International Consolidated Airlines S A : IAG Annual Report And Accounts 2024

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The strength of our connections Annual Report and Accounts 2024 Contents Strategic Report 1 Our purpose 2 Performance highlights 3 Chairman's letter 4 Our connections 10 Management Committee 12 At a glance 14 Business model 16 Strategy 17 Chief Executive Officer's review 21 Stakeholder engagement 32 Financial overview 34 Financial review 44 Regulatory environment 48 British Airways 50 Iberia 52 Vueling 54 Aer Lingus 56 LEVEL 58 IAG Loyalty 60 IAG Cargo 62 Sustainability 72 Risk management and principal risk factors Corporate Governance 92 Chairman's introduction to Corporate Governance 94 Our Board of Directors 97 Corporate Governance 112 Report of the Nominations Committee 116 Report of the Safety, Environment and Corporate Responsibility Committee 120 Report of the Audit and Compliance Committee 129 Report of the Remuneration Committee Financial Statements 154 Consolidated income statement 155 Consolidated statement of other comprehensive income 156 Consolidated balance sheet 157 Consolidated cash flow statement 158 Consolidated statement of changes in equity 160 Notes to the consolidated financial statements 230 Alternative performance measures 237 Group investments Statement of Directors' Responsibilities Independent Auditor's Report Additional Information 251 Glossary 253 Aircraft fleet 254 Operating and financial statistics Independent assurance Report on the Consolidated Non-Financial Information Statement and Sustainability Information Consolidated Non-Financial Information Statement and Sustainability Information 263 General requirements 275 Environment (Planet) 292 Social (People and prosperity) 309 Governance 314 Appendix 323 EU Taxonomy Shareholder Information 333 Shareholder information View our online annual report at: www.iairgroup.com/investors- and-shareholders/financial- reporting/annual-reports/ Management Report IAG is required to prepare a Management Report in accordance with Article 262 of the Spanish Companies Act and Article 49 of the Spanish Commercial Code. Pursuant to this legislation, this Management Report must contain a fair review of the progress of the business and the performance of the Group, together with a description of the principal risks and uncertainties that it faces. In the preparation of this report, IAG has taken into consideration the guide published in 2013 by the Spanish National Securities Market Commission (CNMV) which establishes a number of recommendations for the preparation of management reports of listed companies. The Management Report is composed of the following sections: 12 At a glance 14 Business model 16 Strategy 21 Stakeholder engagement 32 Financial overview 34 Financial review 44 Regulatory environment The Annual Corporate Governance Report is part of this Management Report but has been presented separately. This report has been filed with the CNMV, together with the required statistical annex, in accordance with the CNMV Circular 2/2018, dated 12 June. The Annual Corporate Governance Report and the statistical annex are also available on the Company's website www.iairgroup.com . 48 British Airways 50 Iberia 52 Vueling 54 Aer Lingus 56 LEVEL 58 IAG Loyalty 60 IAG Cargo 62 Sustainability 72 Risk management and principal risk factors 255 Independent assurance Report on the Consolidated Non-Financial Information Statement and Sustainability Information 263 Consolidated Non-Financial Information Statement and Sustainability Information The consolidated Non-Financial Information Statement and Sustainability Information (together referred to as the 'Sustainability statement' in this Management Report) complies with Spanish Law 11/2018, of December 28, amending the Commercial Code, the consolidated text of the Capital Companies Law approved by Royal Legislative Decree 1/2010, of July 2, Law 22/2015, of July 20, on Auditing, in matters of non-financial and diversity information, and Law 5/2021, of April 12, amending Article 49.6.II, fourth paragraph, of the Commercial Code. This statement is prepared in accordance with the EU Corporate Sustainability Reporting Directive (CSRD) on a voluntary basis. Connecting people, businesses and countries Our purpose At IAG, our purpose is to connect people, businesses and countries using aviation as a force for good. We believe in the transformative power of flight: enabling personal and professional connections, supporting global trade and fostering the discovery of new places, ideas and experiences. Our airlines provide critical infrastructure, delivering goods from food on shelves to medicine in pharmacies. 1 Performance highlights Delivering sustainable returns 2024 has been a very strong year for IAG. We continue to see strong demand for travel in our core markets. Our transformation programme is delivering better customer experiences as well as improving financial performance. We are committed to sustainable shareholder returns. Financial highlights Non-financial highlights 1 For more information, see Alternative performance measures section. Revenue €32,100 million +9.0% vly Operating profit before exceptional items 1 €4,443 million +€936 million vly Free cash flow 1 €3,556 million +€2,236 million vly Operating profit €4,283 million +€776 million vly Share buyback €350 million Total dividend €0.09 per share Interim dividend €147 million, final dividend €288 million Carbon intensity 78.1 gCO 2 /pkm -3.0% vly Net Promoter Score (NPS) 22.6 pts +4.0 pts vly Senior leadership roles held by women 36% +0 pt vly Chairman's letter Committed to our purpose Javier Ferrán , Chairman, reviews 2024, a year in which we continued to deliver our strategy and transformation - ensuring we are even better placed to deliver on our purpose. In 2024, we remained focused on our purpose of connecting people, businesses and countries as we continue to deliver our strategy. We are proud that aviation remains a catalyst for economic and social good, helping people do business, trade, study and see friends and family around the world, and discover new ideas, places and experiences. In terms of financial performance, this has been a very good year for IAG, marked by strong operating profits and margins across the Group. These results have enabled us to deliver sustainable returns to shareholders, enhance our balance sheet and reinvest in the business. In an important milestone, we were pleased to announce the resumption of a dividend and a share buyback for the first time since COVID-19. On behalf of the Board, I would like to thank IAG's 74,400 employees, whose contributions have been key to making this year a success. The strength of our business is a direct result of their dedication and hard work, and without them we would not have been able to deliver such a strong set of results. I would also like to extend my thanks to our shareholders for their continued support. Aviation as a force for good Airlines play an important role in connecting and uniting communities. Our airlines, and the hubs in which they operate, are part of critical infrastructure, facilitating trade, connecting businesses and supporting broader economic growth. Aviation is a key driver of economic activity through direct investment, employment and our supply chain. Our people driving change Our people play a critical role in driving our strategy. They continue to support our Group-wide transformation programme. This year, the Board dedicated more time to visiting our frontline colleagues to gain valuable insights from those directly involved in the day-to-day operation. Our strategy is working We continue to be guided by our strategic imperatives: strengthening our core, driving growth through our complementary businesses and airline partnerships, operating under a robust financial and sustainability framework and - this year - accelerating and scaling up our delivery. As a result, we grew revenue by 9.0% to €32 billion, increased our operating profit before exceptional items by 26.7% to €4,443 million and our margin by 1.9 percentage points to 13.8%. We generated free cash flow of €3.6 billion and, with a strong balance sheet, delivered on our commitment to shareholder returns. In 2024, we maintained our leading position in the world's most valuable aviation markets, serving 122 million customers globally. We saw strong demand for travel with our Group capacity surpassing pre-pandemic levels of flying, underscoring that people continue to prioritise experiences and face-to-face connections. Demand for travel remained robust throughout the year, particularly in our core profit pools of the North Atlantic, Latin America and intra-Europe, and through the efforts of our transformation programme, we continued to build an even stronger and more efficient set of customer propositions. We took delivery of 19 new aircraft as part of our ongoing investment in our fleet, and Iberia was the global launch customer of the Airbus A321XLR. In addition to strengthening our airlines' leadership positions, IAG Loyalty is an increasingly attractive part of our portfolio, with BA Holidays joining its business this year. Our operational, commercial and financial performance demonstrates that our strategy is working. Progress in sustainability Sustainability is part of IAG's core strategy. We have shown leadership in the sector, as the first airline group globally to commit to net zero by 2050, and we have a clear plan to achieve our targets. As well as our investments in more fuel-efficient aircraft, we are investing in lower-carbon fuels and technologies, prioritising sustainable aviation fuel (SAF). But we are facing regulation, including SAF mandates that will increase costs to airlines and their customers. We need all stakeholders in the aviation ecosystem to work together to enable the low-carbon transition while retaining competitiveness across European aviation. Overcoming challenges and looking ahead While our results are strong, our industry overall is facing headwinds. There have been ongoing issues with air traffic control (ATC) throughout Europe and fleet and supply chain delays, which have resulted in some operational challenges for our airlines. We are affected by geopolitical changes and conflicts and often need to manage their consequences, including a fluctuating fuel price and airspace restrictions and congestion. The political landscape and policy environment are constantly evolving, but, as a group, IAG is resilient to market challenges, thanks to our scale, core markets and the diversity of our brands. As we look ahead to the coming year, we will continue to deliver our strategy, targeting sustainable growth and returns, while positively contributing to the economies and communities we serve. Javier Ferrán Chairman Connecting people with new experiences IAG airlines serve 122 million customers in 91 countries around the world, and we're proud to connect people with experiences. From family celebrations to life-changing moves, we make journeys that matter possible, broadening horizons every day. British Airways launches Customer Access Advisory Panel As part of British Airways' continued commitment to providing a seamless travel experience for customers with visible and non-visible disabilities, the airline launched its new Customer Access Advisory Panel. The panel is committed to identifying ways to improve the end-to-end customer experience for travellers who may require additional assistance. Viva Las Vegas A new Aer Lingus route to Las Vegas took off in October, connecting Irish passengers with new experiences such as the Sphere Las Vegas, the world's first next-generation entertainment venue, on which the airline advertised its inaugural flight. Speedbird Pilot Academy expands As part of British Airways' commitment to inspiring future talent and ensuring equal opportunities, the airline is expanding its Speedbird Pilot Academy. It will now fully fund training for up to 200 aspiring pilots annually, up from 60 places in 2023. This initiative breaks down financial barriers, making a career in aviation more accessible to all. Connecting businesses with opportunities New partnerships IAG Loyalty has renewed its partnership with Nectar, extending the agreement until 2028. This collaboration, which includes key brands such as Sainsbury's and Argos, enables members to access the benefits of both loyalty programmes. Customers will continue to be able to transfer Nectar points to Avios via their British Airways Executive Club account. Supporting growers and exporters IAG Cargo expanded its perishable centre in Madrid by 45%, boosting capacity and supporting growers and exporters between Latin America and Europe, ensuring fresh produce reaches market efficiently. We are inspired by the good we can do in the world - connecting businesses with opportunities, supporting economies and creating jobs. By facilitating trade and transporting essential goods, we help businesses grow, thrive and build stronger connections. 50 years of Spain's air shuttle In 2024, Iberia's most iconic route, the Madrid to Barcelona 'Air Shuttle', celebrated its 50th anniversary. The airline marked the milestone with the opening of a new dedicated check-in area at Madrid-Barajas Airport and introduced two new fare options tailored to the evolving needs of business travellers. The route between Spain's two biggest cities was the first Air Shuttle in Europe and remains Iberia's flagship route. Partnership with Barcelona Supercomputing Center Vueling has joined forces with the Barcelona Supercomputing Center (BSC) in a three-year partnership that will give the airline access to BSC's cutting-edge systems, data and scientific expertise. This partnership will include access to specialist training ranging from advanced weather forecasting - including dust storm data - to predictive analytics for passenger and baggage management. Connecting countries and communities Organ transportation Since 2013, Vueling has partnered with Spain's National Transplant Organisation, playing a pivotal role in the transportation of over 900 organs. As one of Spain's leading organ transporters, the airline has facilitated critical connections across regions and countries, ensuring that life-saving organs reach those in need on time. UNICEF Copenhagen Aer Lingus has partnered with UNICEF for 25 years, raising funds through its Change for Good programme. CEO Lynne Embleton visited the UNICEF Supply Division in Copenhagen to learn how UNICEF procures and distributes aid to 162 countries facing humanitarian crises. Aviation bridges countries and communities, so it is vital we use our global network to support the communities we serve. IAG is dedicated to supporting charities and relief efforts around the world and closer to home. Thank you to our people, customers and partners for their commitment to our social and environmental initiatives.

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