduced to 1.9 times, down from 2.6 at this time last year, driven by the regular maturity of our aircraft financing and paying down IAG bonds.

Nicholas Cadbury: Gross leverage reduced to 1.9x, down from 2.6 at this time last year, driven by the regular maturity of our aircraft financing and paying down IAG bonds. Net debt was relatively flat year-on-year despite the shareholder returns. Net leverage decreased to 0.8x due to the year-on-year profit improvement. We still plan to keep approximately two-thirds of our expected 25 new aircraft deliveries unencumbered. We still expect to spend approximately EUR 3.7 billion on CapEx this year. This is my final slide. I want to remind you about how we think about capital allocation, which is core to how we create long-term value for our shareholders. Our first priority is to maintain our balance sheet strength, targeting net leverage below 1.8x through the cycle, which is a proxy for investment grade.

Speaker #3: Net debt was relatively flat year on year , despite the shareholder returns and net leverage decreased to naught point eight times due to the year on year profit improvement .

Speaker #3: We still plan to keep approximately two-thirds of our expected 25 new aircraft deliveries unencumbered, and we still expect to spend approximately $3.7 billion on CapEx this year.

Nicholas Cadbury: We still expect to spend approximately EUR 3.7 billion on CapEx this year. This is my final slide. I want to remind you about how we think about capital allocation, which is core to how we create long-term value for our shareholders. Our first priority is to maintain our balance sheet strength, targeting net leverage below 1.8x through the cycle, which is a proxy for investment grade.

Speaker #3: This is my final slide. I want to remind you about how we think about capital allocation, which is core to how we create long-term value for our shareholders.

Speaker #3: Our first priority is to maintain our balance sheet strength, targeting net leverage below 1.8 times through the cycle, which is a proxy for investment grade.

Speaker #3: Our second priority is to invest in long term strength of our business . A high at high rates of return , with a focus on rebuilding our fleet , improving our customer experience and enhancing our digital capabilities and advancing our sustainability agenda .

Nicholas Cadbury: Our second priority is to invest in long-term strength of the business, at high rates of return, with a focus on rebuilding our fleet, improving our customer experience, enhancing our digital capabilities, and advancing our sustainability agenda. We're, of course, committed to a sustainable dividend return and are delighted to announce an interim dividend of EUR 220 million. This represents approximately 50% of the anticipated annual total dividend. As with the earnings per share, the dividend per share will also benefit from the share count reduction. Furthermore, with the current 1 billion share buyback program nearly completed, we intend to announce further returns of excess cash to shareholders at our full year 2025 results at the end of February.

Speaker #3: We're , of course , committed to a sustainable dividend return , and I'm delighted to announce an interim dividend of €220 million . This represents approximately 50% of the anticipated annual total dividend .

Nicholas Cadbury: This represents approximately 50% of the anticipated annual total dividend. As with the earnings per share, the dividend per share will also benefit from the share count reduction. Furthermore, with the current 1 billion share buyback program nearly completed, we intend to announce further returns of excess cash to shareholders at our full year 2025 results at the end of February.

Speaker #3: Dividend and as with the earnings per share , the dividend per share will also benefit from the share count reduction . Furthermore , with the current 1 billion share buyback program nearly completed , we intend to announce further returns of excess cash to shareholders at our full year 2025 results at the end of February .

Speaker #3: We are confident of a strong end to the year and feel that this is a more appropriate time for the board to make their decision in line with pre-COVID practices. On that positive note, I will now hand back to Louis.

Nicholas Cadbury: We're confident of a strong end to the year, and feel that this is a more appropriate time for the board to make their decision in line with pre-COVID practices. On that positive note, I will now hand back to Luis.

Speaker #2: Thank you very much, Nicholas. As usual, I would like to remind you of our strategy that focuses on three strategic imperatives.

Luis Gallego: Thank you very much, Nicholas. As usual, I would like to remind you of our strategy that focuses on three strategic imperatives. Firstly, our strong core. We are deploying our capacity in a disciplined, focused way to leverage our market-leading positions. We are building our brands by investing in new, more efficient aircraft and better cabins and services, alongside more efficient operations. Secondly, we are building up our complementary capital light businesses, in particular, IAG Loyalty. Thirdly, we have a robust financial and sustainability framework. By consistently executing these imperatives, we can deliver and maintain targets that we think are both best in class and appropriate for our business through the cycle. As I mentioned earlier, we have now delivered a 15.2% margin over the last 12 months, which is market leading.

Speaker #2: Firstly , our strong core . We are deploying our capacity in a disciplined , focused way to leverage our market leading positions . And we are building our brands by investing in new , more efficient aircraft and better cabins and services alongside more efficient operations .

Speaker #2: Secondly , we are building up our complementary capital light business businesses in particular IAG loyalty . And thirdly , we have a robust financial and sustainability framework .

Luis Gallego: Secondly, we are building up our complementary capital light businesses, in particular, IAG Loyalty. Thirdly, we have a robust financial and sustainability framework. By consistently executing these imperatives, we can deliver and maintain targets that we think are both best in class and appropriate for our business through the cycle. As I mentioned earlier, we have now delivered a 15.2% margin over the last 12 months, which is market leading.

Speaker #2: We are consistently executing these imperatives. We can deliver and maintain targets that we think are both best in class and appropriate for our business through the cycle.

Speaker #2: As I mentioned earlier , we have now delivered a 15.2% margin over the last 12 months , which is market leading . Fundamentally , we believe that delivering earnings growth at this level of margin and return on capital will create substantial value for our shareholders .

Luis Gallego: Fundamentally, we believe that delivering earnings growth at these levels of margin and return capital will create substantial value for our shareholders. As usual, there are a lot of things going on around the group, we have highlighted a few initiatives on this slide. Our network strategy is to focus on our core markets. With increasing scale in our hubs, we offer our customers more choice of destinations and frequencies. We focus on delivering improvements to the customer journey in our aircraft and on the ground, through a combination of the human touch and digital innovation. A good example of this is on our announcement yesterday that we are going to partner with Starlink to provide high-speed connectivity in all of our airlines, with the rollout likely starting early in 2026.

Speaker #2: As usual, there are a lot of things going on around the group, and we have highlighted a few initiatives on this slide.

Speaker #2: Our network strategy is to focus on our core markets with increasing scale in our hubs. We offer our customers more choice of destinations and frequencies.

Speaker #2: We focus on delivering improvements to the customer journey in our aircraft and on the ground, through a combination of the human touch and digital innovation.

Luis Gallego: We focus on delivering improvements to the customer journey in our aircraft and on the ground, through a combination of the human touch and digital innovation. A good example of this is on our announcement yesterday that we are going to partner with Starlink to provide high-speed connectivity in all of our airlines, with the rollout likely starting early in 2026.

Speaker #2: A good example of this is our announcement yesterday that we are going to partner with Starlink to provide high-speed connectivity in all of our airlines, with a rollout likely starting early in 2026.

Speaker #2: And our punctuality as a driver of both customers and efficiency is amongst the best in the world, and in particular has been excellent over the summer.

Luis Gallego: Our punctuality as a driver of both customer satisfaction and efficiency is amongst the best in the world, and in particular, has been excellent over the summer, despite many external headwinds. On-time performance improved across all airlines, with British Airways achieving the best OTP at Heathrow since 2012, up by 10 points year-on-year. NPS also continues to improve around the group, with dwelling NPS hitting a record high this summer. Finally, we are pleased to announce today that IAG Loyalty has signed a multi-year partnership extension with American Express. Moving on to our outlook, our expectations for the 2025 full year are unchanged. As Nicholas has explained, we are booked positively so far for Q4, including the North Atlantic, we are on track to deliver another very good year of revenue and earnings growth, margin progression, and strong shareholder returns.

Speaker #2: Despite many external headwinds . On time performance improved across all airlines , with British Airways achieving the best OTP at Heathrow since 2012 , up by ten points year on year .

Speaker #2: An NPS also continues to improve around the group, with well NPS hitting a record high this summer. Finally, we are pleased to announce today that Loyalty has signed a multi-year partnership extension with American Express.

Luis Gallego: Finally, we are pleased to announce today that IAG Loyalty has signed a multi-year partnership extension with American Express. Moving on to our outlook, our expectations for the 2025 full year are unchanged. As Nicholas has explained, we are booked positively so far for Q4, including the North Atlantic, we are on track to deliver another very good year of revenue and earnings growth, margin progression, and strong shareholder returns.

Speaker #2: Moving on to our outlook , our expectations for the 2025 full year are unchanged , as Nicholas has explained , we are booked positively , positively so far for Q4 , including the North Atlantic .

Speaker #2: So we are on track to deliver another very good year of revenue and earnings growth, margin progression, and strong shareholder returns. Demand for travel is strong, and our fundamentals are proven.

Luis Gallego: Demand for travel is strong, and our fundamentals are proven. We have leading market positions, a great network, powerful brands, and an attractive customer base. Through a transformation program, we are delivering the margins that we are reporting today. We still have a significant number of initiatives to roll out across revenue, cost, and operations. We believe that we can continue to deliver strong value creation for our shareholders through the cycle. I will finish by summarizing those key elements of that business model and our long-term investment case. Strong markets, strong execution, strong value creation. On that note, we will turn the call over to Q&A.

Speaker #2: We have leading market positions, a great network, powerful brands, and an attractive customer base through a transformation programme. We are delivering the margins that we are reporting today, and we still have a significant number of initiatives to roll out across revenue, costs, and operations.

Speaker #2: So, we believe that we can continue to deliver strong value creation for our shareholders through the cycle. So, I will finish by summarizing those key elements of that business model.

Luis Gallego: I will finish by summarizing those key elements of that business model and our long-term investment case. Strong markets, strong execution, strong value creation. On that note, we will turn the call over to Q&A.

Speaker #2: And our long term investment case . Strong market , strong execution , strong value creation . And on that note , we will turn the call over to Q&A .

Speaker #1: Thank you . Ladies and gentlemen , we will now begin the question and answer session . To ask a question on the phone line , please signal by pressing star and then one on your telephone keypad .

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask a question on the phone line, please signal by pressing star and then one on your telephone keypad. We ask that you limit your questions to a maximum of two. We will pause for a moment to assemble the queue. Your first question comes from the line of Alex Irving of Bernstein. Your line is now open.

Speaker #1: We ask that you limit your questions to a maximum of two. We will pause for a moment to assemble the queue. Your first question comes from the line of Alex Irving of Bernstein.

Speaker #1: Your line is now open.

Speaker #4: Hi . Good morning . Two for me , please . We heard from . First of all , we heard from some of your peers about a less peaky summer .

Alex Irving: Hi. Good morning. 2 for me, please. First of all, we heard from some of your peers about a less peaky summer, but with the summer extending into Q4. Does that match your assessment? If so, is that a 2025 factor or a lasting change? What does that mean for how you manage the business? Second, on the North Atlantic, we saw Alaska launching Heathrow. Do they get that slot from your existing joint business? If so, why? Should we see that as a precursor to potentially adding them into the joint business? Thank you.

Speaker #4: But with the summer extending into Q4, does that match your assessment? If so, is that a 2025 factor or a lasting change?

Speaker #4: What does that mean for how you manage the business ? Second , on the North Atlantic , we saw Alaska launching Heathrow . Did they get that slot from your existing joint business ?

Speaker #4: If so, why? And should we see that as a precursor to potentially adding them into that? Thank you.

Speaker #2: Okay . So thank you . So for Q4 Q1 , we can't really have we currently have about 80% of the Q4 booked .

Luis Gallego: Okay. Thank you. For the Q4 and Q1, we currently have about 80% of the Q4 book. The overall revenue performance is good, and the passenger revenue is held positively versus last year. We need to take into consideration that last year was very strong with total PRAS up 3.1% in general, and in North America was up 14%. Performance is different by region. We see improving trends in North Atlantic, and currently revenue is held positive. We see also a strong October and November in North Atlantic. South Atlantic, as we said in the presentation, continue to be strong.

Speaker #2: The overall revenue performance is good, and the passenger revenue is holding positively versus last year. We need to take into consideration that last year was very strong, with a total up 3.1% in general, and in North America, it was up 14%.

Speaker #2: So performance is different by region. We see improving trends in the North Atlantic and currently revenue is held positive. We also see a strong October and November in the North Atlantic, while the South Atlantic, as we said in the presentation, continues to be strong in Europe.

Luis Gallego: In Europe, we continue seeing some softness in intra-Europe. Lately, we have seen improving. Rest of world is also positive. What we can see for Q1 right now with revenues around 30%, the levels of revenue that we have are also above last year. In general, the trend that we see is positive. Q3 was a little weaker. As we said, North Atlantic point of sale, non-premium and transfer traffic had an impact in that. We see that the situation is improving since then. About Alaska, maybe you want to comment, Sean.

Speaker #2: We continue seeing some softness in intra-Europe, but lately we have seen improvement; the rest of the world is also positive. What we can see for Q1 right now is revenues around 30%. The levels of revenue that we have are also above.

Speaker #2: Last year , last year . So in general , the trend that we see is positive . So Q3 was a little weaker as we said , North Atlantic point of sale .

Speaker #2: Non premium and transfer traffic are impact in that . But we see that the situation is improving . Since then and about Alaska , maybe you want to comment on .

Speaker #5: Yeah. Look, I think Alaska is a very important partner to the American NBA. We have a very good connecting partnership over Seattle and two places on the West Coast where they've developed the network over recent years.

[Company Representative] (International Consolidated Airlines Group SA): Yeah. Look, I think Alaska are a very important partner to American Airlines, and we've a very good connecting partnership over Seattle and to places in the West Coast where it has developed the network over recent years. You know, to be premature to talk about entry into any joint business, but we work with Alaska on a very constructive basis and, you know, we would have helped them through the kind of slot process in advance of next summer.

Sean Doyle: Yeah. Look, I think Alaska are a very important partner to American Airlines, and we've a very good connecting partnership over Seattle and to places in the West Coast where it has developed the network over recent years. You know, to be premature to talk about entry into any joint business, but we work with Alaska on a very constructive basis and, you know, we would have helped them through the kind of slot process in advance of next summer.

Speaker #5: You know, it may be premature to talk about entry into any joint business. But we work with Alaska on a very constructive basis.

Speaker #5: And, you know, we would have helped them through the process in advance of next summer.

Speaker #4: All right. Thank you.

Alex Irving: All right. Thank you.

Speaker #1: Your next question comes from the line of James Holland of BNP Paribas. Your line is now open.

Operator: Your next question comes from the line of James Hollins of Exane BNP Paribas. Your line is now open.

Speaker #6: Merci . One for Sean . Please . Maybe you can give us a quick update on the very sort of current news on the US shutdown .

Nicholas Cadbury: Merci. One for Sean, please. Maybe give us a quick update on the very sort of current news on the US shutdown, clearly international flights are protected, but whether you might perceive there's a little bit of reticence on late bookings on your transatlantic network. While you're on, maybe update on the BA digital transformation. I think we're getting into the app coming. Then for Nicholas, full year cost. Let me put it this way. Is there a good chance you beat the 3% guide, particularly with FX and obviously the performance you've had so far? Is there anything specific on costing Q4 that would mean you don't beat 3%? Thank you.

James Hollins: Merci. One for Sean, please. Maybe give us a quick update on the very sort of current news on the US shutdown, clearly international flights are protected, but whether you might perceive there's a little bit of reticence on late bookings on your transatlantic network. While you're on, maybe update on the BA digital transformation. I think we're getting into the app coming.

Speaker #6: And clearly, international flights are protected. But do you perceive there’s a little bit of reticence on late bookings on your transatlantic network?

Speaker #6: And while you're on , maybe update on your BA digital transformation . I think we're getting into the the up coming . And then for Nicolas , fully cost .

James Hollins: Then for Nicholas, full year cost. Let me put it this way. Is there a good chance you beat the 3% guide, particularly with FX and obviously the performance you've had so far? Is there anything specific on costing Q4 that would mean you don't beat 3%? Thank you.

Speaker #6: Let me put it this way: is there a good chance you can beat the 3% guide with FX? And obviously, considering the performance we've had so far?

Speaker #6: Or is there anything specific on costs in Q4 that would mean you don't beat 3%? Thank you.

[Company Representative] (International Consolidated Airlines Group SA): Just on shutdown, I think it's early stages, right now, you know, we're not seeing any impact. I think one thing I would say is we have, it's November, there's lots of kind of abilities to re-accommodate across networks if there's an impact. We fly to 27 points directly in the US, we work with American closely in sort of setting all of those networks. I think, right now it's business as usual, we're not seeing any effect. I think our direct network out of London, if there is any marginal impact on connecting traffic, we'll have plenty of capacity to kind of reabsorb any rebooking that we need to do. In relation to digital transformation, yeah, we are entering an exciting phase.

Sean Doyle: Just on shutdown, I think it's early stages, right now, you know, we're not seeing any impact. I think one thing I would say is we have, it's November, there's lots of kind of abilities to re-accommodate across networks if there's an impact. We fly to 27 points directly in the US, we work with American closely in sort of setting all of those networks.

Speaker #5: Just on , I think it's early stages , but right now , you know , we're not seeing any impact . And I think one thing I would say is we have it's November , so there's lots of kind of ability to accommodate across networks .

Speaker #5: If there is an impact, we’d like to identify 27 points directly in the U.S., and we work closely with Americans in sort of selling over those networks.

Speaker #5: So I think right now it's business as usual , and we're not seeing any effect . But but I think our direct network out of London , if there is any marginal impact on connecting traffic , will have plenty of capacity to , to kind of reabsorb any rebooking that we need to do in relation to digital transformation .

Sean Doyle: I think, right now it's business as usual, we're not seeing any effect. I think our direct network out of London, if there is any marginal impact on connecting traffic, we'll have plenty of capacity to kind of reabsorb any rebooking that we need to do. In relation to digital transformation, yeah, we are entering an exciting phase.

Speaker #5: Yeah. We are entering an exciting phase. About 50% of our bookings on .com now are going through what we call our new booking flow.

[Company Representative] (International Consolidated Airlines Group SA): About 50% of our bookings on ba.com now are going through what we call our new booking flow. That's showing very encouraging results. We're happy with conversion, we're happy with the performance, and we're very happy with the CSAT. We begin to scale the number of bookings we put through that platform as we head in towards the December, January sale period. The vast majority of bookings heading into next summer would have come through that new booking flow. We're in a position that we start rolling out the app facing element of the digital transformation early in 2026. Yeah, it's exciting, and we're very encouraged by what we're seeing.

Sean Doyle: About 50% of our bookings on ba.com now are going through what we call our new booking flow. That's showing very encouraging results. We're happy with conversion, we're happy with the performance, and we're very happy with the CSAT. We begin to scale the number of bookings we put through that platform as we head in towards the December, January sale period.

Speaker #5: And that's showing very encouraging results . We're happy with conversion , we're happy with performance and we're very happy with the CSat . We'll begin to scale the number of bookings we put through that platform as we head into the December , January sale period .

Sean Doyle: The vast majority of bookings heading into next summer would have come through that new booking flow. We're in a position that we start rolling out the app facing element of the digital transformation early in 2026. Yeah, it's exciting, and we're very encouraged by what we're seeing.

Speaker #5: So, the vast, vast majority of bookings heading into next summer will have come through that booking flow. And we're in a position that we start rolling out the app-facing element of the digital transformation early in 2026.

Speaker #5: So, yeah, it's exciting, and we're very encouraged by what we're seeing.

Speaker #3: Yeah , just on the cost side , James , we've got all the MC here . So thanks for putting them under a bit of pressure overall .

Nicholas Cadbury: Yeah, just on the cost side, James, we've got all the MC here, so thanks for putting them under a bit of pressure overall. We're sticking with our kinda 3% guidance at the moment. You can see FX is moving around quite a bit at the moment overall, but we think that's still we're holding on for that at the moment. We're pleased with the progress we've made, particularly with supply costs overall, particularly the kind of process improvements we're putting and the kind of procurement savings we're doing. We're pleased with how that's going.

Speaker #3: But we're sticking with our 3% guidance at the moment. You can see FX is moving around quite a bit at the moment overall.

Speaker #3: But we think we think that still we're holding on on for that at the moment . But we're pleased with the progress we've made , particularly with supplier costs overall , particularly the kind of process improvements we're putting in the and the kind of procurement savings we're doing .

Speaker #3: So, we're pleased with that. That's good.

Speaker #6: Okay . Thank you .

Luis Gallego: Thank you.

James Hollins: Thank you.

Speaker #1: Your next question comes from the line of Stephen Furlong of DV. Your line is now open.

Operator: Your next question comes from the line of Stephen Furlong of Davy. Your line is now open.

Speaker #7: Yeah . Hi there . Maybe for Louise just talking about or thinking about into next year , even in the next summer . I'm just thinking about the competitive environment .

Stephen Furlong: Yeah. Hi there. Maybe for Luis, just talking about or thinking about into next year, even into next summer. I'm just thinking about the competitive environment. Maybe you could talk, maybe go through the regions again, because I'm thinking about things like, let's say, in LatAm. Is there any change? Obviously, you have Turkish investing in Air Europa. I don't know on the other side. In the US, or North Atlantic, I'm thinking about, like, United or, I think it's Delta expanding a lot of capacity. For yourselves in terms of capacity, maybe you'll be able to grow a bit more at Heathrow if there's a bit of an improvement with the trends, et cetera.

Speaker #7: Maybe you could talk . Maybe go through the regions again , because I'm thinking about things like , let's say , in that time , is there any change ?

Stephen Furlong: Obviously, you have Turkish investing in Air Europa. I don't know on the other side. In the US, or North Atlantic, I'm thinking about, like, United or, I think it's Delta expanding a lot of capacity. For yourselves in terms of capacity, maybe you'll be able to grow a bit more at Heathrow if there's a bit of an improvement with the trends, et cetera.

Speaker #7: Obviously , of Turkish investing in Air Europa ? I don't know . On the other side , in the US or North Atlantic , I'm thinking about like United or or I think it's Delta expanding .

Speaker #7: A lot of capacity . And then and then for yourselves in terms of capacity , maybe you'd be able to grow a bit more at Heathrow if there's a bit of an improvement with the Trent , etc.

Speaker #7: . So just talk about the competitive dynamics as you see over the next 12 months in general terms. Thank you.

Stephen Furlong: Just talk about the competitive dynamics as you see over the next 12 months in general terms. Thank you.

Speaker #5: Okay . Thank you .

Luis Gallego: Okay. Thank you. I can comment on the capacity that we see for the next quarters. We need to take into consideration that still the people there are working in the programs for summer next year. What we see, for example, for Q4, Q1 of 2026, is that the capacity from London Heathrow or North Atlantic, London Heathrow is going to decrease in comparison to previous year. That's going to help. We see that the other hubs, the traffic with North Atlantic are going to be more difficult. Dublin, for example, the people there are adding a lot of capacity in winter that is not usual.

Speaker #2: So I can comment on the capacity that we see for the for the next quarter . We need to take into consideration that still the people that are working in in the programs for , for .

Speaker #2: Summer. But what we see, for example, for Q4, the first quarter of 2026, is that capacity from London Heathrow or North Atlantic, London Heathrow, is going to decrease in comparison to the previous year.

Speaker #2: So that's going to help. We see that the other hubs, the traffic with the North Atlantic, are going to be more difficult.

Speaker #2: So Dublin , Dublin for example , the people they are adding a lot of capacity in winter . That is not usual . So we see in the Q4 an increase of capacity of around 16% .

Luis Gallego: We see in Q4 an increase of capacity of around 16% and in Q1, 13%. We are going to have a very tough competitive environment there. Madrid, North Atlantic, Q4, we are going to have an increase in capacity of around 5% and Q1, 10%. It's true that Q3, the increase of capacity was higher. Now the people there are moving capacity from Madrid to other regions in Spain. If we look at Latin America, from London, we see a decrease in capacity in the last quarter and also in Q1. Madrid is going to have an increase of around 4% in Q4 and around 7% in Q1.

Speaker #2: And in the first quarter , 15% . So we are going to have a very tough , competitive environment . There . And Madrid's North Atlantic Q4 , we are going to have an increase in capacity of around 5% .

Speaker #2: And the first quarter , 10% . So it's true that Q3 , the increase of capacity was higher and now the people are moving capacity from Madrid to other regions in , in , in Spain , if we look at Latin America from London , we see a decrease in capacity in the last quarter .

Speaker #2: And also in the first quarter, Madrid is going to have an increase of around 4% in Q4 and around 7% in Q1.

Speaker #2: So but even with this increase in capacity , we are seeing a strong yields and a strong load factors . And the Intra-europe is different in the different shops that we have .

Luis Gallego: Even with this increase in capacity, we are seeing strong deals and strong load factors. The intra-Europe is different in the different hubs that we have. Heathrow, Europe is going to be almost flat. Madrid to Europe is going to be around 7%. Barcelona Europe around 4%. Dublin, Europe again, high increase of capacity of around 12% in Q4 and 15% in Q1. The competitive environment, North Atlantic, we see positive. The trend is true that all the starting capacity. In the joint business, we keep our market share and also in number of premium seats. We continue with a very good position.

Speaker #2: Heathrow, Europe, is going to be almost flat. Madrid, Europe, is going to be around 7%. Barcelona, Europe, is around 4%, and Dublin, Europe, is again seeing a high increase in capacity of around 12% in the fourth quarter.

Speaker #2: And 15% in the in the first quarter . So the competitive environment North Atlantic , we see positive the trend is through that all sertraline capacity .

Speaker #2: But in the joint business . We keep our our market share . And also in number of premium seats . We continue with with a very good position and the other topics that you said , for example , Turkish with Europa I think is going to be an investment of 26% in the company .

Luis Gallego: The other topics that you said, for example, Turkish with Air Europa, I think is going to be an investment of 26% in the company. I suppose they will try to develop the business, but we don't see an impact of that in the short and medium term. I don't know if there was another question.

Speaker #2: I suppose they will try to develop the business , but we don't see an impact of that in the in . The short term , medium term .

Speaker #2: It was, I don't know if there was another question.

Speaker #7: Okay . Thank you .

Stephen Furlong: Okay. Thank you.

Speaker #2: Thank you .

Luis Gallego: Thank you.

Speaker #1: Your next question comes from the line of Jamie Rowbotham of Deutsche Bank. Your line is now open.

Operator: Your next question comes from the line of Jamie Robotham of Deutsche Bank. Your line is now open.

Speaker #8: Morning , gentlemen . Two from me , please . First , almost certainly for Nicolas on buybacks . So on slide 11 , you reiterate the plan to return cash to maintain leverage of 1.2 to 1 point times net debt to EBITDA .

Jamie Robotham: Morning, gentlemen. Two from me, please. First, almost certainly for Nicholas on buybacks. On slide 11, you reiterate the plan to return cash to maintain leverage of 1.2 to 1 times net debt to EBITDA. It's obvious question, but if we assume you're still at 0.8 times by year end, it would imply a quite staggering EUR 3 to 5 billion of potential headroom. Is it as simple as that, Nicholas? Presumably at the lower end of that range, you could leave some buffer for potential M&A opportunities like TAP. Second question is just really on short-haul. Could you remind us what the plan is for Vueling next year? I think there were some clues there in what Luis said about capacity out of Barcelona. It seems like the short-haul environment's a little bit tougher for you.

Jaime Rowbotham: Morning, gentlemen. Two from me, please. First, almost certainly for Nicholas on buybacks. On slide 11, you reiterate the plan to return cash to maintain leverage of 1.2 to 1 times net debt to EBITDA. It's obvious question, but if we assume you're still at 0.8 times by year end, it would imply a quite staggering EUR 3 to 5 billion of potential headroom. Is it as simple as that, Nicholas?

Speaker #8: If it's an obvious question, but if we assume you're still at 0.8 times by year-end, it would imply a quite staggering €3 to €5 billion of potential headroom.

Speaker #8: Is it as simple as that, Nicolas? And presumably, at the lower end of that range, you could leave some buffer for potential M&A opportunities like TAP.

Jaime Rowbotham: Presumably at the lower end of that range, you could leave some buffer for potential M&A opportunities like TAP. Second question is just really on short-haul. Could you remind us what the plan is for Vueling next year? I think there were some clues there in what Luis said about capacity out of Barcelona. It seems like the short-haul environment's a little bit tougher for you.

Speaker #8: The second question is really on short haul. Could you remind us what the plan is for dwelling next year? I think there were some clues in what Luis said about capacity.

Speaker #8: Out of Barcelona. It seems like the short-haul environment is a little bit tougher for you. You talked about weaker demand.

Jamie Robotham: You talked about weaker demand, Benelux, Germany, UK, not offsetting strength in other areas. Some comments please on short-haul outlook and the plan for Vueling. Thanks very much.

Jaime Rowbotham: You talked about weaker demand, Benelux, Germany, UK, not offsetting strength in other areas. Some comments please on short-haul outlook and the plan for Vueling. Thanks very much.

Speaker #8: Benelux , Germany , UK , not offsetting strength in other areas . So some comments please . On on short haul outlook and the plan for dwelling .

Speaker #8: Thanks very much .

Speaker #3: Yeah . So just start with shareholder returns . So this this year will have returned by the time we get to the year end .

Luis Gallego: Yeah. Just start with shareholder returns. This year we'll have returned, by the time we get to the year-end, we've returned EUR 1.2 billion of share buybacks and EUR 400 million of dividends, equals to EUR 1.6 billion in total. We haven't quite finished the share buyback, so we'll finish that over the next month or so overall. We've kind of held back on doing the next shareholder return to year-end just to get it back into a normal process. We did this exceptional one we did last year just 'cause it was the beginning of the process. We'll just get back into the normal swing of it. It's a normal year-end decision that we have overall. We can hopefully, we've kind of said in our

Nicholas Cadbury: Yeah. Just start with shareholder returns. This year we'll have returned, by the time we get to the year-end, we've returned EUR 1.2 billion of share buybacks and EUR 400 million of dividends, equals to EUR 1.6 billion in total. We haven't quite finished the share buyback, so we'll finish that over the next month or so overall.

Speaker #3: We returned $1.2 billion in share buybacks and $400 million in dividends, for a total of over $1.6 billion. We haven't quite finished the share buyback.

Speaker #3: So we'll finish that over the next month or so . Overall , we've kind of held back , kind of doing the next shareholder return to year end just to get it back into a normal process .

Nicholas Cadbury: We've kind of held back on doing the next shareholder return to year-end just to get it back into a normal process. We did this exceptional one we did last year just 'cause it was the beginning of the process. We'll just get back into the normal swing of it. It's a normal year-end decision that we have overall. We can hopefully, we've kind of said in our statement that we're confident in, gonna give you share further returns later on in the year overall.

Speaker #3: We did some exceptional ones that we did last year just because it was the beginning of the process . But we'll just get back into the normal swing of it and it's a normal year end decision that we have overall , but we're going to hopefully we've kind of said in our statement that we'll we're confident in kind of giving you share further returns later on in the year .

Nicholas Cadbury: Statement that we're confident in, gonna give you share further returns later on in the year overall. Just in terms of the kind of way we think about it, as you said, we've got that range of 1.2 to 1.5 net leverage below that overall. I think kind of where us at the moment, we've got some increasing capital coming over the next few years, as you say, the TAP, so we'll probably manage more towards the bottom end of that range rather than the top end of that range overall, but that still gives us kind of quite a lot of flexibility overall. We've had 1 or 2 analysts kind of saying that, you know, not giving shareholder buybacks for this quarter may show a kind of lack of confidence in the kind of future trading.

Speaker #3: Overall , just in terms of the kind of way we think about it , as you said , we got that range of 1.2 to 1.5 net leverage below that overall , I think kind of at the moment we've got some increasing capital coming over the next few years .

Nicholas Cadbury: Just in terms of the kind of way we think about it, as you said, we've got that range of 1.2 to 1.5 net leverage below that overall. I think kind of where us at the moment, we've got some increasing capital coming over the next few years, as you say, the TAP, so we'll probably manage more towards the bottom end of that range rather than the top end of that range overall, but that still gives us kind of quite a lot of flexibility overall. We've had 1 or 2 analysts kind of saying that, you know, not giving shareholder buybacks for this quarter may show a kind of lack of confidence in the kind of future trading.

Speaker #3: And as you say, the tap. So we'll probably manage more towards the bottom end of that range rather than the top end of that range overall.

Speaker #3: But that still gives us kind of quite a lot of flexibility overall . We've had 1 or 2 analysts kind of saying that , you know , not giving shareholder buybacks for this quarter may show a kind of lack of confidence in the kind of future trading , I think , kind of after the strong quarter we've just had .

Nicholas Cadbury: I think kind of after the strong quarter we just had and the fact that we've just said that we're booked positively for the year end as well, and kind of confidence in our overall strategy, we kind of find that's obviously a personal statement, but it doesn't reflect the confidence we have in our own business.

Speaker #3: And the fact that we've just said that we're booked positively for the year end as well and kind of confidence on our overall strategy , we kind of find that that that's obviously a personal statement , but it doesn't reflect the confidence we have in our own business .

Speaker #2: So and about the so-called onboarding , but the Q3 , the point to point traffic was okay . And we suffered in the in the transfer traffic .

Luis Gallego: About the shortfall, and maybe Carolina is gonna expand on boarding. The Q3 point to point traffic was okay. We suffer in the transfer traffic, as I said previously. In the Q4, what we see is that competition is high. In Q4, intra Europe capacity is going to raise around close to 6%. We have different performance in different countries. For example, there are markets that are working very well for us. We need also to take into consideration the impact of the FX in the Q4 that is going to be relevant. Maybe Carolina can comment on boarding.

Speaker #2: As I said previously in the Q4 , what we see is that competition is is high in Q4 in Europe , capacity is going to raise around close to 6% , but we have different performance in different countries .

Speaker #2: And for example , there are markets that are working very well for us . We need also to take into consideration the impact of the FX in the in the Q4 .

Speaker #2: That is going to be relevant, but maybe I can comment on...

Speaker #5: Sure .

Carolina: Sure. If we look at Q3, I think it's a mixed bag as you can see. Some markets work very well. Domestic worked very well for us. As Nicholas said before, we had some specific markets with a weak performance. Germany, UK, Netherlands. Netherlands very linked to the tax situation there. We have a very strong position in Barcelona and we offer from there over 100 routes. It's a constrained airport, and we have one third of domestic traffic. We are very used to face strong competition, but we are positive about our ability to compete. If you look at our RASK, a good part of that is self-dilution. We have decided consciously to invest in some markets. Canary is a good example.

Carolina Martinoli: Sure. If we look at Q3, I think it's a mixed bag as you can see. Some markets work very well. Domestic worked very well for us. As Nicholas said before, we had some specific markets with a weak performance. Germany, UK, Netherlands. Netherlands very linked to the tax situation there. We have a very strong position in Barcelona and we offer from there over 100 routes. It's a constrained airport, and we have one third of domestic traffic.

Speaker #9: If we look at Q3, I think it's a mixed bag, as some markets work very well. Domestic worked very well for us.

Speaker #9: As Nicolas said before , we had some specific markets with a weak performance . Germany , UK , Netherlands , Netherlands , very linked to the tax situation .

Speaker #9: There, but we have a very strong position in Barcelona, and we offer over 100 routes from there. It's a constrained airport, and we have one third of domestic traffic.

Speaker #9: So we are very used to face a strong competition , but we are positive about our ability to to compete . If you look at our website , a good part of that is self dilution .

Carolina Martinoli: We are very used to face strong competition, but we are positive about our ability to compete. If you look at our RASK, a good part of that is self-dilution. We have decided consciously to invest in some markets. Canary is a good example.

Speaker #9: So, we have decided consciously to invest in some markets. Cannabis is a good example. We have grown over 30% in January, but we are already seeing the results of that investment.

Carolina: We have grown over 30% in Canary. We are already seeing the results of that investment. Although you are right, it's gonna be very competitive, I think we have a good position to compete in our core markets.

Carolina Martinoli: We have grown over 30% in Canary. We are already seeing the results of that investment. Although you are right, it's gonna be very competitive, I think we have a good position to compete in our core markets.

Speaker #9: So, although you are right, it's going to be very competitive. I think we have a good position to compete in our core markets.

Speaker #8: Great answers. Thank you.

Luis Gallego: Great answers. Thank you.

Jaime Rowbotham: Great answers. Thank you.

Speaker #1: Your next question comes from the line of Savi Seth, Raymond James. Your line is now open.

Operator: Your next question comes from the line of Savi Syth of Raymond James. Your line is now open.

Speaker #10: Hey . Good morning . Maybe for Nicholas . I'm not looking for guidance or anything like that , but I was wondering if you could talk a little bit about as you look out to 20 , 26 , just across the kind of the main cost items , just generally what you are expecting in terms of inflation and , and anything , any kind of offsets or headwinds and tailwinds that we should think about .

Savi Syth: Hey, good morning. Maybe for Nicholas, I'm not looking for guidance or anything like that, but I was wondering if you could talk a little bit about as you look out to 2026, just across the kinda the main cost items, just generally what you kinda are expecting in terms of inflation and anything, any kind of offsets or headwinds or tailwinds that we should think about.

Nicholas Cadbury: Yeah. I mean, we're not giving guidance for 2026, overall at the moment. You know, I think all I'm gonna say just on the cost base as well, we've given kind of clarity for the last kind of 2 quarters on this year, which we're confident delivering. We've just delivered a good quarter on the cost base overall. They'll be up about 3% year-over-year on non-fuel cost. I'm expecting kind of with the transformation program and also with kind of some, hopefully some kind of easing inflation overall, that kind of number should moderate into next year overall.

Speaker #3: Yeah , we're not giving guidance for 2026 over overall at the moment . You know , I think all I'm going to say , just on the cost base as well , we've given kind of clarity for the last two quarters on this year , which we're confident of living .

Speaker #3: We've just delivered a good quarter on the cost base overall , so they'll be up about 3% year on year . On Non-fuel costs .

Speaker #3: I'm expecting, kind of with the transformation program and also with some hopefully some kind of easing inflation overall, that that number should moderate into next year.

Speaker #3: Overall .

Speaker #10: That's helpful. And if I might just also ask, just on the demand side, if you can kind of give a little bit more color between just kind of corporate versus premium versus kind of maybe the economy and leisure.

Savi Syth: That's helpful. If I might just also ask just on the demand side, if you could kind of give a little bit more color between just kind of corporate versus, premium versus, kind of maybe the economy leisure?

Luis Gallego: Yes. I think that, if we look at business traffic year to date, we have volumes around in total at group level of around 70% of the volumes that we have in 2019, and revenue is close to 87%. Situation is improving, but slowly and with a very different performance in the different airlines. For example, in British Airways, 62%, 63%, 82% revenue. In Iberia, close to 80% in volume and above 100% in revenue. In Aer Lingus, close to 100% in volume and similar in revenue. With this, we expect to finish 2025 with business revenue above what we had last year. If we look at the volumes in Q3, we saw a decline in comparison with last year.

Speaker #2: I think that if we look at business traffic year today , we have volumes around in total at group level of around 70% of the volumes that we had in 2019 .

Speaker #2: And revenues are close to 87%. So the situation is improving, but slowly and with very different performance among the different airlines.

Speaker #2: So for example , in British Airways , 6,263% , 82% in revenue in Iberia , close to 80% in volume and above 100% in revenue .

Speaker #2: And in close to 100% in volume, and similar in revenue. So with this, we expect to finish 2025 with business revenue above what we had last year.

Speaker #2: If we look at the volumes in in Q3 , we saw a decline in comparison with last year . But what we see now in the Q4 is , is positive .

Luis Gallego: What we see now in Q4 is positive. For example, in British Airways, we are seeing now growth in North Atlantic, both the UK and North Atlantic, point of sale. We think that this is going to help to the recovery. In any case, as I said, in some way, we are in a stable situation and the improvement is slowly. In any case, when COVID started, we said that we were expecting to come back to levels of revenue of around 85% of the revenue we had in 2019, and we are above that. The good news is that we are delivering these strong results with this percentage of business traffic.

Speaker #2: For example, in British Airways, we are seeing growth in the North Atlantic, both in the UK and the North Atlantic point of sale.

Speaker #2: So we think that this is going to help to the recovery . But in any case , as I said , in some way , we are in a stable situation and the improvement is slowly .

Speaker #2: In any case, when COVID started, we said that we were expecting to come back to levels of revenue of around 85% of revenue in 2019, and we are above that.

Speaker #2: And the good news is that we are delivering this strong results with the percentage of of business traffic , what it means that our model is very is working very well .

Luis Gallego: What it means, that, our model is working very well also with the premium leisure traffic.

Speaker #2: Also with the premium leisure traffic.

Speaker #10: That's helpful. Thank you.

Operator: That's helpful. Thank you.

Savi Syth: That's helpful. Thank you.

Speaker #2: Welcome .

Nicholas Cadbury: Welcome.

Luis Gallego: Welcome.

Speaker #1: Your next question comes from the line of Harry Gowers of J.P. Morgan. Your line is now open.

Operator: Your next question comes from the line of Harry Gowers of J.P. Morgan. Your line is now open.

Speaker #11: Yeah . Good morning everyone . Two questions . If I could the first one just if I could ask on your positively booked revenue comments for Q4 .

Harry Gowers: Yeah. Good morning, everyone. Two questions if I could. The first one, just if I could ask on your positively booked revenue comments for Q4, if you could maybe clarify how positively booked we're talking.

Speaker #11: If you could maybe clarify how positively booked we're talking, and could we end up seeing RASK higher year over year for Q4 versus last year?

Nicholas Cadbury: Mm-hmm.

Harry Gowers: Could we end up seeing RASK higher year-over-year for Q4 versus last year? The second question, I was just wondering if you could go into some color on the UK point of sale on Transatlantic and also UK point of sale on short haul as well, and if we're seeing any demand weakness or price sensitivity. Thanks a lot.

Speaker #11: And then the second question, I was just wondering if you could go into some color on the U.K. point of sale on transatlantic and also U.K.

Speaker #11: point of sale on on short haul as well . And if we're seeing any demand weakness or , or price sensitivity , thanks a lot .

Nicholas Cadbury: Yeah. Just, Harry, I'd love to give you more detail, but I hope that's about as much as we can give you this, but positively overall. I mean, we're currently, we've had a good October and November. You know, particularly seeing actually point of sale in North America being good on both sides, actually from UK and from the US as well. Actually US leisure point of sale in the last few weeks has been a bit better as well, which is good to see. The only thing we're just calling out is we had a particularly strong December last year across the Atlantic. You know, after Atlantic, there was a bit of kind of pent-up demand, and we saw it very strong.

Speaker #3: So, just I'm Harry. I'd love to give you more detail, but I think that's about as much as we can give you.

Speaker #3: It's booked, but positively overall. I mean, we're currently seeing that we've had a good October and November. You know, particularly seeing, as you pointed out, our point of sale in North America being good on both sides, actually from the U.K.

Nicholas Cadbury: America being good on both sides, actually from UK and from the US as well. Actually US leisure point of sale in the last few weeks has been a bit better as well, which is good to see. The only thing we're just calling out is we had a particularly strong December last year across the Atlantic. You know, after Atlantic, there was a bit of kind of pent-up demand, and we saw it very strong.

Speaker #3: and and from the US as well . And actually US leisure point of sale in the last few weeks has been been a bit better as well , which is good to to to see .

Speaker #3: The only thing we just calling out is we had a particularly strong December last year across the Atlantic . After the Atlantic , there was a bit of kind of pent up demand , and we saw it very strong .

Speaker #3: So we're just about to enter those weeks , but we're feeling pretty positive about it over overall . So I think that's all we can say .

Nicholas Cadbury: We're just about to enter those weeks, but we're feeling pretty positive about it, overall. I think that's all we can say overall. ASKs are gonna be up about 2.3% in the quarter as well.

Speaker #3: and ask is going to be up about 2.3% in the in the quarter as well .

Speaker #5: Yeah , just on UK segments in terms of the booking profile , you know , Q3 we were positive across both business and premium and Non-premium leisure and Q4 it's a little bit more positive , but we don't commit to the specifics .

[Company Representative] (International Consolidated Airlines Group SA): Yeah. Just on the UK segments in terms of the booking profile, you know, Q3, we were positive across both business, and premium and non-premium leisure. In Q4 it's a little bit more positive, but we don't go into the specifics. Yeah, we're seeing stable demand is the best way I would describe it. That's relevant I think, you know... It's prevalent in both Europe and/or US markets, as Nicholas said.

[Company Representative] (International Airlines Group): Yeah. Just on the UK segments in terms of the booking profile, you know, Q3, we were positive across both business, and premium and non-premium leisure. In Q4 it's a little bit more positive, but we don't go into the specifics. Yeah, we're seeing stable demand is the best way I would describe it. That's relevant I think, you know... It's prevalent in both Europe and/or US markets, as Nicholas said.

Speaker #5: So yeah , we're seeing stable demand as the best way to describe it . And that's relevant . I think , you know , it's prevalent in both Europe and or or US markets .

Speaker #5: As Nicholas said .

Speaker #11: Great . Thank you .

Harry Gowers: Great. Thanks very much.

Speaker #3: "Ask your question, Harry. Is that your question?"

Nicholas Cadbury: Does that answer your question, Harry?

Harry Gowers: Yeah. Yeah.

Nicholas Cadbury: Is that all your questions?

Speaker #11: Thanks a lot .

Harry Gowers: Thanks a lot.

Speaker #1: Next question comes from the line of Conor Dwyer of Citibank. Your line is now open.

Operator: Next question comes from the line of Conor Dwyer of Citibank. Your line is now open.

Speaker #12: Thank you very much . I'd love to come back a little bit to the buyback question . Nicholas , you talked a little bit about managing towards the lower end of that range of 1.2 times to allow for some potential M&A , things like that .

Conor Dwyer: Thanks very much. I'd like to come back a little bit to the buyback question. Nicholas, you obviously talked a little bit about managing towards the lower end of that range of 1.2 times to allow for some, you know, potential M&A, things like that. Obviously that still implies basically you can pay out frankly more than your free cash over the next few years. Is that really how we should be thinking about this? Or are there other things in there that may move that leverage number away from that, from that kind of level? Second question was just actually on the loyalty. Growing revenue at about 7%. Obviously, that growth has been extremely high in recent years. I'm just kind of wondering, are you now kind of viewing that business as a bit more mature now?

Speaker #12: But obviously that's still implies . Basically , you can pay out more than your free cash over the next few years . Is that really how we should be thinking about this , or are there other things in there that might move that leverage number away from that , from that kind of level and second question is essentially on the loyalty .

Conor Dwyer: Second question was just actually on the loyalty. Growing revenue at about 7%. Obviously, that growth has been extremely high in recent years. I'm just kind of wondering, are you now kind of viewing that business as a bit more mature now?

Speaker #12: So growing revenue at about 7% , obviously , that growth has been extremely high in recent years . And just kind of wondering , are you now kind of viewing that business as a bit more mature now , or should we be really kind of thinking that as a kind of mid-single digit percentage growth business ?

Conor Dwyer: Should we be really kind of thinking about it as a kind of mid-single digit percentage growth business? Thank you very much.

Speaker #12: Thank you very much .

Speaker #3: Yeah , just on the share buyback . Yeah . I mean , we set out the guidelines for where we want to to manage our balance sheet to overall .

Nicholas Cadbury: Just on the share buyback. I mean, we set out the guidelines from where we want to manage our balance sheet too overall. I think when we did that, we kind of said, you know, the things that we'll be looking out for. It's a forward-looking thing rather than backwards necessary. We'll be looking forward to, you know, how does the outlook look. We're feeling pretty positive about that at the moment. We also look at what M&A is on the horizon. There's TAP maybe potentially overall. There's also kind of CapEx. What's our CapEx commitments looking forwards as well. CapEx, as we know, is about EUR 3.7 billion this year. Next year, it'll be more about EUR 4 billion.

Speaker #3: And I think when we did that , we kind of said , you know , the things that we'd be looking out for , it's a forward looking thing rather than a backwards necessarily .

Speaker #3: So, we'll be looking forward to how the outlook looks. We're feeling pretty positive about that at the moment. We also look at what M&A is on the horizon as Tap, maybe potentially overall.

Nicholas Cadbury: We also look at what M&A is on the horizon. There's TAP maybe potentially overall. There's also kind of CapEx. What's our CapEx commitments looking forwards as well. CapEx, as we know, is about EUR 3.7 billion this year. Next year, it'll be more about EUR 4 billion.

Speaker #3: And there's also kind of CapEx. What are our CapEx commitments looking forward as well? Now, CapEx, as we know, is about $3.7 billion this year.

Speaker #3: Next year , probably more about four 4 billion . But we know over the next few years after that , it starts to ramp up .

Nicholas Cadbury: We know over the next few years after that, it starts to ramp up, and that's why we could be man-managing towards the bottom end of that and making sure we've got some good headroom and ready for that overall.

Speaker #3: And that's why we could be managing towards the bottom end of that and making sure we've got some good headroom ready for that.

Speaker #3: Overall . So .

[Company Representative] (International Consolidated Airlines Group SA): Yeah. On the loyalty side, just to come back on that specifically. Yeah, we are continuing to see. If you look at the year-to-date performance, because there are some specifics around promotions, particularly around issuance of the points. If you look at it across the year, we're still seeing double-digit growth in terms of the currency that's being issued and there or thereabout on usage of those points and how those points are redeemed. I think we're seeing a continued growth and a continued double-digit growth that we've seen over previous years.

[Company Representative] (International Airlines Group): Yeah. On the loyalty side, just to come back on that specifically. Yeah, we are continuing to see. If you look at the year-to-date performance, because there are some specifics around promotions, particularly around issuance of the points. If you look at it across the year, we're still seeing double-digit growth in terms of the currency that's being issued and there or thereabout on usage of those points and how those points are redeemed. I think we're seeing a continued growth and a continued double-digit growth that we've seen over previous years.

Speaker #5: On the loyalty side, just to come back on that.

Speaker #3: Specifically .

Speaker #5: Yeah , we .

Speaker #3: We are continuing to see if.

Speaker #5: You look .

Speaker #3: At the year to date performance because there are some specific around promotions around . particularly around issuance . of the .

Speaker #5: Points .

Speaker #3: So, if you look at it.

Speaker #5: Across the year .

Speaker #3: We're still .

Speaker #5: Seeing double digit growth .

Speaker #3: In terms of the currency that's being issued.

Speaker #5: And there or thereabouts on on . usage of those points . So those points are redeemed . So .

Speaker #3: I think we're seeing .

Speaker #5: A continued growth and a continued double-digit growth that we've seen over previous years.

Speaker #12: Great. Thank you very much, both.

Conor Dwyer: Great. Thank you very much, both.

Speaker #1: Your next question comes from the line of Rory Cullinan of RBC Capital Markets. Your line is now open.

Operator: Your next question comes from the line of Ruairi Cullinane of RBC Capital Markets. Your line is now open.

Speaker #13: Yes . Good morning . First question on cargo revenue decline . Should we expect similar dynamics in Q4 , given another strong prior year comp and then just coming back to the unit revenues , do you think the North Atlantic trends you've seen with suggestive of a Liberation Day headwind , which may now be fading , given the improvement ?

Ruairi Cullinane: Yes. Good morning. First question on cargo revenue decline. Should we expect similar dynamics in Q4, given another strong prior year comp? Just sort of coming back to the unit revenues, do you think the North Atlantic trends you've seen were suggestive of a Liberation Day headwind, which may now be fading given the improvement looking forward? Thank you.

Speaker #13: Looking forward. Thank you.

Nicholas Cadbury: Yeah. Just on cargo. Yes, you're right. I think we're seeing actually the supply, the demand for cargo is still relatively good. You can see that our weight we're carrying is still up overall, but we're just seeing some softness in yields. As we said in the call, that's really based on the fact that we're anniversarying the high yields we had as there was a lot of disruption over the Red Sea last year overall. That's just the supply chain around that is just kind of normalizing overall, and you'll see that probably into Q4 as well. The North Atlantic, I'm not sure we can anything else we can really say about that overall. I mean, Liberation Day was in April overall.

Speaker #3: Yeah , just on on cargo . Yes . You're right . I think we're seeing we're seeing actually the the supply the demand for cargo still relatively good .

Speaker #3: And you can see that our wait, wait, we're carrying is still up overall. But we're just seeing some softness in yields.

Speaker #3: And as we said in the call, that's really based on the fact that we're anniversarying the high yields we had, as there was a lot of disruption over the Red Sea last year.

Speaker #3: And that's just the supply chain around that is just kind of normalizing overall. And you'll see that probably into Q4 as well.

Nicholas Cadbury: That's just the supply chain around that is just kind of normalizing overall, and you'll see that probably into Q4 as well. The North Atlantic, I'm not sure we can anything else we can really say about that overall. I mean, Liberation Day was in April overall.

Speaker #3: In North Atlantic . I'm not sure I'm not sure we can anything else we can really say about that overall . I mean , Liberation Day was in April .

Speaker #3: Overall . That .

[Company Representative] (International Consolidated Airlines Group SA): Yes. Yes. as we said, in Q3, we were below what we expected. Since then, we see a recovery, and as Nicholas said before-

Luis Gallego: Yes. Yes. as we said, in Q3, we were below what we expected. Since then, we see a recovery, and as Nicholas said before-

Speaker #5: Yes .

Speaker #2: I've will said in Q3 , we were below what we expected , but since then we see our recovery . And as Nicholas said before , we see an improving trend with a strong October and November and we are positively so .

Luis Gallego: We see an improving trend with a strong October and November, and we are booked positively. I think the effect of the Liberation Day is far away.

Speaker #2: I think the effect of the Liberation Day . Is , is far away .

Speaker #1: Your next question comes from the line of Andrew Lobenberg of Barc. Your line is now open.

Operator: Your next question comes from the line of Andrew Lobbenberg of Barclays. Your line is now open.

Andrew Lobbenberg: Morning, guys. Can I ask two questions? One on what labor relations lie ahead. I think there are some at BA, but perhaps you can correct me on that and whether there are any elsewhere in the group. Second question. I'd quite like to hear your thoughts around the situation at Aena, where, I mean, obviously you want low airport charges, I can imagine. It appears that the airport company is becoming something of a political football in Spain, and its plans to develop the infrastructure are potentially being threatened. Where do you sit? Obviously, you do want beautiful facilities for very low costs, but how do you think about your key partner providing infrastructure in Spain being such a political football?

Speaker #14: Morning , guys . Can I ask two questions ? One on what labor relations are lie ahead . I think there are some at BA , but perhaps you can correct me on that .

Speaker #14: And whether there are any elsewhere in the group . Second question , I'd quite like to hear your thoughts around the situation at Iona , where , I mean , obviously you want low airport charges .

Speaker #14: I can imagine, but it appears that the airport company is becoming something of a political football in Spain, and its plans to develop the infrastructure are potentially being threatened.

Andrew Lobbenberg: It appears that the airport company is becoming something of a political football in Spain, and its plans to develop the infrastructure are potentially being threatened. Where do you sit? Obviously, you do want beautiful facilities for very low costs, but how do you think about your key partner providing infrastructure in Spain being such a political football?

Speaker #14: So, where do you sit? Obviously, you do want beautiful facilities for very low costs, but how do you think about your key partner providing infrastructure in Spain being such a political football?

Speaker #2: Well , thank you . So about the labor situation , I think we have closed the the most important agreements at group level .

Luis Gallego: Thank you. About the labor situation, I think we have closed the most important agreements at group level. We are still negotiating some places like Iberia with the ground staff. Maybe, Marco, you can comment on that later. We have now a difficult situation in Manchester where, as you know, we have a strike, and it's probable that we are going to continue with a strike. I mean, Aer Lingus, they need to negotiate the agreement with the different collectives. And in Vueling also, some of the agreements, they expire at the end of this year, and they are negotiating. Maybe you can comment maybe in the situation in Manchester.

Speaker #2: We are still negotiating with some places, like Iberia, with the ground staff, maybe. You can comment on that later. We have now.

Speaker #2: A situation, a difficult situation in Manchester where, as you know, we have a strike, and it is probable that we are going to continue with a strike.

Speaker #2: And in Air they need to to negotiate the agreement with a different collectives . And also some of the agreements they expired at the end of the this year and and they are negotiating .

Luis Gallego: I mean, Aer Lingus, they need to negotiate the agreement with the different collectives. And in Vueling also, some of the agreements, they expire at the end of this year, and they are negotiating. Maybe you can comment maybe in the situation in Manchester.

Speaker #2: So maybe you can comment on the situation in Manchester.

Speaker #15: Yeah the the just about Manchester in context . First of all it's two aircraft there in Manchester base . It flies transatlantic . We're managing through the strike .

Sean: The, just to put Manchester in context, first of all, it's 2 aircraft there at the Manchester base that flies transatlantic. We're managing through the strike. We've been re-accommodating more than 90% of our customers in strike dates so far. You know, we reached agreement with Unite on 2 separate occasions. They put a recommended deal to the members, which the members rejected. We've benchmarked pay, we've been working through ACAS. I think the key thing here is we need to be cost competitive. Manchester needs to perform financially. It needs to justify its asset allocation. We're part of a group where capital is constrained and distributed, where returns can be made the most, and I'm very conscious of that when we look into our industrial relation situations.

Carolina Martinoli: The, just to put Manchester in context, first of all, it's 2 aircraft there at the Manchester base that flies transatlantic. We're managing through the strike. We've been re-accommodating more than 90% of our customers in strike dates so far. You know, we reached agreement with Unite on 2 separate occasions. They put a recommended deal to the members, which the members rejected. We've benchmarked pay, we've been working through ACAS. I think the key thing here is we need to be cost competitive.

Speaker #15: We've been accommodating. We've accommodated more than 90% of our customers on the strike date so far. We reached an agreement with Unite on two separate occasions, and they put the recommended deal forward for their members, which the members rejected.

Speaker #15: So, we've benchmarked pay. We've been working through Acas. I think the key thing here is that we need to be cost competitive.

Carolina Martinoli: Manchester needs to perform financially. It needs to justify its asset allocation. We're part of a group where capital is constrained and distributed, where returns can be made the most, and I'm very conscious of that when we look into our industrial relation situations.

Speaker #15: Manchester needs to be able to perform financially . It needs to justify its asset allocation . We're part of a group where capital is constrained and distributed , where returns can be made the most , and I'm very conscious of that .

Speaker #15: When we look into our industrial relations situations.

Speaker #5: Okay .

Luis Gallego: Okay. Maybe, Marco, you want to comment on the ground as that?

Speaker #2: And maybe you want to comment on the ground stuff.

Speaker #16: Yeah , indeed . In terms of the labor relations in Iberia last year , there was a major milestone that was achieved . It was to set the new collective agreement with our pilots that , as you know , is a system where we share the benefits of the results of the company , not only linking the pay evolution and the one off evolutions and payment to the results of the group .

Marco: Yeah. Indeed, in terms of the labor relations in Iberia last year, there was a major milestone that was achieved. It was to set the new collective agreement with our pilots that, as you know, is a system where we share the benefits of the results of the company. Not only linking the pay evolution and the one-off evolutions and payments to the EBIT results of the group, but also to the productivity of our staff to the NPS and the OTP, so the capability to deliver to our customers. The same has been achieved this year with our cabin crews.

Marco Sansavini: Yeah. Indeed, in terms of the labor relations in Iberia last year, there was a major milestone that was achieved. It was to set the new collective agreement with our pilots that, as you know, is a system where we share the benefits of the results of the company. Not only linking the pay evolution and the one-off evolutions and payments to the EBIT results of the group, but also to the productivity of our staff to the NPS and the OTP, so the capability to deliver to our customers. The same has been achieved this year with our cabin crews.

Speaker #16: But also to the productivity of our staff , to the MPs and the OTP . So the capability to deliver to our customers and the same has been achieved .

Speaker #16: This year with our cabin crews , and we've just started now . The process of opening the negotiation with our ground personnel , and we're confident that the same scheme and system , of course , with the nuances for the specific collectives , can be applied also .

Marco: We've just started now the process of opening the negotiation with our ground personnel, and we're confident that the same scheme and system, of course, with the nuances for the specific collectives can be applied also there. It's very beneficial also for the people. Where remark, as you know, we also introduced the possibility for people to buy shares and become shareholders. More than thousands of our staff currently have subscribed to that. That is another element of sharing the benefits of the results of the company. Maybe a comment in terms of the Aena situation.

Marco Sansavini: We've just started now the process of opening the negotiation with our ground personnel, and we're confident that the same scheme and system, of course, with the nuances for the specific collectives can be applied also there. It's very beneficial also for the people. Where remark, as you know, we also introduced the possibility for people to buy shares and become shareholders. More than thousands of our staff currently have subscribed to that. That is another element of sharing the benefits of the results of the company. Maybe a comment in terms of the Aena situation.

Speaker #16: Also there , it's very beneficial , beneficial also for for the people . And where we mark as you know , we also introduced the possibility for people to buy shares and become shareholders .

Speaker #16: And more than 1,000 of our staff currently have subscribed to that. That is another element of sharing the benefits of the results of the company.

Speaker #16: And maybe a comment in terms of the situation , of course , our strategic plans imply the necessity of an alignment with with Ana , and we have a common view of bringing to the full potential of the Spanish , both operating companies and infrastructure .

Marco: Of course, our strategic plans imply the necessity of an alignment with Aena, and we have a common view of bringing to the full potential of the Spanish, both operating companies and infrastructure. Of course, that needs to be done at an affordable price. It's the same view that the group has with regard to the UK. We are in close contact with Aena to ensure that will happen.

Marco Sansavini: Of course, our strategic plans imply the necessity of an alignment with Aena, and we have a common view of bringing to the full potential of the Spanish, both operating companies and infrastructure. Of course, that needs to be done at an affordable price. It's the same view that the group has with regard to the UK. We are in close contact with Aena to ensure that will happen.

Speaker #16: Of course, that needs to be done at an affordable price. Is the same view that the group has with regard to the UK?

Speaker #16: So we are in close contact with Diana to ensure that that will happen.

Andrew Lobbenberg: Thanks. Can I just check, is everything done and dusted on CLAs at BA or are there, anything else?

Speaker #14: Thanks. Can I just check? Is everything done and dusted on Seamless at BA, or are there any outstanding items?

Andrew Lobbenberg: Thanks. Can I just check, is everything done and dusted on CLAs at BA or are there, anything else?

Luis Gallego: Yeah, Andrew, our collective agreements go to the end of 2026 and mid-2027. We concluded those over the last 18 months.

Speaker #5: Or your collective agreements? Go to the end of 26 and 27. So, we concluded those over the last 18 months.

Speaker #14: Great . Thanks .

Andrew Lobbenberg: Great. Thanks.

Speaker #1: Your next question comes from the line of Patrick Cassette of Goldman Sachs. Your line is now open.

Operator: Your next question comes from the line of Patrick Creuset of Goldman Sachs. Your line is now open.

Speaker #17: Hello , is Nicholas just coming back to your comments on Q4 trading , please , when you say booked passenger revenue for Q4 is up year on year , including on the Atlantic , just double checking that that is after the FX headwind that you flagged was this constant currency .

Patrick Creuset: Hi, Luis, Nicholas. Just coming back to your comments on Q4 trading, please. When you say booked passenger revenue for Q4 is up year-on-year, including on the Atlantic. Just double-checking that that is after the FX headwind that you flag or is this constant currency? Secondly, if we look at your ASK guide of 2.3% for the quarter, again, coming back to your comment on increasing passenger revenue overall, that would imply RASK at least somewhere around flat year-on-year consensus standing at -2% for the quarter. Is that-

Speaker #17: And then secondly , if we look at your ask guide of 2.3% for the quarter , again , coming back to to to your comment on , on increasing passenger revenue overall , that would imply Rask at least somewhere around flat year on year consensus standing at -2% for the quarter .

Speaker #17: So is that a fair interpretation ? And then on the basis of that , looking at consensus expectations somewhere around 5 billion , just shy of 5 billion of profit for the year , do you still feel comfortable with that ?

Gerald Khoo: A fair interpretation, and then on the basis of that, looking at consensus expectations of somewhere around EUR 5 billion, just shy of EUR 5 billion of profit for the year. Do you still feel comfortable with that? Thanks.

Patrick Creuset: A fair interpretation, and then on the basis of that, looking at consensus expectations of somewhere around EUR 5 billion, just shy of EUR 5 billion of profit for the year. Do you still feel comfortable with that? Thanks.

Speaker #17: Thanks .

Nicholas Cadbury: Just yeah, you're right. The guidance we've given on the positive booking includes the FX, so it's not in currency. It takes account of the currency impact as well. I'm afraid I can't give you PRASK guidance for the North Atlantic for Q4 overall, except, yeah, I think we said we're positive overall, and that's taking account the ASK growth as well. We've got, you know, positive momentum on that overall. The last question.

Speaker #3: Just yeah , you're right , you're right . The the the guidance we've given on the positive booking includes the FX . So it's not in constant currency .

Speaker #3: It takes account of the currency impact as well. I'm afraid I can't give you any. I'm not going to give you guidance for the North Atlantic for Q4.

Speaker #3: Overall, except for the growth we discussed, we're positive overall. And that takes into account the ASK growth as well. But we've got positive momentum on that overall.

Speaker #3: And so the last question I've been in consensus . Yeah , you're right . Consensus is just under 5 billion . And if we weren't happy with that we'd have to say something .

Gerald Khoo: EUR 5 billion.

Patrick Creuset: EUR 5 billion.

Nicholas Cadbury: Consensus. Yeah, you're right. Consensus is just under EUR 5 billion. If we weren't happy with that, we'd have to say something, and we're not saying anything.

Speaker #3: And we're not saying anything. So.

Speaker #17: Thank you .

Gerald Khoo: Thank you.

Patrick Creuset: Thank you.

Speaker #1: Your next question comes from the line of Muniba Kayani of Bank of America. Your line is now open.

Operator: Your next question comes from the line of Muneeba Kayani of Bank of America. Your line is now open.

Speaker #18: Yes . Good morning . Thanks for taking my questions . I just wanted to touch on this new Amex partnership extension . How should we be thinking about it in terms of impacting the loyalty top line margins ?

Muneeba Kayani: Yes, good morning. Thanks for taking my questions. I just wanted to touch on this new Amex partnership extension. How should we be thinking about it in terms of impacting the loyalty top line, margins? Just related to that, overall margins into next year, you're very much at the top end of your midterm guide. You talked about possibly unit cost inflation being better next year. You're seeing good demand trends. Like, how are you thinking about that margin into next year, please? Thank you.

Speaker #18: And then, just related to that, overall margins into next year, you're very much at the top end of your mid-term guide.

Speaker #18: You talked about possibly unit cost inflation being better next year. You're seeing good demand trends. How are you thinking about that margin into next year, please?

Speaker #18: Thank you .

Speaker #19: Yes .

Nicholas Cadbury: Yeah.

[Company Representative] (International Airlines Group): Yeah.

Speaker #3: Yeah . Just starting .

[Company Representative] (International Consolidated Airlines Group SA): Just starting on the Amex agreement. We're very pleased that we've recently agreed with a long-term agreement with American Express. That continues the good work that we've done previously in terms of that. That agreement includes the British Airways co-brand, the Membership Rewards business, and the acceptance of Amex across the different airlines, this time to include Level as well. You know, we're delighted that we have this multi-year agreement, and that will help the loyalty business as we go through the next few years to have that agreement in place. We look forward to working with Amex in the years to come.

[Company Representative] (International Airlines Group): Just starting on the Amex agreement. We're very pleased that we've recently agreed with a long-term agreement with American Express. That continues the good work that we've done previously in terms of that. That agreement includes the British Airways co-brand, the Membership Rewards business, and the acceptance of Amex across the different airlines, this time to include Level as well.

Speaker #5: On the Amex agreement . Yeah . So we're we're very pleased that we've reached an agreement with a with a long term agreement with American Express that continues the .

Speaker #3: The good work that .

Speaker #5: We've done previously in terms of that agreement, which includes the...

Speaker #3: British Airways .

Speaker #5: Co-brand the membership, rewards business, and the acceptance of Amex across the different.

Speaker #3: Airlines .

Speaker #5: This time to include level as well . So , you know , we're we're delighted that we have this multi-year agreement and that will help the loyalty business as we go through the next few years to have that that agreement in place .

[Company Representative] (International Airlines Group): You know, we're delighted that we have this multi-year agreement, and that will help the loyalty business as we go through the next few years to have that agreement in place. We look forward to working with Amex in the years to come.

Speaker #5: And we look forward to working with Amex in the years to come.

Speaker #3: Yeah , just on guidance . We're not giving guidance next year . But I mean , I think kind of with the dynamics that we're seeing , we still see strong demand for travel .

Nicholas Cadbury: Yeah, just on guidance, we're not giving guidance next year. I mean, I think kind of with the dynamics that we're seeing, we still see strong demand for travel. We still see a constraint in supply of aircraft into the market next year overall. We've got our transformation program, which is both driving our own revenues and also the kind of costs under control, which I said should moderate overall. If you put those dynamics together, you know, there's no reason why we shouldn't be at the top end of our guidance and sustain there. Overall, of course, it depends on where fuel is and inflation ends up overall, but I think we're feeling confident at the moment.

Speaker #3: We still see a constraint in in supply of aircraft into the market . Next year . Overall , we've got our transformation program , which is both driving our own revenues and also the kind of costs on the controls which I said should moderate overall .

Nicholas Cadbury: If you put those dynamics together, you know, there's no reason why we shouldn't be at the top end of our guidance and sustain there. Overall, of course, it depends on where fuel is and inflation ends up overall, but I think we're feeling confident at the moment.

Speaker #3: So if you put those dynamics together , you know , there's no reason why we shouldn't be at the top end of our of our guidance and sustain that overall .

Speaker #3: Of course, it depends on where fuel is and where inflation ends up overall. But I think we're feeling confident at the moment.

Speaker #20: Thank you .

Muneeba Kayani: Thank you.

Speaker #1: Your next question comes from the line of Gerald Ko of Paneer Liberum. Your line is now open.

Operator: Your next question comes from the line of Gerald Khoo of Panmure Liberum. Your line is now open.

Speaker #3: Morning , everyone . If I can , there's been a lot of talk about the ongoing strength in premium leisure . I just wondered whether you could give an indication as to the relative importance of premium leisure within the premium cabin .

Gerald Khoo: Morning, everyone. Two if I can. There's been a lot of talk about the sort of ongoing strength in premium leisure. I was just wondering whether you could give an indication as to the relative importance of premium leisure within the premium cabin. I know you probably won't give an exact figure, but just something to give a rough indication of how important that is proportionately. What, in terms of that trend of growth, what could derail it? You know, what could cause the premium leisure strength to reverse or soften? Secondly, I think there was some talk about strong short-haul capacity growth at British Airways. I just wanted to try to understand where that was and why that was done, please.

Speaker #3: I know you probably won't give an exact figure, but just something. Something to give a rough indication of how important that is proportionately.

Speaker #3: What do you know in terms of that trend of growth? What could derail it? What could cause premium leisure strength to reverse or soften?

Gerald Khoo: You know, what could cause the premium leisure strength to reverse or soften? Secondly, I think there was some talk about strong short-haul capacity growth at British Airways. I just wanted to try to understand where that was and why that wPanmure Liberum logo

Speaker #3: And certainly, I think there was some talk about strong short-haul capacity growth at British Airways. I just want to try to understand where that was.

Speaker #3: And why that was done . Please . Yeah , just just in kind of premium leisure . Yeah . We don't disclose the kind of precise mix that we've got on premium leisure premium seats .

Nicholas Cadbury: Just in kind of premium leisure, we don't disclose the kind of precise mix that we've got on premium leisure. Premium seats, if you look, it's different by different airlines. Of course, if you look at British Airways, we've got about 45% of our seats are premium overall. But a significant part of that is leisure. We've got about 20% of our overall customers are corporate customers, and probably more of that when you look at SME businesses overall. They're an important part of our growth. You can see that in terms of corporate customers overall, they're still down year-over-year, but actually that's been filled, you know, very successfully by the demand for leisure, particularly at the front end of the plane.

Speaker #3: If you look at it, it's different by different airlines. Of course, if you look at British Airways, we've got about 45% of our seats.

Speaker #3: We are a premium overall, but a significant part of that is leisure. We've got about 20% of our overall customers who are corporate customers.

Speaker #3: And more of that . When you look at SM businesses overall , but they're important , important part of our growth . And you can see that in terms of corporate customers overall , they're still down year on year .

Nicholas Cadbury: They're an important part of our growth. You can see that in terms of corporate customers overall, they're still down year-over-year, but actually that's been filled, you know, very successfully by the demand for leisure, particularly at the front end of the plane.

Speaker #3: But actually, that's been filled in very successfully by the demand for leisure, particularly at the front end of the plane. So it still continues to be strong.

Nicholas Cadbury: It still continues to be strong. You know, in terms of derailing, you know, one of the concerns we had as you get up to the, we're approaching the US, UK election, which feels like it could be targeted more at the, our customers at the wealthier end of the line. You could, you know, you would expect maybe some slowdown, but we're seeing the opposite of that at the moment as well. You know, the people who've got money have got money at the moment.

Speaker #3: You know , in terms of derailing , you know , one of the concerns we had is you get up to the we're approaching the US , UK , US election , which feels like it could be targeted more at the our customers at the wealthier end of the line .

Speaker #3: So you could, you know, you would expect maybe some slowdown. But we're seeing the opposite of that at the moment as well.

Speaker #3: So you know that people have money; they have money at the moment.

Speaker #5: So, yeah, in terms of EA short-haul capacity, there's probably two dimensions driving it. One is that we have been replacing A319s with A320s and A321s at Heathrow.

[Company Representative] (International Consolidated Airlines Group SA): Yeah. Now, in terms of EA short-haul capacity, there's probably two dimensions driving it. One is, we have been replacing A319s with A320s and A321s at Heathrow, so there's a chunk of gauge. We've also been reorienting the network to fly to probably more of the Southern European leisure markets, which gives us a stage length effect, which increases the ASK. We've been continuing to build back our Europe business at Gatwick. That's operating kind of 25, 26 aircraft, which is probably where it was back in 2017, 2018. They're the kind of three drivers of that capacity increase. We've had some gauge benefits as well at London City, where again, we're adding some ASKs, but again, primarily into longer sector leisure markets, which were robust over summer.

[Company Representative] (International Airlines Group): Yeah. Now, in terms of EA short-haul capacity, there's probably two dimensions driving it. One is, we have been replacing A319s with A320s and A321s at Heathrow, so there's a chunk of gauge. We've also been reorienting the network to fly to probably more of the Southern European leisure markets, which gives us a stage length effect, which increases the ASK. We've been continuing to build back our Europe business at Gatwick.

Speaker #5: So there's a chunk of gauge. We've also been reorienting the network to fly to probably more of the southern European leisure markets, which gives us a stage-like effect that increases asks, and we've been continuing to build back our Europe Gatwick.

Speaker #5: So that's operating kind of 25 , 26 aircraft , which is probably where it was back in 20 1718 . So they're kind of three drivers of of that capacity increase .

[Company Representative] (International Airlines Group): That's operating kind of 25, 26 aircraft, which is probably where it was back in 2017, 2018. They're the kind of three drivers of that capacity increase. We've had some gauge benefits as well at London City, where again, we're adding some ASKs, but again, primarily into longer sector leisure markets, which were robust over summer.

Speaker #5: And we've had some gauge benefits as well at London City, where again we're adding some asks. But again, primarily into longer sector major markets, which were robust over some time.

Speaker #3: Okay. Thanks very much.

James Goodall: Okay, thanks very much.

Gerald Khoo: Okay, thanks very much.

Speaker #1: Your next question comes from the line of James Goodall of Rothschild. Your line is now open.

Operator: Your next question comes from the line of James Goodall of Rothschild. Your line is now open.

Speaker #21: Yeah . Hi , everyone . Thank you for taking my questions . Just firstly following up on the question on Amex , has there been any changes in commercial terms with Amex as a result of the new agreement ?

James Goodall: Yeah. Hi, everyone. Thank you for taking my question. Just firstly, following up on the leader's question on Amex. Has there been any changes in commercial terms with Amex as a result of the new agreement? How should we think about the cash remuneration element going forward? Secondly, just given the strong on time performance in all entities in Q3, can you quantify what the benefit was to both revenue and costs from lower disruption in the quarter, please? Thank you.

Speaker #21: And how should we think about the cash remuneration element going forward ? And then secondly , just given the strong on time performance in all entities in Q3 , can you quantify what the benefit was to both revenue and costs from lower disruption in the quarter , please ?

Speaker #21: Thank you .

Speaker #3: Yeah , I mean , on the Amex card , it's a it's a commercial sensitive agreement . So we can't really give any details in terms of the specifics overall , both in terms of kind of kind of cash at the moment on everyone and things .

[Company Representative] (International Consolidated Airlines Group SA): Yeah. I mean, on the Amex card, it's a commercial sensitive agreement, so we can't really give any details in terms of the specifics overall, both in terms of kind of be it commercial cash flow for everywhere and things. No, just to say, I think that's right. Clearly, we're very happy with that agreement. It works for both us and American Express, and we're very pleased to have extended it for the long term.

[Company Representative] (International Airlines Group): Yeah. I mean, on the Amex card, it's a commercial sensitive agreement, so we can't really give any details in terms of the specifics overall, both in terms of kind of be it commercial cash flow for everywhere and things.

Speaker #5: No .

Nicholas Cadbury: No, just to say, I think that's right. Clearly, we're very happy with that agreement. It works for both us and American Express, and we're very pleased to have extended it for the long term.

Speaker #3: Just to say, I think.

Speaker #5: That's right . But clearly we're very happy with that agreement . It works for both us and American Express , and we're going to be to have extended it for , for , for the long term .

Speaker #5: Okay . And .

Luis Gallego: Okay. About the disruption cost in the case of the AJB, the costs were almost half, 45% less than the cost that we had last year.

Speaker #2: About the disruption cost in the case of the IDC, the costs were almost half—45% less than the cost that we had last year.

Speaker #21: Thank you .

James Goodall: All right, thank you.

Speaker #1: Your next question comes from the line of Jared Kessel of UBS. Your line is now open.

Operator: Your next question comes from the line of Jarrod Castle of UBS. Your line is now open.

James Goodall: Good morning, everyone. 2 as well. Seems like the MRO business is doing pretty well. If you could just give a little bit more color in terms of pipeline of work and what you're seeing there. Just secondly, I mean, a lot of attention to loyalty and, you know, obviously the change has happened, I think it was April 2024. Loyalty members, you know, they're going to get their tier status, I would imagine, sometime in March 2025. Just interested, you know, within the different tiers, gold, silver, bronze at BA, you know, has the mix changed, i.e., are some of the gold members, you know, as a percent of total mix slipping down or some of the silver going up?

Speaker #22: Good morning, everyone. Two as well. It seems like the MRO business is doing pretty well. So, if you could just give a little bit more color in terms of the pipeline of work and what you're seeing there.

Jarrod Castle: Good morning, everyone. 2 as well. Seems like the MRO business is doing pretty well. If you could just give a little bit more color in terms of pipeline of work and what you're seeing there. Just secondly, I mean, a lot of attention to loyalty and, you know, obviously the change has happened, I think it was April 2024. Loyalty members, you know, they're going to get their tier status, I would imagine, sometime in March 2025.

Speaker #22: And then just secondly , I mean , a lot of attention to loyalty . And , you know , obviously the changes happened , I think was April this year , loyalty members , you know , they're going to get their tier status .

Speaker #22: I would imagine sometime in March next year . Just interested , you know , within the different tiers , gold , silver , bronze at at at BA , you know , has the mix changed .

Jarrod Castle: Just interested, you know, within the different tiers, gold, silver, bronze at BA, you know, has the mix changed, i.e., are some of the gold members, you know, as a percent of total mix slipping down or some of the silver going up?

Speaker #22: I.e., are some of the gold members, you know, as a percent of total mix slipping down, or are some of the silver going up?

Speaker #22: And what are signings like into the loyalty program at the moment? So, any color on how you see that evolving going into March?

James Goodall: What are signings like into the loyalty program at the moment? Any color and how you see that evolving going into March. Thanks.

Jarrod Castle: What are signings like into the loyalty program at the moment? Any color and how you see that evolving going into March. Thanks.

Speaker #22: Thanks .

Speaker #2: Maybe. Michael, do you want to comment on the MRO, mainly its engine business?

Luis Gallego: Maybe, Marco, you want to comment on the MRO. Maybe it's engine business as well.

Speaker #16: Yeah . The the engine business is is still cycling over the post phase . So it is indeed as you say , is recuperating .

Marco: Yeah. The engine business is still cycling over the post-COVID phase. It's indeed, as you say, is recuperating. You see that a lot of the non-airline revenue growth has been driven by the growth of maintenance. It's coming back to pre-COVID levels of profitability. We're currently in the phase of setting the stages of the next longer term view of the strategic opportunities there. I think we will come back in time on that.

Marco Sansavini: Yeah. The engine business is still cycling over the post-COVID phase. It's indeed, as you say, is recuperating. You see that a lot of the non-airline revenue growth has been driven by the growth of maintenance. It's coming back to pre-COVID levels of profitability. We're currently in the phase of setting the stages of the next longer term view of the strategic opportunities there. I think we will come back in time on that.

Speaker #16: You see that a lot of the non-airline revenue growth has been driven by the growth of , of maintenance . So it's coming back to , pre-COVID levels of , of profitability .

Speaker #16: And we're currently in the phase of setting the stages for the next long-term view of the strategic opportunities there. So I think we will come back in time on that.

Speaker #5: In relation to the club and the relaunch . I think it's performing as we would expect . I think the tier sizes are broadly tracking the way they were last year , but we are hearing anecdotes of people who are higher value customers getting their tier quicker .

[Company Representative] (International Consolidated Airlines Group SA): In relation to the club and the relaunch, I think it's performing as we would expect. I think the tier sizes are broadly tracking the way they were last year. We are hearing anecdotes of people who are higher value customers getting their tier quicker. We don't expect to see, you know, so much movement in terms of tier sizes. We do think that the club tiers will be rewarding, you know, our higher revenue customers more quickly and more fairly. Yeah. I think I'd add to that just in terms of the club, you asked where the numbers are. We are still seeing some good growth in terms of people joining the club, both in terms of The British Airways Club and the Iberia Club.

[Company Representative] (International Airlines Group): In relation to the club and the relaunch, I think it's performing as we would expect. I think the tier sizes are broadly tracking the way they were last year. We are hearing anecdotes of people who are higher value customers getting their tier quicker. We don't expect to see, you know, so much movement in terms of tier sizes.

Speaker #5: So we don't expect to see too much movement in terms of tier sizes. But we do think that the club tiers will be rewarding.

[Company Representative] (International Airlines Group): We do think that the club tiers will be rewarding, you know, our higher revenue customers more quickly and more fairly.

Speaker #5: You know, our higher-revenue customers are being served more quickly and more fairly. Yeah. And I think I'd add to that just in terms of the club. You asked about where the numbers are; we are still seeing some good.

Nicholas Cadbury: Yeah. I think I'd add to that just in terms of the club, you asked where the numbers are. We are still seeing some good growth in terms of people joining the club, both in terms of The British Airways Club and the Iberia Club.

Speaker #3: Growth in terms of people.

Speaker #5: Joining the club, both in terms of the BA Club and the Iberian Club.

[Company Representative] (International Consolidated Airlines Group SA): Active members, so that's somebody who's done something in the last 12 months is up double digits. We're seeing a lot of activity. We're also starting to see, which we talked about last quarter, people increasingly using their holiday as a method of obtaining tier points. That's another trend that we're seeing.

Speaker #3: Active members .

Nicholas Cadbury: Active members, so that's somebody who's done something in the last 12 months is up double digits. We're seeing a lot of activity. We're also starting to see, which we talked about last quarter, people increasingly using their holiday as a method of obtaining tier points. That's another trend that we're seeing.

Speaker #5: So, that's somebody that's done something in the last 12 months. Is up double digits. So, we're seeing a lot of activity, and we're also starting to see, which we talked about last quarter.

Speaker #5: People are increasingly using their holiday as a.

Speaker #3: A method of obtaining tier points. So that's another trend that we're seeing.

Speaker #22: Thanks. Thanks. Thank you.

James Goodall: Great. Thanks. Thank you.

Jarrod Castle: Great. Thanks. Thank you.

Speaker #1: Your next question comes from the line of Alex Paterson of Peel Hunt. Your line is now open.

Operator: Your next question comes from the line of Alexander Paterson of Peel Hunt. Your line is now open.

Speaker #23: Yeah . Morning , everybody . Yeah . So just continuing that theme of of holiday sales to BA club members , has that really benefited the third quarter ?

James Goodall: Yeah. Morning, everybody. Just continuing that theme of holiday sales to BA club members. Has that really benefited the Q3? If I look ahead, the number of ATOLs that you have paid for is flat year-over-year. If I think about where is the growth in IAG Loyalty gonna come from, if it's not from the number of holidays, are you going more upscale or is it the growth is gonna come from more Avios issuance?

Alexander Paterson: Yeah. Morning, everybody. Just continuing that theme of holiday sales to BA club members. Has that really benefited the Q3? If I look ahead, the number of ATOLs that you have paid for is flat year-over-year. If I think about where is the growth in IAG Loyalty gonna come from, if it's not from the number of holidays, are you going more upscale or is it the growth is gonna come from more Avios issuance?

Speaker #23: And if I look ahead your the number of atolls that you have paid for is flat year on year . So if I think about then where is the growth in IAG loyalty going to come from ?

Speaker #23: If it's not from the number of holidays , is it . Are you going more upscale or is it the growth is going to come from more Avios issuance ?

Speaker #3: Yeah , thanks for that . Yeah . In terms of club members , yes , we are seeing more revenue coming from club members .

[Company Representative] (International Consolidated Airlines Group SA): Yeah. Hi, Alex. Thanks for that. Yeah. In terms of club members, yes, we are seeing more revenue coming from club members. That's up on where we were in terms of you look at it year to date. We are expecting that to continue. You're right in thinking that the quality of revenue that come from those members tends to be strong. That's definitely where we're seeing some of the growth. In terms of ATOLs, I've always said that ATOLs are a bit of an art rather than a science. We certainly plan to grow the business into 2026. In Q3, we definitely saw that growth in a lot of areas.

[Company Representative] (International Airlines Group): Yeah. Hi, Alex. Thanks for that. Yeah. In terms of club members, yes, we are seeing more revenue coming from club members. That's up on where we were in terms of you look at it year to date. We are expecting that to continue. You're right in thinking that the quality of revenue that come from those members tends to be strong. That's definitely where we're seeing some of the growth. In terms of ATOLs, I've always said that ATOLs are a bit of an art rather than a science. We certainly plan to grow the business into 2026. In Q3, we definitely saw that growth in a lot of areas.

Speaker #3: That's up on where we were in terms of if you look at it year to date and we are expecting that to continue .

Speaker #3: So and you're right in thinking that the quality of revenue that come from those members tends to be strong . And so that's definitely where we're seeing some of the growth in terms of atolls .

Speaker #3: I've always said that atolls are a bit of an art rather than a science . And so , you know , we we we certainly plan to grow the business into 26 and in Q3 , we definitely saw that growth in in a lot of areas .

Speaker #3: I would I would highlight Greece as probably the , the region that have its strongest summer , certainly for us . So yeah , that growth continues .

[Company Representative] (International Consolidated Airlines Group SA): I would highlight Greece as probably the region that's had its strongest summer, certainly for us. Yeah, that growth continues.

[Company Representative] (International Airlines Group): I would highlight Greece as probably the region that's had its strongest summer, certainly for us. Yeah, that growth continues.

Speaker #23: Thank you .

James Goodall: Thank you.

Alexander Paterson: Thank you.

Speaker #1: There are no further questions . I will now hand back to Luis Gallego for final remarks .

Operator: There are no further questions. I will now hand back to Luis Gallego for final remarks.

Speaker #2: Okay . So thank you very much . Thank you very much , everybody , for being here today . As we said at the beginning , strong set of results are positive trend in bookings for the first quarter .

Luis Gallego: Okay. Thank you very much. Thank you very much, everybody, for being here today. As we said at the beginning, a strong set of results, positive trending bookings for Q1 and on Q1. We are going to continue executing our strategy that is delivering better results than average. Thank you very much.

Speaker #2: First quarter . So we continue we are going to continue executing our strategy . That is delivering better results than than average . Thank you very much .

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