• 10. ENG - Consolidated accounts formulation page - For CNMV filing.pdf
  • Director's Responsibility Statement

Independent Auditor’s Report

Independent Auditor’s Report continued

Independent Auditor’s Report continued

Independent Auditor’s Report continued

INTERNATIONAL
AIRLINES
GROUP
International Consolidated
Airlines Group, S.A. and
Subsidiaries
Consolidated Financial Statements
for the year ended 31 December 2023

Year to 31 December
€ million
Note
2023
2022
Passenger revenue
25,810
1,156
1,615
Other revenue
5
2,487
1,993
Total revenue
5
29,453
23,066
Employee costs
8
5,423
4,647
7,557
6,120
3,849
2,971
2,308
1,890
2,509
2,101
Property, IT and other costs
6
1,058
950
1,155
920
Depreciation, amortisation and impairment
6
2,063
2,070
(2)
(22)
26
141
25,946
21,788
3,507
1,278
Finance costs
9
(1,113)
(1,017)
Finance income
9
386
52
Net change in fair value of financial instruments
9
(11)
81
Net financing credit relating to pensions
9
103
26
176
(115)
8
110
(451)
(863)
3,056
415
Tax
10
(401)
16
2,655
431
2,655
431
–
–
2,655
431
Basic earnings per share (€ cents)
11
53.8
8.7
Diluted earnings per share (€ cents)
11
50.6
6.1
1
The 2022 results include a reclassification to conform with the current year presentation for the Net gain on sale of property, plant and equipment.
1
1
1
Consolidated income statement
1

Year to 31 December
€ million
Note
2023
2022
30d
(195)
Reclassified and reported in net profit
30d
(142)
(1,233)
(120)
(115)
82
38
Currency translation differences
33
18
(53)
Fair value movements on other equity investments
19
127
2
(119)
(6)
(1,076)
662
(18)
52
(1,443)
819
2,655
431
Total comprehensive income for the year
1,212
1,212
1,250
Non-controlling interest
33
–
–
1,212
1,250
1
1
1
1 The 2022 results include a reclassification of losses and gains associated with the fair value movements on cash flow hedges and fair value
movements on cost of hedging, respectively. There is no impact on Total other comprehensive (loss)/income for the year, net of tax. Further
information is given in note 2.
Items in the consolidated Statement of other comprehensive income above are disclosed net of tax.
Consolidated statement of other comprehensive income
2

€ million
Note
Property, plant and equipment
13
19,776
Intangible assets
17
3,909
3,556
Investments accounted for using the equity method
18
47
43
Other equity investments
19
188
55
Employee benefit assets
34
1,380
2,334
Derivative financial instruments
30
42
81
Deferred tax assets
10
1,202
1,282
Other non-current assets
20
432
362
26,976
26,059
Non-current assets held for sale
16
–
19
Inventories
21
494
353
Trade receivables
20
1,559
1,330
Other current assets
20
1,574
1,226
Current tax receivable
10
159
72
Derivative financial instruments
30
81
645
Current interest-bearing deposits
22
1,396
403
Cash and cash equivalents
22
5,441
9,196
10,704
13,244
37,680
39,303
Issued share capital
31
497
497
Share premium
31
7,770
7,770
(100)
(28)
(4,895)
(6,223)
3,272
2,016
Non-controlling interest
33
6
6
3,278
2,022
Borrowings
26
13,831
17,141
Employee benefit obligations
34
175
217
Deferred tax liability
10
4
–
Provisions
27
2,831
2,652
Deferred revenue
24
257
326
Derivative financial instruments
30
106
84
Other long-term liabilities
25
219
200
17,423
20,620
Borrowings
26
2,251
2,843
Trade and other payables
23
5,590
5,209
Deferred revenue
24
7,766
7,318
Derivative financial instruments
30
461
387
Current tax payable
10
2
8
Provisions
27
909
896
16,979
16,661
34,402
37,281
37,680
39,303
Consolidated balance sheet
3

€ million
Note
2023
2022
Depreciation, amortisation and impairment
6
2,063
2,070
(2)
(22)
(48)
(22)
Pension scheme service costs
34
18
17
Increase in provisions
35
237
463
51
19
Other movements
35
111
76
(1,005)
(817)
365
42
(291)
(134)
5,006
2,970
(272)
(660)
Increase in inventories
(140)
(21)
Increase in other receivables and current assets
(388)
(233)
Increase in trade payables
258
886
Increase in deferred revenue
212
1,236
Increase in other payables and current liabilities
188
676
(142)
1,884
4,864
4,854
Acquisition of property, plant and equipment and intangible assets
35
(3,544)
(3,875)
1,080
837
11
–
(985)
(351)
–
(100)
15
26
(3,423)
(3,463)
Proceeds from borrowings
35
1,001
1,436
Repayment of borrowings
35
(4,268)
(1,050)
Repayment of lease liabilities
35
(1,731)
(1,455)
Settlement of derivative financial instruments
35
(119)
1,036
(77)
(23)
(5,194)
(56)
(3,753)
1,335
(2)
(31)
9,196
7,892
Cash and cash equivalents at year end
22
5,441
9,196
2023
2022
Cash and cash equivalents at year end
22
5,441
9,196
Interest-bearing deposits maturing after more than three months
22
1,396
403
Cash, cash equivalents and other interest-bearing deposits
22
6,837
9,599
1
1 The 2022 results include reclassifications to conform with the current year presentation. Further information is given in note 2 and note 37.
For details on restricted cash balances see note 22 Cash, cash equivalents and other current interest-bearing deposits.
Consolidated cash flow statement
4

1 January 2023
497
7,770
(28)
(1,717)
(4,506)
2,016
6
2,022
Profit for the year
–
–
–
–
2,655
2,655
–
2,655
Fuel and oil costs
–
–
–
(81)
–
(81)
–
(81)
Currency differences
–
–
–
(20)
–
(20)
–
(20)
Finance costs
–
–
–
(35)
–
(35)
–
(35)
Ineffectiveness recognised in other non-
operating costs
–
–
–
(6)
–
(6)
–
(6)
Net change in fair value of cash flow hedges
–
–
–
(195)
–
(195)
–
(195)
investments
–
–
–
127
–
127
–
127
Net change in fair value of cost of hedging
–
–
–
(120)
–
(120)
–
(120)
Cost of hedging reclassified and reported in
net profit
–
–
–
82
–
82
–
82
attributable to credit risk changes
–
–
–
(119)
–
(119)
–
(119)
Currency translation differences
–
–
–
18
–
18
–
18
benefit obligations
–
–
–
–
(1,076)
(1,076)
–
(1,076)
Remeasurements of long-term employee-
related provisions
–
–
–
–
(18)
(18)
–
(18)
Total comprehensive income for the year
–
–
–
(349)
1,561
1,212
–
1,212
Hedges transferred and reported in
property, plant and equipment
–
–
–
(6)
–
(6)
–
(6)
Hedges transferred and reported in sales in
advance of carriage
–
–
–
85
–
85
–
85
Hedges transferred and reported in
inventory
–
–
–
(9)
–
(9)
–
(9)
Cost of share-based payments
–
–
–
–
52
52
–
52
Vesting of share-based payment schemes
–
–
5
–
(6)
(1)
–
(1)
Acquisition of treasury shares
–
–
(77)
–
–
(77)
–
(77)
31 December 2023
497
7,770
(100)
(1,996)
(2,899)
3,272
6
3,278
Consolidated statement of changes in equity
For the year to 31 December 2023
5

1 January 2022
497
7,770
(24)
(1,673)
(5,730)
840
6
846
Profit for the year
–
–
–
–
431
431
–
431
Cash flow hedges reclassified and
reported in net profit:
Fuel and oil costs
–
–
–
(1,115)
–
(1,115)
–
(1,115)
Currency differences
–
–
–
(90)
–
(90)
–
(90)
Finance costs
–
–
–
10
–
10
–
10
Discontinuance of hedge accounting
–
–
–
(22)
–
(22)
–
(22)
Ineffectiveness recognised in other
non-operating costs
–
–
–
(16)
–
(16)
–
(16)
hedges
–
–
–
1,472
–
1,472
–
1,472
investments
–
–
–
2
–
2
–
2
Net change in fair value of cost of
hedging
–
–
–
(115)
–
(115)
–
(115)
in net profit
–
–
–
38
–
38
–
38
attributable to credit risk changes
–
–
–
(6)
–
(6)
–
(6)
Currency translation differences
–
–
–
(53)
–
(53)
–
(53)
benefit obligations
–
–
–
–
662
662
–
662
Remeasurements of long-term employee-
related provisions
–
–
–
–
52
52
–
52
Total comprehensive income for the year
–
–
–
105
1,145
1,250
–
1,250
Hedges transferred and reported in
property, plant and equipment
–
–
–
(65)
–
(65)
–
(65)
in advance of carriage
–
–
–
36
–
36
–
36
Hedges transferred and reported in
inventory
–
–
–
(58)
–
(58)
–
(58)
Cost of share-based payments
–
–
–
–
39
39
–
39
schemes
–
–
19
–
(22)
(3)
–
(3)
Acquisition of treasury shares
–
–
(23)
–
–
(23)
–
(23)
Redemption of convertible bond
–
–
–
(62)
62
–
–
–
31 December 2022
497
7,770
(28)
(1,717)
(4,506)
2,016
6
2,022
Consolidated statement of changes in equity
For the year to 31 December 2022
6

1 Background and general information
International Consolidated Airlines Group, S.A. (hereinafter ‘International Airlines Group’, ‘IAG’ or the ‘Group’) is a leading European
airline group, formed to hold the interests of airline and ancillary operations. IAG (hereinafter the ‘Company’) is a Spanish company
registered in Madrid and was incorporated on 17 December 2009. The registered address of IAG is El Caserío, Zona industrial 2,
Camino de La Muñoza s/n, 28042, Madrid, Spain. On 21 January 2011, British Airways Plc and Iberia Líneas Aéreas de España S.A.
Operadora (hereinafter ‘British Airways’ and ‘Iberia’ respectively) completed a merger transaction becoming the first two airlines of
the Group. Vueling Airlines S.A. (‘Vueling’) was acquired on 26 April 2013, and Aer Lingus Group Plc (‘Aer Lingus’) on 18 August
2015. A list of the subsidiaries of the Group is included in the Group investments section.
IAG shares are traded on the London Stock Exchange’s main market for listed securities and also on the stock exchanges of Madrid,
Barcelona, Bilbao and Valencia (the ‘Spanish Stock Exchanges’), through the Spanish Stock Exchanges Interconnection System
(Mercado Continuo Español).
2 Significant accounting policies
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with the International Financial Reporting
Standards as endorsed by the European Union (IFRSs as endorsed by the EU). The consolidated financial statements are rounded to
the nearest million unless otherwise stated. These financial statements have been prepared on a historical cost convention except for
certain financial assets and liabilities, including employee benefit assets and liabilities, the €825 million convertible bond due 2028,
derivative financial instruments and other equity investments that are measured at fair value. The notes to the financial statements
for the prior year include reclassifications that were made to conform to the current year presentation.
The Group’s financial statements for the year to 31 December 2023 were authorised for issue, and approved by the Board of
Directors on 28 February 2024.
Change in presentation of results
Income statement – Net gain on sale of property, plant and equipment
The prior year Income statement includes a reclassification to conform with the current year presentation for the Net gain on sale of
property, plant and equipment within Operating profit. Accordingly, for the year to 31 December 2022, the Group has reclassified
€22 million of gains from Other non-operating credits to Net gain on sale of property, plant and equipment within Expenditure on
operations. There is no impact on the Profit after tax. The segmental operating profit/(loss) has been updated to reflect the
reclassification.
Statement of other comprehensive income
The prior year Statement of other comprehensive income includes a reclassification of €173 million of gains associated with the fair
value movements on cash flow hedges and €9 million of losses associated with the fair value movements on cost of hedging, which
had been previously presented under the sub-heading Items that will not be reclassified to net profit, to the sub-heading Items that
may be reclassified subsequently to net profit, as these may recycle to net profit in future periods. There is no impact on Total other
comprehensive (loss)/income for the year, net of tax.
Cash flow statement
The prior year Cash flow statement has been represented and further detailed in note 37. Accordingly, the Group has reclassified the
results for the year to 31 December 2022.
Going concern
At 31 December 2023, the Group had total liquidity of €11,624 million (31 December 2022: total liquidity of €13,999 million),
comprising cash, cash equivalents and interest-bearing deposits of €6,837 million, €4,412 million of committed and undrawn general
facilities and a further €375 million of committed and undrawn aircraft specific facilities. At 31 December 2023, the Group has no
financial covenants associated with its loans and borrowings.
The decrease in liquidity during the year to 31 December 2023 was attributable to, amongst other actions: (i) the repayment of
borrowings of €4,268 million, which consisted of, amongst others, the €2,330 million (£2.0 billion) early repayment of the UK Export
Finance (UKEF) Credit Facility, the €867 million of early repayment of the syndicated financing agreement, partially guaranteed by
Instituto de Crédito Oficial (ICO) in Spain and the €500 million redemption of the senior unsecured bond at maturity; (ii) securing an
additional five-year Export Development Guarantee Facility of €1,159 million (£1.0 billion), offset by a reduction in aircraft specific
facilities of €741 million; and (iii) offset by strong operational cash flow generation.
In its assessment of going concern, the Group has modelled two scenarios referred to below as the Base Case and the Downside
Case over the period of at least 12 months from the date of the approval of these consolidated financial statements (the ‘going
concern period’). The Group’s three-year business plan, used in the creation of the Base Case, was prepared for and approved by the
Board in December 2023. The business plan takes into account the Board’s and management’s views on capacity, based on the
potential impact of the wider economic and geopolitical environments on the Group’s businesses across the going concern period.
The key inputs and assumptions underlying the Base Case through to 31 March 2025, include:
• capacity recovery modelled by geographical region with total capacity to remain above the levels obtained in 2023 throughout
the going concern period;
• passenger unit revenue per ASK is forecast to remain above the levels obtained in 2023 throughout the going concern period;
Notes to the accounts
For the year to 31 December 2023
7

• the Group has assumed that the committed and undrawn general facilities of €4,412 million will not be drawn over the going
concern period. The availability of certain of these facilities reduces over time, with €3,843 million being available to the Group at
31 March 2025;
• the Group has assumed that the undrawn aircraft facilities of €375 million, relating to specific financing structures, will be utilised
over the going concern period;
• the Group has assumed that the €500 million bond that matures in March 2025 will not be refinanced;
• of the capital commitments detailed in note 15, €3,207 million is due to be paid over the period to 31 March 2025;
• while the Group does not expect to finance all expected deliveries over the going concern period, for those it does expect to
finance, it has forecast securing between 90 and 100 per cent depending on aircraft type, or €2,235 million, of the aircraft
financing that is currently uncommitted, to align with the timing and payments for those aircraft deliveries it expects to finance,
including aircraft delivered in 2023 that had not had their financing secured at the reporting date; and
• the Group has assumed that the relevant approvals required in relation to the acquisition of the remaining 80 per cent of the share
capital of Air Europa Holdings that it does not currently own are obtained by the end of the going concern period, and that cash
outflows of €149 million will be incurred, comprising €100 million of the cash consideration and €49 million for the purchase of
ordinary shares in the Company that have not already been purchased at the balance sheet date. The deferred consideration of
€100 million to be paid on the first anniversary and the €100 million to be paid on the second anniversary of the completion of the
acquisition are assumed to occur outside of the going concern period and accordingly not included in these forecasts.
The Downside Case applies stress to the Base Case to model adverse commercial and operational impacts over the going concern
period, represented by: reduced levels of capacity operated in each month, including reductions of 25 per cent for three months
over the going concern period; reduced passenger unit revenue per available seat kilometre (ASK); increases in the price of jet fuel
by 20 per cent above that assumed in the Base Case; and increased operational costs. In the Downside Case, over the going concern
period capacity would be 10 per cent down when compared to the Base Case. The Downside Case assumes that British Airways
would be required to draw down, in full, its portion of the available US dollar Revolving Credit Facility (further information given in
notes 3 and 29f). The Downside Case also assumes that upon completion of the Air Europa Holdings acquisition, a further €200
million of working capital needs are funded by the Group. The Directors consider the Downside Case to be a severe but plausible
scenario.
Having reviewed the Base Case and the Downside Case, the Directors have a reasonable expectation that the Group has sufficient
liquidity to continue in operational existence for a period of at least 12 months from the date of approval of these consolidated
financial statements and hence continue to adopt the going concern basis in preparing the consolidated financial statements at 31
December 2023.
Consolidation
The Group financial statements include the financial statements of the Company and its subsidiaries, each made up to 31 December
together with the attributable share of results and reserves of associates and joint ventures, adjusted where appropriate to conform
to the Group’s accounting policies.
Subsidiaries are consolidated from the date of their acquisition, which is the date on which the Group obtains control and continue
to be consolidated until the date that such control ceases. Control exists when the Group is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The Group applies the acquisition method to account for business combinations. The consideration paid is the fair value of the assets
transferred, the liabilities incurred and the equity interests issued by the Group. Identifiable assets acquired and liabilities assumed in
a business combination are measured initially at their fair values at the acquisition date. Non-controlling interests represent the
portion of profit or loss and net assets in subsidiaries that are not held by the Group and are presented separately within equity in
the Consolidated balance sheet. Acquisition-related costs are expensed as incurred.
If the business combination is achieved in stages, as at the acquisition date the acquirer’s previously held equity interest in the
acquiree is remeasured to fair value at the acquisition date through the Income statement.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling
interest over the net identifiable assets acquired and liabilities assumed.
All intragroup account balances, including intragroup profits, are eliminated in preparing the consolidated financial statements.
Unconsolidated structured entities
The Group regularly uses sale and leaseback transactions to finance the acquisition of aircraft. In certain instances, the Group will
undertake several such sale and leaseback transactions at once through Enhanced Equipment Trust Certificates (EETCs). Under
each of these financing structures, a company or companies (the EETC Issuer) are established to facilitate such financing on behalf
of a number of unrelated investors. In certain of these financing structures, additional special purpose vehicles (the Lessor SPV) are
established to provide additional financing from a number of further unrelated investors to the EETC Issuer. The proceeds from the
issuance of the EETCs by the EETC Issuer, and where relevant the proceeds obtained from the Lessor SPV, are then used to
purchase aircraft solely from the Group. The Group will then enter into fixed rate lease arrangements (which meet the recognition
criteria of Asset financed liabilities) with the EETC Issuer, or where relevant the Lessor SPV, with payments made by the Group to
the EETC Issuer, or the Lessor SPV, distributed, through a trust, to the aforementioned unrelated investors. The main purpose of the
trust structure is to enhance the credit-worthiness of the Group’s debt obligations through certain bankruptcy protection provisions
and liquidity facilities, and also to lower the Group’s total borrowing cost.
The EETC Issuer and the Lessor SPV are established solely with the purpose of providing the asset-backed financing and upon
maturity of such financing are expected to have no further activity. The relevant activities of the EETC Issuer and the Lessor SPV are
restricted to pre-established financing agreements and the retention of the title of the associated financed aircraft. Accordingly, the
Group has determined that each EETC Issuer and the Lessor SPVs are structured entities. Under the contractual terms of the
financing structures, the Group has no exposure to losses in these entities, does not own any of the share capital of the EETC Issuer
or the Lessor SPV, does not have any representation on the respective boards and has no ability to influence decision-making.
8

2 Significant accounting policies continued
In addition to the above, such financial transactions expose the Group to no further significant financial or economic risks, such as no
variability over time in interest rates.
In considering the aforementioned facts, management has concluded that the Group does not have access to variable returns from
the EETC Issuers and Lessor SPVs because its involvement is limited to the payment of principal and interest under the arrangement
and, therefore, it does not control the EETC Issuers or the Lessor SPVs and as such does not consolidate them.
Further information as to the financial impact of these financial transactions is given in note 26.
Segmental reporting
Operating segments are reported in a manner consistent with how resource allocation decisions are made by the chief operating
decision-maker. The chief operating decision-maker, who is responsible for resource allocation and assessing performance of the
operating segments, has been identified as the IAG Management Committee.
Foreign currency translation
a Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the functional currency, being the
currency of the primary economic environment in which the entity operates. In particular, British Airways and IAG Loyalty have a
functional currency of pound sterling. The Group’s consolidated financial statements are presented in euros, which is the Group’s
presentation currency.
b Transactions and balances
Transactions in foreign currencies are initially recorded in the functional currency using the rate of exchange prevailing on the date
of the transaction. Monetary foreign currency balances are translated into the functional currency at the rates ruling at the balance
sheet date. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at balance
sheet exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Income statement,
except where hedge accounting is applied. Foreign exchange gains and losses arising on the retranslation of monetary assets and
liabilities classified as non-current on the Balance sheet are recognised within Net currency retranslation credits/(charges) in the
Income statement. All other gains and losses arising on the retranslation of monetary assets and liabilities are recognised in
operating profit.
c Group companies
The net assets of foreign operations are translated into euros at the rate of exchange ruling at the balance sheet date. Profits and
losses of such operations are translated into euros at average rates of exchange during the year. The resulting exchange differences
are taken directly to a separate component of equity (Currency translation reserve) until all or part of the interest is sold, when the
relevant portion of the cumulative exchange difference is recognised in the Income statement.
Property, plant and equipment
Property, plant and equipment are held at cost. The Group has a policy of not revaluing property, plant and equipment. Depreciation
is calculated to write off the cost less the estimated residual value on a straight-line basis, over the economic life of the asset.
Residual values, where applicable, are reviewed annually against prevailing market values for equivalently aged assets and
depreciation rates adjusted accordingly on a prospective basis.
a Fleet
All aircraft are stated at the fair value of the consideration given after taking account of manufacturers’ credits and pre-delivery
instalment payments (referred to as progress payments). Fleet assets owned or right of use (‘ROU’) assets are disaggregated into
separate components and depreciated at rates calculated to write down the cost of each component to the estimated residual value
at the end of their planned operational lives (which is the shorter of their useful life or lease term) on a straight-line basis.
Depreciation rates are specific to aircraft type, based on the Group’s fleet plans, within overall parameters of 23 years and up to 5
per cent residual value for short-haul aircraft and between 23 and 29 years (depending on aircraft) and up to 5 per cent residual
value for long-haul aircraft.
Right of use assets are depreciated over the shorter of the lease term and the aforementioned depreciation rates. Where the lease
includes a purchase option, at the discretion of the Group, where it is expected that the purchase option will be exercised, the
associated right of use asset is depreciated using the aforementioned depreciation rates to reflect the reasonably certain life of the
aircraft, irrespective of the lease term.
Cabin interior modifications, including those required for brand changes and relaunches, are depreciated over the lower of 12 years
and the remaining economic life of the aircraft, whether owned or leased.
Aircraft and engine spares acquired on the introduction or expansion of a fleet, as well as rotable spares purchased separately, are
carried as property, plant and equipment and generally depreciated in line with the fleet to which they relate.
b Other property, plant and equipment
Provision is made for the depreciation of all property, plant and equipment. Property, with the exception of freehold land,
is depreciated over its expected useful life over periods not exceeding 50 years, or in the case of leasehold properties, over the
duration of the lease if shorter, on a straight-line basis. Equipment is depreciated over periods ranging from four to 20 years.
c Capitalisation of interest on progress payments
Interest costs attributed to progress payments made on account of aircraft and other qualifying assets under construction are
capitalised and added to the cost of the asset concerned. All other borrowing costs are recognised in the Income statement in the
year in which they are incurred.
9

d Liquidated damages
Certain of the Group’s contractual arrangements with aircraft and engine manufacturers contain liquidated damage clauses, whereby
if the supplier breaches one or more contractual clauses (such as delays in the timing of delivery of an aircraft or engine) then
damages are payable to the Group. Liquidated damages are recognised in the Income statement only to the extent that they relate
to compensation for loss of income and/or incremental operating costs, when a contractual entitlement exists, the amounts can be
reliably measured and the receipt is virtually certain. When liquidated damages do not relate to compensation for loss of income
and/or incremental operating costs, the amounts are recorded as a reduction in the cost of the associated aircraft in the Balance
sheet and depreciated over the life of the aircraft.
When compensation, not related to the loss of income and/or incremental operating costs, is received in advance of the associated
delivery of the aircraft and/or engine, the Group recognises the amount within Other creditors until such time as the aircraft and/or
engine is delivered, at which time the amounts are transferred and recorded as a reduction in the cost of the associated asset. Such
compensation is recorded in the Cash flow statement within cash flows from investing activities under the caption of Acquisition of
property, plant and equipment and intangible assets.
e Leases
The Group leases various aircraft, properties, equipment and other assets. The lease terms of these assets are consistent with the
determined useful economic life of similar assets within property, plant and equipment.
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the
contract conveys the right to control the use of an identified tangible asset for a period in exchange for consideration. The Group
has elected not to apply such consideration where the contract relates to an intangible asset, such as for landing rights or IT
software, in which case payments associated with the contract are expensed as incurred.
Leases are recognised as a ROU asset and a corresponding lease liability at the date at which the leased asset is available for use by
the Group.
Right of use assets
At the lease commencement date a ROU asset is measured at cost comprising the following: the amount of the initial measurement
of the lease liability; any lease payments made at or before the commencement date less any lease incentives received; and any
initial direct costs. In addition, at the lease commencement date a ROU asset will incorporate unavoidable restoration costs, such as
the removal of airline-specific branding and configuration, to return the asset to its original condition, for which a corresponding
amount is recognised within Provisions. The ROU asset is depreciated over the shorter of the asset’s useful life and the lease term on
a straight-line basis. If ownership of the ROU asset transfers to the Group at the end of the lease term or the cost reflects the
exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease liabilities
Lease liabilities are initially measured at their present value, which includes the following lease payments: fixed payments (including
in-substance fixed payments), less any lease incentives receivable; variable lease payments that are based on an index or a rate;
amounts expected to be payable by the Group under residual value guarantees; the exercise price of a purchase option if the Group
is reasonably certain to exercise that option; payments of penalties for terminating the lease, if the lease term reflects the Group
exercising that option; and payments to be made under reasonably certain extension options.
Aircraft lease payments are discounted using the interest rate implicit in the lease. The interest rate implicit in the lease is the
discount rate that, at the inception of the lease, causes the aggregate present value of the minimum lease payments and the
unguaranteed residual value to be equal to the fair value of the leased asset and any initial indirect costs of the lessor. For aircraft
leases these inputs are either observable in the contract or readily available from external market data. The initial direct costs of the
lessor are considered to be immaterial. If the interest rate implicit in the lease cannot be determined, the Group entity’s incremental
borrowing rate is used.
Each lease payment is allocated between the principal and finance cost. The finance cost is charged to the Income statement over
the lease period so as to produce a constant periodic rate of interest on the remaining balance of the lease liability for each period.
After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the
lease payments made.
The carrying amount of lease liabilities is remeasured if there is a modification of the lease contract, a re-assessment of the lease
term (specifically in regard to assumptions regarding extension and termination options) and changes in variable lease payments
that are based on an index or a rate.
Amounts excluded from recognition as lease liabilities
The Group has elected not to recognise ROU assets and lease liabilities for short-term leases that have a lease term of 12 months or
less and those leases of low-value assets. Payments associated with short-term leases and leases of low-value assets are recognised
on a straight-line basis as an expense in the Income statement. Short-term leases are leases with a lease term of 12 months or less,
that do not contain a purchase option. Low-value assets comprise IT equipment and small items of office furniture.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in
the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability
is re-assessed and adjusted against the ROU asset. Extension options are included in a number of aircraft, property and equipment
leases across the Group and are reflected in the lease payments where the Group is reasonably certain that it will exercise the
option. Such variable lease payments are expensed to the Income statement as incurred.
10

2 Significant accounting policies continued
Sale and leaseback transactions
The Group regularly uses sale and lease transactions to finance the acquisition of aircraft. Each transaction is assessed as to whether
it meets the criteria within IFRS 15 ‘Revenue from contracts with customers’ for a sale to have occurred. The principal criterion for
assessing whether a sale has occurred or not, is whether the contract contains the option, at the discretion of the Group, to
repurchase the aircraft over the lease term; with the existence of such a repurchase option resulting in a sale having been deemed
not to have occurred; and if no such repurchase option exists, then a sale is deemed to have occurred. The following defines the
accounting for such transactions:
• if a sale is determined to have occurred, then the associated asset is de-recognised and a ROU asset and lease liability are
recognised. The ROU asset recognised is based on the proportion of the previous carrying amount of the asset that is retained.
Any gain or loss is restricted to the amount that relates to the rights that have been transferred to the counterparty to the
transaction; and
• where a sale is determined to have not occurred, the asset is retained on the Balance sheet within Property, plant and equipment
and an Asset financed liability recognised equal to the financing proceeds.
Cash flow presentation – lease liabilities
Lease payments are presented as follows in the Consolidated cash flow statement:
• where the proceeds received from sale and leaseback transactions represent the fair value of the asset being transferred, the total
proceeds are presented within cash flows from investing activities. Where the proceeds received from sale and leaseback
transactions exceed the fair value of the asset being transferred, the element of the proceeds equivalent to the fair value of the
asset being transferred is presented within investing activities and the amount of proceeds in excess of the fair value is presented
within financing activities;
• the repayments of the principal element of lease liabilities are presented within cash flows from financing activities;
• the payments of the interest element of lease liabilities are included within cash flows from operating activities; and
• the payments arising from variable elements of a lease, short-term leases and low-value assets are presented within cash flows
from operating activities.
Cash flow presentation – asset financed liabilities
Payments associated with asset financed liabilities are presented as follows in the Consolidated cash flow statement:
• the proceeds received from asset financed liabilities are presented within cash flows from financing activities;
• the repayments of the principal element of asset financed liabilities are presented within cash flows from financing activities; and
• the payments of the interest element of asset financed liabilities are included within cash flows from operating activities.
Lessor accounting
From time to time the Group will lease, to third parties, specific assets, including certain property, plant and equipment. On inception
of the lease, the Group determines whether each lease is a finance lease or an operating lease.
In order to make this determination, the Group assesses whether the lease transfers substantially all of the risks and rewards of
ownership to the lessee. Factors in making this assessment include, but are not limited to, whether the lease term is for the major
part of the economic life of the underlying asset and whether the underlying asset transfers to the lessee or the lessee has the option
to purchase the underlying asset at the end of the lease. Where substantially all of the risks and rewards of ownership have been
transferred, then the lease is recorded as a finance lease, otherwise it is recorded as an operating lease.
f Maintenance, repairs and overhaul
Owned aircraft
Major overhaul expenditure, including replacement spares and labour costs for airframes and engines, is capitalised and amortised
over the expected life between major overhauls or to the end of the useful life of the asset.
All other replacement spares and other costs relating to maintenance of owned fleet assets (including maintenance provided under
‘pay-as-you-go’ contracts) are charged to the Income statement on consumption or as incurred respectively.
Leased aircraft
The Group records a provision for major maintenance and overhaul events, including for airframes and engines, that occur through
usage or through the passage of time that is recognised as such activity occurs through to the next maintenance event, with a
corresponding expense recorded in the Income statement. Any subsequent changes in estimation are recognised in the Income
statement. When the maintenance and/or overhaul event occurs, the associated provision is de-recognised.
Restoration and handback obligations that arise on the inception of a lease are recognised as a provision with a corresponding
amount recognised as part of the ROU asset. Any subsequent change in estimation relating to such costs are reflected in the ROU
asset.
All other replacement spares and other costs relating to maintenance of leased fleet assets (including maintenance provided under
‘pay-as-you-go’ contracts) are charged to the Income statement on consumption or as incurred respectively.
11

Intangible assets
a Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures and represents the excess of the consideration paid
over the net fair value of the identifiable assets and liabilities of the acquiree. Where the net fair value of the identifiable assets and
liabilities of the acquiree is in excess of the consideration paid, a gain on bargain purchase is recognised immediately in the Income
statement.
For the purpose of assessing impairment, goodwill is grouped at the lowest levels for which there are separately identifiable cash
flows (cash generating units). Goodwill is tested for impairment annually and whenever indicators exist that the carrying value may
not be recoverable.
b Brands
Brands arising on the acquisition of subsidiaries are initially recognised at fair value at the acquisition date. Long established brands
that are expected to be used indefinitely are not amortised but assessed annually for impairment.
c Customer loyalty programmes
Customer loyalty programmes arising on the acquisition of subsidiaries are initially recognised at fair value at the acquisition date. A
customer loyalty programme with an expected useful life is amortised over the expected remaining useful life. Established customer
loyalty programmes that are expected to be used indefinitely are not amortised but assessed annually for impairment.
d Landing rights
Landing rights acquired in a business combination are recognised at fair value at the acquisition date. Landing rights acquired from
other airlines are capitalised at cost.
Capitalised landing rights based outside of the UK and the EU are amortised on a straight-line basis over a period not exceeding 20
years. Capitalised landing rights based within the UK and the EU are not amortised, as regulations provide that these landing rights
are perpetual.
e Contract-based intangibles
Contract-based intangibles acquired in a business combination are recognised initially at fair value at the acquisition date and
amortised over the remaining life of the contract.
f Software
The cost to purchase or develop computer software that is separable from an item of related hardware is capitalised separately and
amortised on a straight-line basis generally over a period not exceeding five years, with certain specific software developments
amortised over a period of up to ten years.
In certain instances, the Group enters into cloud computing arrangements with third-party providers, such as software as a service
(SaaS), where the Group is provided the right to access and use the application software over the contract term. At inception of the
contract, the Group will assess whether such an arrangement gives rise to the recognition of a software intangible asset.
Where the Group determines that no software intangible asset should be recognised, the cloud computing arrangement is
determined to be a service contract and the associated fees paid are expensed as incurred. In addition, the costs incurred for both
the customisation and configuration of the application software are generally expensed as incurred.
g Emissions allowances
Where an operating company purchases emissions allowances these amounts are recognised at cost and recorded within Intangible
assets. As an operating company emits CO
2
equivalent and builds up an obligation to the relevant authorities, a provision is
recognised.
Emissions allowances recorded within Intangible assets are not revalued or amortised but are tested for impairment whenever
indicators exist that the carrying value may not be recoverable. For those obligations arising for which the operating company has
purchased emission allowances to offset the emissions, the provision is recognised at the weighted average cost of the intangible
asset. For those obligations arising for which the operating company has not yet purchased emission allowances to offset the
emissions, the provision is recognised at the market price of the allowances required at the reporting date. As the provision is
recognised, a corresponding amount is recorded in the Income statement within Fuel, oil costs and emission charges.
The Group’s emissions obligation, recognised as a separate liability, is extinguished when the associated emission certificates are
surrendered, which is typically within 12 months of the reporting date.
From time to time the Group enters into sale and repurchase transactions for specified emission allowances. Such transactions do
not meet the recognition criteria of a sale under IFRS 15 and accordingly the asset is retained on the Balance sheet within Intangible
assets and an Other financing liability recognised equal to the proceeds received.
12

2 Significant accounting policies continued
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the value by which the asset’s carrying value exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and value-in-use. Non-financial assets other
than goodwill that were subject to an impairment are reviewed for possible reversal of the impairment at each reporting date.
a Property, plant and equipment, including Right of use assets
The carrying value is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be
recoverable and the cumulative impairment losses are shown as a reduction in the carrying value of property, plant and equipment.
b Intangible assets
Intangible assets are held at cost and are either amortised on a straight-line basis over their economic life, or they are deemed to
have an indefinite economic life and are not amortised. Indefinite life intangible assets are tested annually for impairment or more
frequently if events or changes in circumstances indicate the carrying value may not be recoverable.
Investments in associates and joint ventures
An associate is an undertaking in which the Group has a long-term equity interest and over which it has the power to exercise
significant influence. Where the Group cannot exercise control over an entity in which it has a shareholding greater than 51 per cent,
the equity interest is treated as an associate undertaking.
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require unanimous consent of the parties sharing control. The considerations made in
determining significant influence or joint control are similar to those necessary to determine control over subsidiaries.
Investments in associates and joint ventures are accounted for using the equity method, and initially recognised at cost. The Group’s
interest in the net assets of associates and joint ventures is included in Investments accounted for using the equity method in the
Balance sheet and its interest in their results is included in the Income statement, below operating result. The attributable results of
those companies acquired or disposed of during the year are included for the periods of ownership.
Financial instruments
a Financial assets and liabilities
Financial assets and financial liabilities are classified, upon initial recognition, as measured at amortised cost, at fair value through
other comprehensive income (OCI), or fair value through profit or loss. Financial assets and financial liabilities are not reclassified
subsequent to their initial recognition unless the Group changes its business model for managing financial assets.
The classification of financial assets and financial liabilities at initial recognition depends on the financial assets’ and financial
liabilities’ contractual cash flow characteristics and the Group’s business model for managing them. In order for a financial asset or
financial liability to be classified and measured at amortised cost or fair value through OCI, it needs to give rise to cash flows that are
‘solely payments of principal and interest’ (SPPI) on the principal amount outstanding. A financial asset or financial liability that is not
SPPI is classified and measured at fair value through profit or loss. This assessment is performed on an instrument by instrument
basis.
The Group’s business model for managing financial assets and financial liabilities establishes how it manages its financial assets and
financial liabilities in order to generate cash flows. The business model determines whether cash flows will result from collecting
contractual cash flows, selling the financial assets, or both. Financial assets and financial liabilities classified and measured at
amortised cost are held within a business model with the objective to hold financial assets in order to collect contractual cash flows
while financial assets and financial liabilities classified and measured at fair value through OCI are held within a business model with
the objective of both holding to collect contractual cash flows and selling.
Long-term borrowings
Long-term borrowings are recorded at amortised cost, including lease liabilities which contain interest rate swaps that are closely
related to the underlying financing and as such are not accounted for as an embedded derivative.
Convertible debt
Convertible bonds are classified as either compound financial instruments or hybrid financial instruments depending on the
settlement alternatives upon redemption. Where the bondholders exercise their equity conversion options and the Group has no
alternative other than to settle the convertible bonds into a fixed number of ordinary shares of the Company, then the bonds are
classified as a compound financial instrument. Where the Group has an alternative settlement mechanism to the convertible bonds
that permits settlement in cash, then the convertible instrument is classified as a hybrid financial instrument.
Convertible bonds that are classified as compound financial instruments consist of a liability and an equity component. At the date
of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible
debt, and is subsequently recorded on an amortised cost basis using the effective interest method until extinguished on conversion
or maturity of the bonds, and is recognised within Borrowings. The difference between the proceeds of issue of the convertible bond
and the fair value assigned to the liability component, representing the embedded option to convert the liability into equity of the
Group, is included in the equity portion of the convertible bond in Other reserves and is not subsequently remeasured. The interest
expense on the liability component is calculated by applying the effective interest rate for similar non-convertible debt to the liability
component of the instrument. The difference between this value and the interest paid is added to the carrying amount of the liability.
13

Convertible bonds that are classified as hybrid financial instruments consist only of a liability component recognised within
Borrowings. At the date of issue, the entirety of the convertible bonds is accounted for at fair value with subsequent fair value gains
or losses recorded within Borrowings. The fair value of such financial instruments is obtained from their respective quoted prices in
active markets, with the portion of the change in fair value attributable to changes in the credit risk of the convertible bonds
recognised in Other comprehensive income and the portion of the change in fair value attributable to market conditions recognised
in the Income statement within Finance costs.
Issue costs associated with compound financial instruments are apportioned between the liability and equity components of the
convertible bonds where appropriate based on their relative carrying values at the date of issue. The portion relating to the equity
component is charged directly against equity. Issue costs associated with hybrid financial instruments are expensed immediately to
the Income statement.
Other equity investments
Other equity investments are non-derivative financial assets including listed and unlisted investments, excluding interests in
associates and joint ventures. On initial recognition, these equity investments are irrevocably designated as measured at fair value
through Other comprehensive income. They are subsequently measured at fair value, with changes in fair value recognised in Other
comprehensive income with no recycling of these gains and losses to the Income statement when the investment is sold or a change
in the structure of transaction changes its classification as an Other equity instrument. Dividends received on other equity
investments are recognised in the Income statement.
The fair value of quoted investments is determined by reference to bid prices at the close of business on the balance sheet date.
Where there is no active market, fair value is determined using valuation techniques.
Financial instruments held for trading
Financial instruments are classified as held for trading if they are incurred for the purpose of selling the associated asset in the near
term and not having been purchased for operational purposes.
By entering into short-term forward sales contracts, the Group seeks to optimise capital allocation while minimising the associated
economic risk.
Interest-bearing deposits
Interest-bearing deposits, principally comprising funds held with banks and other financial institutions with contractual cash flows
that are SPPI, and held in order to collect contractual cash flows, are carried at amortised cost using the effective interest method.
Impairment of financial assets
At each balance sheet date, the Group recognises provisions for expected credit losses on financial assets measured at amortised
cost, based on either 12-month or lifetime losses depending on whether there has been a significant increase in credit risk since initial
recognition. The simplified approach, based on the calculation and recognition of lifetime expected credit losses, is applied to
contracts that have a maturity of one year or less, including trade receivables.
When determining whether there has been a significant increase in credit risk since initial recognition and when estimating the
expected credit loss, the Group considers reasonable and supportable information that is relevant and available. This includes both
quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment,
including forward-looking information. Such forward-looking information takes into consideration the forecast economic conditions
expected to impact the outstanding balances at the balance sheet date. A financial asset is written off when there is no reasonable
expectation of recovery, such as the customer having filed for liquidation.
b Cash and cash equivalents
Cash and cash equivalents include cash in hand and deposits with any qualifying financial institution repayable on demand or
maturing within three months of the date of acquisition and which are subject to an insignificant risk of change in value.
c Derivative and non-derivative financial instruments and hedging activities
Derivative financial instruments, comprising interest rate swap derivatives, foreign exchange derivatives and fuel derivatives
(including options, swaps and forward contracts) are initially recognised at fair value on the date a derivative contract is entered into
and are subsequently remeasured at their fair value. They are classified as financial instruments through the Income statement. The
method of recognising the resulting gain or loss arising from remeasurement depends on whether the derivative is designated as a
hedging instrument, and if so, the nature of the item being hedged (as detailed below under cash flow hedges). The time value of
options is excluded from the designated hedging instrument and accounted for as a cost of hedging. Movements in the time value of
options are recognised in Other comprehensive income until the underlying transaction affects the Income statement.
When forward contracts are used to hedge forecast transactions, the Group generally designates only the spot component of the
forward contract as the hedging instrument within a hedge relationship. The effective portion of gains or losses arising on the
change in fair value of the spot component are recognised within Other comprehensive income in the Cash flow hedge reserve
within equity. The forward component of a forward contract is not designated within a hedge relationship, with the associated gains
and losses on the forward component recorded within Other comprehensive income in the Cost of hedging reserve within equity
until the underlying transaction affects the Income statement.
To manage foreign exchange movements on foreign currency customer cash inflows (denominated in US dollars, euros and
Japanese yen), certain non-derivative repayment instalments on foreign currency-denominated interest-bearing liabilities are
designated as hedging instruments within a hedge relationship. The effective portion of gains or losses arising from movements in
foreign exchange rates are recognised within Other comprehensive income in the Cash flow hedge reserve within equity.
Accumulated gains or losses within the cash flow hedge reserve are transferred to Sales in advance of carriage in the same period as
the forecast transaction occurs or when hedge accounting is discontinued when the forecast transaction is no longer expected to
occur, at which point amounts are immediately reclassified to the Income statement.
14

2 Significant accounting policies continued
When a derivative is designated as a hedging instrument and that instrument expires, is sold or is restructured, if the initial forecast
transaction is still expected to occur, any cumulative gain or loss remains in the cash flow hedge reserve until such time as the hedge
item impacts the Income statement. Where there is a change in the risk management objective, then hedge accounting is
discontinued and the associated cumulative gain or loss arising prior to the change in risk management objective remains in the cash
flow hedge reserve until such time as the underlying hedged item impacts the Income statement had the risk management objective
continued to have been met. Where a forecast transaction which was previously determined to be highly probable and for which
hedge accounting applied, is no longer expected to occur, hedge accounting is discontinued and the cumulative gain or loss in the
cash flow hedge reserve is immediately reclassified to the Income statement.
Each operating company enters into foreign currency derivative contracts, that are not designated in a hedge relationship, in order
to mitigate foreign exchange movements on financial liabilities designated in currencies other than the presentational currency of
each operating company, including but not limited to, lease liabilities. Movements in the fair value of such derivatives are recognised
in the Income statement in the period in which they occur and are presented within Net currency retranslation charges.
Exchange gains and losses on monetary investments are taken to the Income statement unless the item has been designated and is
assessed as an effective hedging instrument. Exchange gains and losses on non-monetary investments are reflected in equity.
d Cash flow hedges
Changes in the fair value of derivative financial instruments designated as in a cash flow hedge relationship of a highly probable
expected future transaction are assessed for effectiveness and accordingly recorded in the Cash flow hedge reserve within equity.
Hedge effectiveness
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness
assessments, to ensure that an economic relationship exists between the hedged item and hedging instrument. A hedging
relationship qualifies for hedge accounting if it meets all of the following effectiveness requirements: (i) there is ‘an economic
relationship’ between the hedged item and the hedging instrument; (ii) the effect of credit risk does not dominate the value changes
that result from that economic relationship; and (iii) the hedge ratio is aligned with the requirements of the Group’s risk management
strategy and in all instances is maintained at a ratio of 1:1.
The Group assesses whether the derivative designated as the hedging instrument in a hedge relationship is expected to be on
inception and at each reporting date effective in offsetting the changes in cash flows of the hedged item using the hypothetical
derivative model.
Sources of ineffectiveness include the following:
• in hedges of fuel purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what was originally
estimated, or if there are changes in the credit risk of the Group or the derivative counterparty;
• in hedges of foreign currency purchases, ineffectiveness may arise if the timing of the forecast transaction changes from what was
originally estimated, or if there are changes in the credit risk of the Group or the derivative counterparty;
• in hedges of interest rate payments, ineffectiveness may arise if there are differences in the critical terms between the interest rate
derivative instrument and the underlying hedged item, or if there are changes in the credit risk of the Group or the derivative
counterparty; and
• in all hedges, ineffectiveness may arise if there are differences between the critical terms of the hedging instrument and the
hypothetical derivative, such as where on inception of the hedge relationship the fair value of the hedging instrument is not zero.
Ineffectiveness is recorded within the Income statement as Realised/unrealised (losses)/gains on derivatives not qualifying for hedge
accounting and presented within Other non-operating credits.
Reclassification and transfer adjustments
Gains and losses accumulated in the Cash flow hedge reserve within equity are either reclassified from the Cash flow hedge reserve
when the hedged item affects the Income statement, or transferred from the Cash flow hedge reserve when the hedged item gives
rise to recognition in the Balance sheet as follows:
• where the forecast hedged item results in the recognition of expenses within the Income statement (such as the purchase of jet
fuel for which both fuel and the associated foreign currency derivatives are designated as the hedging instrument), the
accumulated gains and losses recorded in both the Cash flow hedge reserve and the Cost of hedging reserve are reclassified and
included in the Income statement within the same caption as the hedged item is presented. Such reclassification occurs in the
same period as the hedged item is recognised in the Income statement;
• where the forecast hedged item results in the recognition of a non-financial asset (such as the purchase of aircraft for which
foreign currency derivatives are designated as the hedging instrument or where the purchase of jet fuel gives rise to the
recognition of fuel inventory in storage facilities), or a non-financial liability (such as the sales in advance of carriage for which both
foreign currency derivatives and non-financial derivative instruments are designated as the hedging instrument), the accumulated
gains and losses recorded within both the Cash flow hedge reserve and the Cost of hedging reserve are transferred and included
in the initial cost of the asset and liability, respectively. These gains or losses are recorded in the Income statement as the non-
financial asset and the non-financial liability affects the Income statement (which for aircraft is through Depreciation, amortisation
and impairment over the expected life of the aircraft, for fuel inventory through Fuel, oil costs and emission charges when it is
consumed and for sales in advance of carriage through Passenger revenue when the flight is flown); and
• where the forecast hedged item results in the recognition of a financial asset or liability (such as variable rate debt for which
interest rate swaps are designated as the hedging instrument), the accumulated gains and losses recorded within the Cash flow
hedge reserve are reclassified to the Income statement to Interest expense within Finance costs at the same time as the interest
income or expense arises on the hedged item.
Further information on the risk management activities of the Group is given in note 29.
15

e Fair value hedges
Changes in the fair value of derivative financial instruments designated in a fair value hedge relationship are recorded within the
Income statement as Net change in the fair value associated with fair value hedges within Other non-operating credits. The change
in the fair value of the hedged item attributable to the risk being hedged is recorded as part of the overall carrying amount of the
hedged item and is recorded within the Income statement as Net change in the fair value associated with fair value hedges within
Other non-operating credits.
For fair value hedges associated with financial liabilities measured at amortised cost, any adjustment to the carrying value is
amortised to the Income statement from the date of the cessation of the hedge relationship through to the maturity of the hedged
item using the effective interest rate method.
If the hedged item is de-recognised, the unamortised fair value is recognised immediately in the Income statement.
Ineffectiveness included in fair value hedges of interest rate payments may arise if there are differences in the critical terms between
the interest rate derivative instrument and the underlying hedged item, or if there are changes in the credit risk of the Group or the
derivative counterparty.
f Interest rate benchmark reform
In 2020 the Group adopted the amendments to IFRS 9 and IFRS 7 relating to the interest rate benchmark reform Phase 1, (‘Phase 1’)
and in 2021 the Group adopted the amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 relating to the interest rate benchmark
reform Phase 2 (‘Phase 2’).
The Phase 1 amendments provide temporary relief from applying certain hedge accounting requirements to hedging relationships
directly affected by Interbank Offered Rates (‘IBOR’) reform. The reliefs have the effect that IBOR reform does not cause hedge
accounting to terminate prior to contracts being amended. Where transition to an alternative benchmark rate has taken place, the
Group ceases to apply the Phase 1 amendments and instead applies the Phase 2 amendments.
Hedge accounting
During the course of 2023, the Group ceased to apply the Phase 1 amendments, as the last of the associated IBORs transitioned to
alternative benchmarks. Prior to these transitions and where the Group applied the Phase 1 amendments, the following reliefs were
applied:
• when considering the highly probable requirement, the Group assumed that those benchmark rates that needed to be transitioned
to an alternative benchmark rate, on which the Group’s hedged long-term borrowings were based, did not change as a result of
IBOR reform;
• in assessing whether the hedge was expected to be highly effective on a forward-looking basis the Group assumed that those
benchmark rates that needed to be transitioned to an alternative benchmark rate, on which the cash flows of the hedged long-
term borrowings and the interest rate swaps that hedge them were based, were not altered by IBOR reform; and
• the Group has not reclassified the Cash flow hedge reserve relating to the period after the IBOR reform is expected to take effect.
When the Group ceased to apply the Phase 1 amendments, the Group amended its hedge designation to reflect changes which are
required by IBOR reform, but only to make one or more of the following changes:
• designating an alternative benchmark rate (contractually or non-contractually specified) as the hedged risk;
• amending the description of the hedged item, including the description of the designated portion of the cash flows being hedged; or
• amending the description of the hedging instrument.
The associated hedge documentation was updated to reflect these changes in designation by the end of the reporting period in
which the changes were made. Such amendments did not give rise to the hedge relationship being discontinued.
When the Group transitioned to alternative benchmark rates, the accumulated amounts within the cash flow hedge reserve were
determined to be based on the alternative benchmark rates and no reclassification adjustments were made from the cash flow
hedge reserve to the Income statement.
Long-term borrowings and lease liabilities
Phase 2 of the amendments required that, for financial instruments measured using amortised cost measurement, changes to the
basis for determining the contractual cash flows required by interest rate benchmark reform are reflected by adjusting their effective
interest rate prospectively. No gain or loss was recognised upon transition to the new benchmark. The expedient was only applicable
to direct changes that are required by interest rate benchmark reform.
For lease liabilities where there was a change to the basis for determining the contractual cash flows, as a practical expedient the
lease liability was remeasured by discounting the revised lease payments using a discount rate that reflected the change in the
interest rate where the change was required by IBOR reform.
No amounts have been recorded in the current or prior periods as a result of these amendments.
16

2 Significant accounting policies continued
Employee benefit plans
a Pension obligations
The Group has both defined benefit and defined contribution plans. A defined contribution plan is a pension plan under which the
Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions
if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior
years.
Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent
on one or more factors such as age, years of service and compensation.
The Group’s net obligation in respect of defined benefit pension plans is calculated separately for each plan by estimating the
amount of future benefit that employees have earned in return for their service in the current and prior years. The benefit is
discounted to determine its present value, and the fair value of any plan assets are deducted. The discount rate is the yield at the
balance sheet date on AA-rated corporate bonds of the appropriate currency that have durations approximating those of the
Group’s obligations. The calculation is performed by a qualified actuary using the projected unit credit method. When the net
obligation calculation results in an asset for the Group, the recognition of an asset is limited to any future refunds, net of the relevant
taxes, from the plan or reductions in future contributions to the plan (‘the asset ceiling’). The fair value of the plan assets is based on
market price information and, in the case of quoted securities, is the published bid price. The fair value of insurance policies which
exactly match the amount and timing of some or all benefits payable under the scheme are deemed to be the present value of the
related obligations. Longevity swaps are measured at their fair value.
Current service costs are recognised within employee costs in the year in which they arise. Past service costs are recognised in the
event of a plan amendment or curtailment, or when the Group recognises related restructuring costs or severance obligations. The
net interest is calculated by applying the discount rate used to measure the defined benefit obligation at the beginning of the period
to the net defined benefit liability or asset, taking into account any changes in the net defined benefit liability or asset during the
period as a result of contributions and benefit payments. Net interest and other expenses related to the defined benefit plans are
recognised in the Income statement. Remeasurements, comprising IAS 19 gains and losses, the effect of the asset ceiling (excluding
interest) and the return on plan assets (excluding interest), are recognised immediately in Other comprehensive income.
Remeasurements are not reclassified to the Income statement in subsequent periods.
b Severance obligations
Severance obligations are recognised when employment is terminated by the Group before the normal retirement date, or whenever
an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises a provision for severance
payments when it is demonstrably committed to either terminating the employment of current employees according to a detailed
formal plan without realistic possibility of withdrawal, or providing severance payments as a result of an offer made to encourage
voluntary redundancy.
Other employee benefits are recognised when there is deemed to be a present obligation.
c Flight crew provisions
The Group’s obligations in respect of flight crew provisions are calculated separately for each collective bargaining agreement. In
estimating these obligations, the Group makes assumptions regarding the number of employees that will elect to take early
retirement under these agreements, and the age at which they make this election (where relevant), using the probability weighted
methodology. The Group recognises a provision for service costs from the date of employment of the relevant individual, with the
corresponding amount recorded within the Income statement. The provisions recognised are discounted, at the reporting date and
the effect of unwinding of these discount rates are recognised as a finance cost in the Income statement.
Remeasurements of the provisions are made for changes in financial assumptions and recorded in Other comprehensive income. The
Group records changes through Other comprehensive income, where assumptions regarding the elections to be made by individuals
differs to actual elections. These calculations are performed by a qualified actuary using the projected unit credit method.
Taxation
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities, based on tax rates and laws that are enacted or substantively enacted at the balance sheet date.
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their
carrying amounts in the financial statements, with the following exceptions:
• where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
• in respect of taxable temporary differences associated with investments in subsidiaries or associates, where the timing of the
reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the
foreseeable future; and
• deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when
the related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet
date.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax
is recognised in the Income statement.
17

Inventories
Inventories are valued at the lower of cost and net realisable value. Such cost is determined by the weighted average cost method.
Inventories include mainly aircraft spare parts, repairable aircraft engine parts and fuel held in storage facilities.
Share-based payments
The Group operates a number of equity-settled, share-based payment plans, under which the Group awards equity instruments of
the Group for services rendered by employees. The fair value of the share-based payment plans is measured at the date of grant
using a valuation model provided by external specialists. The resulting cost, as adjusted for the expected and actual level of vesting
of the plan, is charged to the Income statement over the period in which the options vest. At each balance sheet date before vesting,
the cumulative expense is calculated, representing the extent to which the vesting period has expired and management’s best
estimate of the achievement or otherwise of non-market conditions, and accordingly the number of equity instruments that will
ultimately vest. The movement in the cumulative expense since the previous balance sheet date is recognised in the Income
statement with a corresponding entry in equity.
Treasury shares
When the share capital of the Company is repurchased, the amount of the consideration paid, including directly attributable
transaction costs, is recognised as a deduction from equity within the treasury share reserve. When treasury shares are sold or
reissued, the amount received is recognised as an increase in equity and the resulting gain or loss on the transaction is presented as
an adjustment to Retained earnings with no gain or loss recorded in the Income statement.
Provisions
Provisions are made when all of the following criteria have been met: (i) an obligation exists for a present liability in respect of a past
event; (ii) where the amount of the obligation can be reliably estimated; and (iii) where it is considered probable that an outflow of
economic resources will be required to settle the obligation. Where it is not considered probable that there will be an outflow of
economic resources required to settle the obligation, the Group does not recognise a provision, but discloses the matter as a
contingent liability. The Group assesses whether each matter is probable of there being an outflow of economic resources to settle
the obligation at each reporting date.
Employee leaving indemnities and other employee provisions are recorded for flight crew who, meeting certain conditions, have the
option of being placed on reserve or of taking early retirement. The Group is obligated to remunerate these employees until they
reach the statutory retirement age. The calculation is performed by qualified independent actuaries using the projected unit credit
method.
Other employee related provisions are recognised for direct expenditures of business reorganisation such as severance payments
(restructuring provisions) where plans are sufficiently detailed and well advanced, and where appropriate communication to those
affected has been undertaken at the balance sheet date.
The method for determining legal claims provisions is determined on a claim by claim basis. Where a claim includes a significant
population of items, the weighted average provision is estimated by determining all potential outcomes and the probability of their
occurrence. Where a claim relates to a single item, then the Group determines the associated provision by applying the most likely
outcome giving consideration to alternative outcomes. Where an individual claim is significant, the disclosure of quantitative
information is restricted to the extent that it does not prejudice the outcome of the claim. If the effect is material, expected future
cash flows are discounted using a rate that reflects, where appropriate, the risks specific to the provision. Where discounting is used,
the effect of unwinding the discount rate is recognised as a Finance cost in the Income statement.
Revenue recognition
Passenger revenue
The Group’s revenue primarily derives from transportation services for both passengers and cargo. Revenue is recognised when the
transportation service has been provided.
Passenger tickets are generally paid for in advance of transportation and are recognised, net of discounts, as Deferred revenue and
presented within current liabilities until either: (i) the customer has flown; or (ii) where the customer does not fly on the intended
date and has purchased a non-flexible fare.
For flexible and semi-flexible tickets, when the customer does not travel on the intended date, a term referred to as ‘unused tickets’,
the customer has a number of options they can elect to apply, depending on the fare type: (i) reschedule the date of intended travel;
(ii) request a refund; or (iii) request a voucher.
The Group estimates the amount of these unused tickets for which customers are not expected to exercise their remaining rights
prior to expiry based on the terms and conditions of the ticket and analysis of historical experience, a term referred to as ‘unused
ticket breakage’. This revenue is recognised based on the terms and conditions of the ticket and analysis of historical experience. For
unused ticket breakage, revenue is recognised only when the risk of a significant reversal of revenue is remote. The estimation
regarding historical experience is updated at each reporting date.
Where a flight is cancelled, the customer has a number of options they can elect to apply to their unused tickets: (i) compensation;
(ii) a refund; (iii) changing to an alternative flight; or (iv) the receipt of a voucher.
18

2 Significant accounting policies continued
The presentation in the financial statements of these customer options, to the extent they differ to the recognition criteria stated
above, are as follows:
• Compensation for flight cancellation - such payments are presented net within Passenger revenue against the original ticket
purchased;
• Refund - deferred revenue is reduced and no amount is recorded within revenue;
• Changing to an alternative flight – amounts are retained within Deferred revenue until such time as the flight is flown, at which
time it is recorded within Passenger revenue; and
• Voucher - retained within Deferred revenue until such time as it is redeemed for a flight or it expires, at which time it is recorded
within Passenger revenue.
In relation to vouchers, the Group also recognises revenue by estimating the amount of vouchers that customers are not expected to
exercise their remaining rights prior to expiry using analysis of historical experience. The estimation regarding historical experience is
updated at each reporting date. The amount of such revenue recognised is constrained, where necessary, such that the risk of a
significant reversal of revenue in the future is remote.
Payments received in relation to certain ancillary services regarding passenger transportation, such as change fees, are not
considered to be distinct from the performance obligation to provide the passenger flight. Payments relating to these ancillary
services are recognised in Deferred revenue in current liabilities until the customer has flown.
The Group considers whether it is an agent or a principal in relation to passenger transportation services by considering whether it
has a performance obligation to provide services to the customer or whether the obligation is to arrange for the services to be
provided by a third party. The Group acts as an agent where: (i) it collects various taxes, duties and fees assessed on the sale of
tickets to passengers and remits these to the relevant taxing authorities; and (ii) where it provides interline services to airline
partners outside of the Group. Commissions earned in relation to agency services are recognised as revenue when the underlying
goods or services have been transferred to the customer. In all other instances, the Group considers it acts as the principal in relation
to passenger transportation services.
Cargo revenue
The Group has identified a single performance obligation in relation to cargo services and the associated revenue is measured at its
standalone selling price and recognised on satisfaction of the performance obligation, which occurs on the fulfilment of the
transportation service.
Other revenue
The Group has identified several performance obligations in relation to services that give rise to revenue being recognised within
Other revenue. These services, their performance obligations and associated revenue recognition include:
• the provision of maintenance services and overhaul services for engines and airframes, where the Group is engaged to enhance an
asset while the customer retains control of the asset. Accordingly, the performance obligations are satisfied, and revenue
recognised, over time. The Group estimates the proportion of the contract completed at the reporting date and recognises
revenue based on the percentage of completion of the contract;
• the provision of ground handling services, where the performance obligations are fulfilled when the services are provided;
• the provision of holiday and hotel services, where the performance obligations are satisfied over time as the customer receives the
benefit of the service; and
• brand and marketing activities, where the performance obligations are satisfied as the associated activities occur.
Customer loyalty programmes
The Group operates four principal loyalty programmes: the British Airways Executive Club, Iberia Plus, Vueling Club and the Aer
Lingus Aer Club. The customer loyalty programmes award travellers Avios to redeem for various rewards, primarily redemption
travel, including flights, hotels and car hire. Avios are also sold to commercial partners to use in loyalty activity.
Avios issuance
When issued, the standalone selling price of an Avios is recorded within Deferred revenue in current liabilities until the customer
redeems the Avios. The standalone selling price of Avios is based on the value of the awards for which the points could be
redeemed. The Group also recognises revenue associated with the proportion of Avios which are not expected to be redeemed,
referred to as ‘breakage’, based on the results of modelling using historical experiences and expected future trends in customer
behaviour, up until the reporting date. The amount of such revenue recognised is limited, where necessary, such that the risk of a
significant reversal of revenue in the future is remote.
Where the issuance of Avios arises from travel on the Group’s airlines, the consideration received from the customer may differ to
the aggregation of the relative standalone selling prices. In such instances the allocation of the consideration to each performance
obligation is undertaken on a proportional basis using the relative standalone selling prices.
The Group has contractual arrangements with non-Group airlines and non-air partners for the issuance and redemption of Avios, for
which it has identified the following performance obligations:
Companion vouchers
Certain non-air partners issue their card holders with companion vouchers, which forms part of the variable consideration of the
overall contract, depending on the level of expenditure by the card holders, for redemption on the airlines of the Group for the same
flight and class of cabin as the underlying fare being purchased. The Group estimates the standalone selling price of the companion
voucher performance obligation, using valuation techniques, by reference to the amount that a third party would be prepared to pay
in an arm’s length transaction.
19

Brand and marketing activities
For both air and non-air partners, the Group licenses the Avios and the airline brands for certain activities, such as the creation of co-
branded credit cards. In addition, the Group has certain contractual arrangements whereby it commits to provide marketing services
to the members of the loyalty schemes on behalf of those partners. For the provision of both brand and marketing services, the
partner receives benefits incremental to the issuance of Avios. The Group estimates the standalone selling price of the brand and
marketing performance obligations, using valuation techniques, by reference to the amount that a third party would be prepared to
pay in an arm’s length transaction for access to comparable brands for the period over which they use the brand. For brand services,
as the Group considers that the partner has the right to use the brand, revenue is recognised as the brand service is provided and
not over time. For marketing performance obligations, revenue is recognised as the marketing activities occur based on when the
partner receives the benefit of those services.
Upfront payments
Where a partner makes an upfront payment to the Group which does not relate to any specific performance obligation, then the
Group considers such payments as advance payments for future goods and services and the associated revenue is recognised as
those goods and services are provided, as detailed above. In such instances the payment is allocated across all of the performance
obligations over the contract term. The Group estimates the expected level of Avios to be issued over the contract term using
experience, historical and expected future trends, and allocates the payments to the relevant performance obligations accordingly.
At each reporting date, the Group updates its estimate of the number of Avios expected to be issued over the total contract term
and recognises a cumulative catch-up adjustment where necessary.
When a partner makes an upfront payment to the Group, the Group assesses whether such a payment is representative of a
significant financing event. Where a significant financing component is identified, the Group estimates a market rate of interest that
an arm’s length financial liability of similar size and tenor would yield. The Group recognises the imputed interest within the
Income statement as Other finance costs within Finance costs.
Other considerations
The Group considers whether it is an agent or a principal in relation to the loyalty services by considering whether it has a
performance obligation to provide services to the customer or whether the obligation is to arrange for the services to be provided
by a third party. In particular, the Group acts as an agent where customers redeem their Avios on interline partner flights outside of
the Group, where the fees payable to the interline partner are presented net against the associated release of the Deferred revenue.
Exceptional items
Exceptional items are those that in management’s view need to be separately disclosed by virtue of their size or nature and where
such presentation is relevant to an understanding of the Group’s financial performance. While management has defined a list of
items and a quantitative threshold that would merit categorisation as exceptional that has been established through historical
experience, the Group retains the flexibility to add additional items should their size or nature merit such presentation. The
accounting policy in respect of exceptional items and classification of an item as exceptional is approved by the Board, through the
Audit and Compliance Committee.
The financial performance of the Group is monitored by the Management Committee and the Board on a pre-exceptional basis to
enable comparison to prior reporting periods as well as to other selected companies, and also for making strategic, financial and
operational decisions.
The exceptional items recorded in the Income statement include, but are not limited to, items such as significant settlement
agreements with the Group’s pension schemes; significant restructuring; the impact of business combination transactions that do not
contribute to the ongoing results of the Group; significant discontinuance of hedge accounting; legal settlements; individually
significant tax transactions; and the impact of the sale, disposal or impairment of an asset or investment in a business. Where
exceptional items are separately disclosed, the resultant tax impact is additionally separately disclosed. Certain exceptional items
may cover more than a single reporting period, such as significant restructuring events, but not more than two reporting periods.
Further information is given in the Alternative performance measures section.
Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received. Loans provided and/or
guaranteed by governments that represent market rates of interest are recorded at the amount of the proceeds received and
recognised within Borrowings. Those loans provided and/or guaranteed by governments that represent below market rates of
interest are measured at inception at their fair value and recognised within Borrowings, with the differential to the proceeds received
recorded within Deferred income and released to the relevant financial statement caption in the Income statement on a systematic
basis. Grants that compensate the Group for expenses incurred are recognised in the Income statement in the relevant financial
statement caption on a systematic basis in the periods in which the expenses are recognised.
Critical accounting estimates, assumptions and judgements
The preparation of financial statements requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities, income and expenses. These judgements, estimates
and associated assumptions are based on historical experience and various other factors believed to be reasonable under the
circumstances. Actual results in the future may differ from judgements and estimates upon which financial information has
been prepared. These underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised prospectively.
20

2 Significant accounting policies continued
Estimates
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are as follows:
a Employee benefit obligations, employee leaving indemnities, other employee related restructuring
At 31 December 2023 the Group recognised €1,380 million in respect of employee benefit assets (2022: €2,334 million) and €175
million in respect of employee benefit obligations (2022: €217 million). Further information on employee benefit obligations is
disclosed in note 34.
The cost of employee benefit obligations, employee leaving indemnities and other employee-related provisions is determined using
the valuation requirements of IAS 19. These valuations involve making assumptions about discount rates, future salary increases,
mortality rates and future pension increases. Due to the long-term nature of these schemes, such assumptions are subject to
significant uncertainty. The assumptions relating to these schemes are disclosed in note 34. The Group determines the assumptions
to be adopted in discussion with qualified actuaries. Any difference between these assumptions and the actual outcome will impact
future net assets and total comprehensive income. The sensitivity to changes in pension assumptions is disclosed in note 34.
Under the Group’s Airways Pension Scheme (APS) and New Airways Pension Scheme (NAPS) defined benefit schemes, increases to
pensions are based on the annual Government Pension Increase (Review) Orders, which since 2011 have been based on the
Consumer Prices Index (CPI). Additionally, in APS there is provision for the Trustee to pay increases up to the level of the Retail
Prices Index (RPI), subject to certain affordability tests. Historically market expectations for RPI could be derived by comparing the
prices of UK Government fixed-interest and index-linked gilts, with CPI assessed by considering the Bank of England’s inflation
target and comparison of the construction of the two inflation indices.
In November 2020, the UK Government and UK Statistics Authority (UKSA) confirmed alignment of RPI with CPIH (a variant of CPI)
from February 2030. In assessing RPI and CPI inflation from investment market data, allowance has been made for alignment of RPI
with CPIH from 2030 and, therefore, effectively no gap between RPI and CPI inflation from that date. CPI inflation before 2030 is
assumed to be 1 per cent per annum below RPI inflation.
b Revenue recognition
At 31 December 2023 the Group recognised €8,023 million (2022: €7,644 million) in respect of deferred revenue of which €2,712
million (2022: €2,630 million) related to customer loyalty programmes. Further information on deferred revenue is included in note
24.
Passenger revenue
Passenger revenue is recognised when the transportation service is provided. At the time of intended transportation, revenue is also
recognised in respect of estimated unused tickets breakage and is estimated based on the terms and conditions of the tickets and
historical experience. The Group considers that there is no reasonably possible change to unused ticket assumptions that would
have a material impact on passenger revenue recorded in the year. A 2 percentage point increase in the level of unused ticket
breakage of the sales in advance of carriage balance (excluding vouchers) at 31 December 2023 would result in an adjustment to
Deferred revenue of €93 million, with an offsetting adjustment to increase revenue and operating profit recognised in the year.
For details regarding the voucher liability at 31 December 2023 and the associated sensitivity, see note 24.
Customer loyalty schemes
Revenue associated with the issuance of Avios under customer loyalty programmes is based on the relative standalone selling prices
of the related performance obligations (brand, marketing and Avios), determined using estimation techniques. The transaction price
of brand and marketing services is determined using specific brand valuation methodologies. The transaction price of an Avios is
determined as the price of the rewards against which they can be redeemed and is reduced to take account of the proportion of
Avios that are not expected to be redeemed by customers.
During 2022, 2021 and 2020, due to the significant restrictions imposed on the ability of customers to redeem Avios, as a result of
the COVID-19 pandemic, coupled with the disruption in the patterns of redemption caused by the COVID-19 pandemic, the Group
considered that the trends experienced since the start of the COVID-19 pandemic were not reflective of the long-term expected
patterns of redemption and accordingly, the Group was unable to determine with a high degree of probability that there would not
be a significant reversal of revenue in the future had it applied the redemption trends that were experienced over the period of the
pandemic. Accordingly, for the years to 31 December 2022, 31 December 2021 and 31 December 2020, the Group estimated the level
of redemption activity based on pre-COVID-19 pandemic customer behaviour.
During 2023, the Group considers historical redemption activity, including customers’ more recent behaviours following the
COVID-19 pandemic, representative of long-term behavioural trends, such that the Group considers that the risk of a significant
reversal of revenue to be sufficiently low. Accordingly, the Group has updated its estimated level of redemption activity to
incorporate current customer behaviour.
The Group estimates the number of Avios not expected to be redeemed using statistical modelling based on historical experience
and expected future trends in customer behaviour. A 5 percentage point increase in the assumption of Avios not expected to be
redeemed would result in an adjustment to Deferred revenue of €94 million, with an offsetting adjustment to increase revenue and
operating profit recognised in the year.
21

Unredeemed vouchers liability
Historically, where a voucher has been issued to a customer in the event of a flight cancellation, the Group estimated, based on
historical experience, the level of such vouchers not expected to be used prior to expiry and recognised revenue accordingly. During
2020 and 2021, due to the significant level of flight cancellations arising from the COVID-19 pandemic, the Group issued a greater
volume of vouchers than it would have otherwise done. In addition, given the uncertainty as to the timing of customers redeeming
these vouchers, the Group was unable to estimate with a high degree of probability that there would not be a significant reversal of
revenue in the future had it applied the historical expiry trends over the period of the pandemic. Accordingly, for the years to 31
December 2022, 31 December 2021 and 31 December 2020, the Group did not recognise revenue arising from those vouchers issued
due to COVID-19 pandemic-related cancellations until either the voucher was redeemed or it expired.
During 2023, the Group considers historical redemption activity, including customers’ more recent behaviours following the
COVID-19 pandemic, representative of the redemption trends expected through to expiry of the vouchers, such that the Group
considers that the risk of a significant reversal of revenue to be sufficiently low. Accordingly, the Group has updated its estimated
level of redemption activity to incorporate current customer behaviour.
c Income taxes
At 31 December 2023, the Group recognised €1,202 million in respect of deferred tax assets (2022: €1,282 million). Further
information on current and deferred tax is disclosed in note 10.
The Group is subject to income taxes in numerous jurisdictions. Estimates are required in determining the worldwide provision for
income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain because it may be
unclear how tax law applies to a particular transaction or circumstance. Where the Group determines that it is more likely than not
that the tax authorities would accept the position taken in the tax return, amounts are recognised in the financial statements on that
basis. Where the amount of tax payable or recoverable is uncertain, the Group recognises a liability based on either: the Group’s
judgement of the most likely outcome; or, when there is a wide range of possible outcomes, a probability-weighted average
approach.
The Group recognises deferred tax assets only to the extent that it is probable that the taxable profit will be available against which
the deductible temporary differences, carried forward tax credits or tax losses can be utilised. Management uses judgement,
including the consideration of past and current operating performance and the future projections of performance laid out in the
approved business plan in order to assess the probability of recoverability.
In exercising this judgement, while there are no time restrictions on the utilisation of historic tax losses in the principal jurisdictions in
which the Group operates, future cash flow projections are forecast for a period of up to ten years from the balance sheet date,
which represents the period over which it is probable that future taxable profits will be available.
At 31 December 2023, the Group had unrecognised deferred tax assets of €1,584 million relating to tax losses and other temporary
differences the Group does not reasonably expect to utilise. In applying the aforementioned judgement, had the Group extended the
period of future cash flow projections indefinitely, then the amount of unrecognised tax losses would have reduced by €575 million.
Conversely, if the forecast profit before tax for each operating company was reduced by 2 percentage points over the forecast
period, the amount of the unrecognised tax losses would increase by €12 million.
d Impairment of non-financial assets
At 31 December 2023 the Group recognised €2,428 million (2022: €2,423 million) in respect of intangible assets with an indefinite
life, including goodwill. Further information on these assets is included in note 17.
Goodwill and intangible assets with indefinite economic lives are tested, as part of the cash-generating units to which they relate, for
impairment annually and at other times when such indicators exist. The recoverable amounts of cash-generating units have been
determined based on value-in-use calculations, which use a weighted average multi-scenario discounted cash flow model, which are
then compared to the carrying amount of the associated cash-generating unit.
In determining the carrying value of each cash generating unit (CGU), the Group allocates all associated operating tangible and
intangible assets, including ROU assets. In addition, the Group has allocated certain liabilities to the carrying value of each CGU
where those liabilities are critical to the underlying operations of the cash-generating unit and in the event of a disposal of the cash-
generating unit would be required to be transferred to the purchaser. Such liabilities include lease liabilities.
The Group has applied judgement in the weighting of each scenario in the discounted cash flow model and these calculations require
the use of estimates in the determination of key assumptions and sensitivities as disclosed in notes 4 and 17.
The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. When such
indicators are identified, then non-financial assets are tested for impairment.
22

2 Significant accounting policies continued
e Engineering and other aircraft costs
At 31 December 2023 the Group recognised €2,529 million in respect of maintenance, restoration and handback provisions,
principally in respect of leased aircraft (2022: €2,400 million). Information on movements on the provision is disclosed in note 27.
IFRS 16 does not address the accounting for maintenance, restoration and handback provisions that arise through the usage of the
underlying asset and accordingly, the Group has applied judgement in applying an accounting policy with regard to the recognition
and subsequent measurement of such provisions for leased aircraft. The Group’s accounting policy for provisions that arise through
usage or through the passage of time, is to recognise the associated estimated costs in the Income statement as the underlying
asset is used or through the passage of time. The approach applied by the Group is consistent with the majority of major airlines that
prepare their financial statements under IFRS. Were the Group to apply an alternative accounting policy, the financial impact would
be materially different at the reporting date. An alternative accounting policy that the Group could have applied was the
components approach, where the Group would capitalise the estimated costs of major maintenance events and depreciating them
until the subsequent maintenance event (or to the end of lease term) and providing over the lease term for any expected cash
compensation for maintenance obligations at the end of the lease. The Group considers that the current accounting policy for
maintenance, restoration and handback activities reflects the obligations under its lease arrangements.
The Group has a number of contracts with service providers to replace or repair engine parts and for other maintenance checks.
These agreements are complex and generally cover a number of years. Provisions for maintenance, restoration and handback are
made based on the best estimate of the likely committed cash outflow. In determining this best estimate, the Group applies
significant judgement as to the level of forecast costs expected to be incurred when the major maintenance event occurs. Other
assumptions not considered to be significant include aircraft utilisation, expected maintenance intervals and the aircraft’s condition.
The associated forecast costs are discounted to their present value. While the Group considers that there are no reasonably possible
change to any of the individual assumptions that would have a material impact on the provisions, a combination of changes in
several assumptions may. The Group considers that a reasonably possible change in the inflation rate and discount rate assumptions
of a 100 basis points increase would give rise to an increase of €53 million (2022: €51 million) and a decrease of €59 million (2022:
€68 million), respectively, when applied in isolation to one another.
Judgements
a Determining the lease term of contracts with renewal and termination options
The Group determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to
extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is
reasonably certain not to be exercised. The Group applies judgement in evaluating whether it is reasonably certain whether or not to
exercise the option to renew or terminate the lease. Such judgement includes consideration of fleet plans which underpin approved
business plans and historical experience regarding the extension of leases. After the commencement date, the Group re-assesses the
lease term if there is a significant event or change in circumstances that affects the Group’s ability to exercise or not to exercise the
option to renew or to terminate. Further information is given in note 14.
b Determining whether the Group has significant influence over Air Europa Holdings
The Group applies judgement in the determination as to whether it has the power with which to participate in the decision-making
of, and as a result significant influence over, Air Europa Holdings, S.L. (Air Europa Holdings). Such judgement includes the
consideration as to the ability of the Group to: have representation on the board of Air Europa Holdings; participate in the policy-
making processes, including participation in decisions regarding dividends and other distributions; the existence of material
transactions between Air Europa Holdings and the Group; and enable the interchange of management personnel and provide
essential technical information.
In forming its judgement, the Group notes that: it does not have the ability to have representation on the board of Air Europa
Holdings; it does not have the ability to participate in the policy-making processes; has not entered into material transactions outside
of the normal course of business, with those transactions arising in the normal course of business being immaterial in nature; it does
not have the ability to enable the interchange of management personnel; and it does not have the ability to provide essential
technical information. The Group has therefore concluded that it does not have significant influence over Air Europa Holdings.
Accordingly, the Group accounts for its shareholding in Air Europa Holdings as an Other equity investment and measures it at fair
value through Other comprehensive income. Had the Group concluded that it does have significant influence over Air Europa
Holdings, then the shareholding would have been classified as an associate, measured at cost on inception and subsequently
measured using the equity method.
At 31 December 2023, the fair value of its shareholding in Air Europa Holdings was €129 million. Further information is given in note 19.
c Determining whether the HMRC enquiries into the IAG Loyalty VAT accounting gives rise to a provision or a contingent liability
The Group applies judgement in the determination as to whether it considers the outcome of the enquiries between IAG Loyalty and
His Majesty’s Revenue and Customs (HMRC), in the UK, on the IAG Loyalty VAT accounting, is more probable than not to result in an
adverse outcome to the Group, and accordingly whether to record the matter as a provision or as a contingent liability.
In forming its judgement, the Group, with its legal and tax advisors, have reviewed the emerging view issued by HMRC, as well has
having considered the historic tax ruling issued by HMRC to the Group on this matter. As a result, the Group does not consider it
probable that an adverse outcome will eventuate and accordingly no provision has been recorded at 31 December 2023 and the
matter has been disclosed as a contingent liability.
Had the Group, with its legal and tax advisors, considered that it was more probable than not that an adverse outcome would
eventuate, then the Group would have recognised a provision for the best estimate of the potential outflow of economic benefit to
the Group, with a corresponding charge recorded within the Income statement. Further information is given in note 10g.
23

New standards, amendments and interpretations
The following amendments and interpretations apply for the first time in 2023, but do not have a material impact on the
consolidated financial statements of the Group:
• IFRS 17 Insurance contracts – effective for periods beginning on or after 1 January 2023;
• definition of accounting estimate – amendments to IAS 8 effective for periods beginning on or after 1 January 2023;
• disclosure of accounting policies – amendments to IAS 1 and IFRS Practice statement 2 effective for periods beginning on or after 1
January 2023;
• deferred tax related to assets and liabilities arising from a single transaction – amendments to IAS 12 effective for periods
beginning on or after 1 January 2023; and
• international tax reform: Pillar Two model reforms – amendments to IAS 12 effective for periods beginning on or after 1 January
2023.
The IASB and IFRIC have issued the following standards, amendments and interpretations with an effective date after the year end
of these financial statements which management believe could impact the Group in future periods. The Group has assessed the
impact of these standards, amendments and interpretations and it is not expected that these will have a material effect on the
reported income or net assets of the Group unless otherwise stated. The Group plans to adopt the following standards,
interpretations and amendments on the date they become mandatory:
• disclosures: Supplier Finance Arrangements – amendments to IAS 7 and IFRS 7 effective for periods beginning on or after 1
January 2024;
• lease liability in a sale and leaseback – amendments to IFRS 16 effective for periods beginning on or after 1 January 2024; and
• on 31 October 2022, the IASB issued the amendments to IAS 1 – classification of liabilities as current or non-current (the
‘Amendments’), effective for periods beginning on or after 1 January 2024. The Amendments will require the €825 million
convertible bond that matures in 2028, which as at 31 December 2023, had a carrying value of €735 million, to be reclassified from
a non-current liability to a current liability with the comparative presentation as at 31 December 2022 also reclassified. The
Amendments require that where the conversion feature of a convertible instrument does not meet the recognition criteria for
separate presentation within equity and where the associated bond holders have the irrevocable right to exercise the conversion
feature within 12 months of the balance sheet date, that such convertible instruments be presented as current. Other than this
reclassification, the Amendments will not have a material effect on the reported results or net assets of the Group.
3 Significant changes and transactions in the current reporting period
The financial performance and position of the Group was affected by the following significant events and transactions in the year to
31 December 2023 as detailed below:
• on 23 February 2023, the Group entered into an agreement to acquire the remaining 80 per cent of the share capital of Air Europa
Holdings that it had not previously owned. On successful completion of the transaction, 54,064,575 ordinary shares of the
Company (which represented €100 million at the date of the agreement) will be transferred to and €100 million in cash will be paid
to Globalia, with a further €100 million paid on both the first and second anniversary of completion.
In addition, the Group has agreed to pay a break-fee to Globalia of €50 million should: (i) the relevant approvals, detailed below,
not be forthcoming within 24 months of entering into the agreement; or (ii) the Group terminates the agreement at any time prior
to completion. Under the agreement, this 24-month period can be extended, by mutual consent. The acquisition is conditional on
Globalia receiving approval from the syndicated banks that provide the loan agreements that are partially guaranteed by the
Instituto de Crédito Oficial (ICO) and Sociedad Estatal de Participaciones Industriales (SEPI) in Spain. The acquisition is also subject
to approval by relevant competition authorities. Until the completion of these approvals, the acquisition does not meet the
recognition criteria under IFRS 3 Business combinations, and no accounting has been made for the transaction in these
consolidated financial statements;
• on 4 March 2023, Aer Lingus repaid in full the €50 million of the financial arrangement with the Ireland Strategic Investment Fund
(ISIF). At 31 December 2023, €350 million of undrawn facilities remain available for draw down;
• in May 2023, the Group announced its intention to carry out a share purchase programme in order to acquire approximately 50
per cent of the aforementioned ordinary shares required as part of the acquisition of Air Europa Holdings. The programme
completed during the year to 31 December 2023, with the Group having purchased 27 million treasury shares amounting to €49
million;
• on 30 June 2023, the Group converted 10 Airbus A320neo options into firm orders. The aircraft will be delivered in 2028 and will
be used by any of the Group's airlines to replace A320ceo family aircraft;
• on 4 July 2023, the Group redeemed upon maturity the senior unsecured €500 million fixed rate bond;
• on 27 July 2023, the Group announced that it had converted six Boeing 787-10 options held by British Airways into firm orders and
at the same time is adding a further six 787-10 options to its long-haul order book. The Group also converted one Airbus
A350-900 option held by Iberia into a firm order. These aircraft will be delivered in 2025 and 2026 and will be used by British
Airways and Iberia to restore capacity in the airlines’ long-haul fleets;
• on 23 August 2023, the Group extended the terms of $1.655 billion of the $1.755 billion Revolving Credit Facility available to British
Airways, Iberia and Aer Lingus by an additional 12 months through to March 2026 with the remaining $100 million available
through to March 2025. At 31 December 2023, the Revolving Credit Facility remains undrawn;
• on 28 September 2023, British Airways repaid its syndicated loan of £2.0 billion (€2.3 billion), which was partially guaranteed by
the UK Export Finance (UKEF). At the same time, British Airways entered into a new five-year Export Development Guarantee
Facility of £1.0 billion (€1.2 billion), with commitments from a syndicate of banks, partially guaranteed by the UKEF, and available
through to September 2028. The new facility is in addition to the £1.0 billion Export Development Guarantee Facility, which was
entered into in 2021 and which is available through to November 2026. Both facilities were undrawn at 31 December 2023;
• on 31 October 2023 Iberia repaid the remaining outstanding €644 million of the €750 million floating rate syndicated financing
agreement, partially guaranteed by the Instituto de Crédito Oficial (ICO) in Spain;
• on 15 November 2023, Iberia early repaid other loans and borrowings of €42 million; and
• on 30 November 2023, Vueling repaid the remaining outstanding €223 million of the €260 million floating rate syndicated
financing agreement, partially guaranteed by ICO.
24

4 Impact of climate change on financial reporting
Significant transactions and critical accounting estimates, assumptions and judgements in the determination of the impact of
climate change
As a result of climate change the Group has designed and approved its Flightpath Net Zero climate strategy, which commits the
Group to net zero emissions by 2050. While approved business plans currently have a duration of three years, the Flightpath Net
Zero climate strategy impacts both the short-, medium- and long-term operations of the Group.
The details regarding the inputs and assumptions used in the determination of the Flightpath Net Zero climate strategy include, but
are not limited to, the following that are within the control of the Group:
• the additional cost of the Group’s commitment to increasing the level of Sustainable Aviation Fuels (SAF) to 10 per cent by 2030
and to 70 per cent by 2050;
• the cost of incurring an increase in the level of carbon offsetting and carbon capture schemes; and
• the impact of introducing more fuel-efficient aircraft and being able to operate these more efficiently.
In addition to these inputs and measures within the control of management, Flightpath Net Zero includes assumptions pertaining to
consumers, governments and regulators regarding the following:
• the impact on passenger demand for air travel as a result of both passenger trends regarding climate change and government
policies;
• investment and policy regarding the development of SAF production facilities;
• investment and improvements in air traffic management; and
• the price of carbon through the EU, Swiss and UK Emissions Trading Schemes (ETS) and the UN Carbon Offsetting and Reduction
Scheme for International Aviation (CORSIA).
The level of uncertainty regarding the impact of these factors increases over time. Accordingly, the Group has applied critical
estimation and judgement in the evaluation of the impact of climate change regarding the recognition and measurement of assets
and liabilities within the financial statements.
Critical accounting estimates, assumptions and judgements – cash flow forecast estimation
With the Flightpath Net Zero climate strategy assessing the impact over a long-term horizon to 2050, the level of estimation
uncertainty in the determination of cash flow forecasts increases over time. For those assets and liabilities, where their recoverability
is dependent on long-term cash flows, the following critical accounting estimates, assumptions and judgements, to the extent they
can be reliably measured, have been applied:
a Long-term fleet plans and useful economic lives
The Group’s Flightpath Net Zero climate strategy has been developed in conjunction with the long-term fleet plans of each
operating company. This includes the annual assessment of useful lives and the residual values of each aircraft type.
As a result of the impact of the COVID-19 pandemic, the Group retired 72 aircraft, their associated engines and rotable inventories.
These retired aircraft were older generation aircraft, that were less fuel-efficient, more carbon-intensive and more expensive to
operate than more modern models.
Subsequent to the retirement of these aircraft, coupled with the future committed delivery of 178 fuel-efficient aircraft as detailed in
note 15, the Group considers the existing fleet assets align with the long-term fleet plans to achieve its Flightpath Net Zero climate
strategy. All aircraft in the fleet, and those due to be delivered in the future, have the capability to utilise SAF in their operations
without impediment. Accordingly, no impairment has arisen in the current or prior year, nor have the useful lives and residual values
of aircraft been amended, as a result of the Group’s decarbonisation plans.
b Impairment testing of the Group’s cash generating units
The Group applies discounted cash flow models, for each cash generating unit, derived from the cash flow forecasts from the
approved three-year business plans. The Group’s Flightpath Net Zero climate strategy is long term in nature and includes
commitments that will occur at differing points over this time horizon. To the extent that certain of those commitments occur over
the short term, then they have been incorporated into the three-year business plans.
The Group adjusts the final year (being the third year) of these probability-weighted cash flows to incorporate the impacts of
climate change from the Group’s Flightpath Net Zero climate strategy that are expected to occur over the medium term, being to
2030. These adjustments are limited to those that: (i) the Group can reliably estimate at the reporting date, with those costs
subsequent to 2030 having such a high degree of uncertainty that they cannot be reliably estimated; (ii) only relate to the Group’s
existing asset base in its current condition; and (iii) incorporate legislation and regulation that is expected to be required to achieve
the Group’s Flightpath Net Zero climate strategy, and which is sufficiently progressed at the reporting date.
As a result, the Group’s impairment modelling incorporates the following aspects of the Group’s Flightpath Net Zero climate strategy
through to 2030, after which time the level of uncertainty regarding timing and costing becomes insufficiently reliable to estimate:
(i) an increase in the level of SAF consumption to 10 per cent of the overall fuel mix; (ii) forecast cost of carbon, including SAF, ETS
allowances and CORSIA allowances (all derived from externally sourced or derived information); (iii) the removal of existing free ETS
allowances issued by the EU member states, Switzerland and the UK; (iv) forecast kerosene taxes applied to jet fuel for all intra EU
flight activity; and (v) assumptions regarding the ability of the Group to recover these incremental costs through increased ticket
pricing.
25

In preparing the impairment models, the Group cash flow projections are prepared on the basis of using the current fleet in its
current condition. The Group excludes the estimated cash flows expected to arise from future restructuring unless already
committed and assets not currently in use by the Group. In addition, for the avoidance of doubt, the Group’s impairment modelling
excludes the following aspects of the Group’s Flightpath Net Zero climate strategy: (i) the expected transition to electric and
hydrogen aircraft, as well as future technological developments to jet engines and airframes; (ii) any savings from the transition to
more fuel-efficient aircraft other than those either in the Group’s fleet or those committed orders due to be delivered over the
business plan period; (iii) the benefit of the development of carbon capture technologies and enhanced carbon offsetting
mechanisms; (iv) the required beneficial reforms to air traffic management regulation and legislation; and (v) the required
government incentives and/or support across the supply chain.
As detailed in note 17, the Group applies a long-term growth rate to these adjusted probability weighted cash flows, per CGU, and
each of the long-term growth rates include a specific adjustment to reduce the rate to reflect the Group’s assumptions regarding the
reduced demand and elasticity impact arising from climate change. These impacts are derived with reference to external market
data, industry publications and internal analysis.
Given the inherent uncertainty associated with the impact of climate change, the Group has applied additional sensitivities in note 17
to reflect a more adverse impact of climate change than currently expected. This has been captured through both the downward
sensitivities of the long-term growth rates, ASKs and operating margins and the increased fuel price sensitivity.
c Valuation of employee benefit scheme assets
The Group’s employee benefit schemes are principally represented by the British Airways APS and NAPS schemes in the UK. The
schemes are structured to make post-employment payments to members over the long term, with the Trustee having established
both return-seeking assets and liability-matching assets that mature over the long term to align with the forecast benefit payments.
The assets of these schemes are invested predominantly in a diversified range of equities, bonds and property. The valuation of
these assets ranges from those with quoted prices in active markets, where prices are readily and regularly available, through to
those where the valuations are not based on observable market data, often requiring complex valuation models. The trustees of the
schemes have integrated climate change considerations into their long-term decision-making and reporting processes across all
classes of assets, actively engaging with all fund and portfolio managers to ensure that where unobservable inputs are required into
valuation models, that such valuation models incorporate long-term expectations regarding the impact of climate change.
d Recoverability of deferred tax assets
In determining the recoverable amounts of the Group’s deferred tax assets, the Group applies the future cash flow projections for a
period of up to ten years derived from the approved three-year business plans. The Group applies a medium-term growth rate
subsequent to the three-year business plans, specific to each operating company. In considering the impact of the Group’s
Flightpath Net Zero climate strategy, management adjusts this medium-term growth rate, where applicable, to incorporate the
assumed impacts on both revenue and costs to the Group.
e The price of carbon through the EU, Swiss and UK Emissions Trading Schemes
The EU, Swiss and the UK’s ETS were established to reduce greenhouse gas emissions cost effectively. Under these schemes,
companies, including the Group’s companies, are required to buy emission allowances, or are issued them under existing quotas. The
Group is required to surrender these allowances to the relevant authorities annually dependent on the level of CO
2
equivalent
emitted within a 12-month period. Over time, the level of available emission allowances decreases in order to reduce total emissions,
which has the effect of increasing the price of such allowances. The Group expects that the future price of such allowances will
continue to increase and that the free allocation of emission allowances will cease. Given the relative illiquid nature of the emission
allowance market there is uncertainty as to the future pricing of such allowances.
As detailed in note 2, the Group accounts for the purchase of allowances as an addition to Intangible assets, which are measured at
amortised cost. In addition, as the Group emits CO
2
equivalent as part of its flight operations, a provision is recorded to settle the
obligation. As the provision is recognised, a corresponding amount is recorded in the Income statement within Fuel, oil costs and
emission charges. For emissions for which the Group has already purchased allowances, the provision is valued at the weighted cost
of those allowances. Where the level of emissions exceeds the amounts of allowances held, this deficit is measured at the market
price of such allowances at the reporting date.
For the year to, and as at, 31 December 2023, the Group has recorded the following within the financial statements:
• additions to the ETS allowance provision and accordingly an expense within Fuel, oil costs and emission charges, of €238 million
(see note 27);
• purchases of ETS allowances recorded as additions to intangible assets of €264 million (see note 17);
• total ETS allowances at the reporting date recorded within intangible assets of €577 million (see note 17); and
• commitments for forward purchase agreements for ETS allowances of €216 million (see note 15).
At 31 December 2023, the Group has acquired and committed to acquire at fixed prices, the following percentages of its total
emissions allowances forecast to be purchased over the business plan period to 31 December 2026:
26

5 Segment information
a Business segments
The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments,
and has been identified as the IAG Management Committee (IAG MC).
The Group has a number of entities which are managed as individual operating companies including airline, loyalty and platform
functions. Each operating company operates its network operations as a single business unit and the IAG MC assesses performance
based on measures including operating profit, and makes resource allocation decisions for the operating companies based on
profitability, primarily by reference to the passenger markets in which the companies operate. The objective in making resource
allocation decisions is to optimise consolidated financial results.
The Group has determined its operating segments based on the way that it treats its businesses and the manner in which resource
allocation decisions are made. British Airways, Iberia, Vueling, Aer Lingus and IAG Loyalty have been identified for financial reporting
purposes as reportable operating segments. LEVEL is also an operating segment but does not exceed the quantitative thresholds to
be reportable and management has concluded that there are currently no other reasons why LEVEL should be separately disclosed.
There are varying levels of transactions between operating segments, which principally relate to the provision of maintenance
services from the Iberia operating segment to the other operating segments, the provision of flight services by the airlines to the IAG
Loyalty segment and the provision of loyalty services from IAG Loyalty to the airline operating segments.
The platform functions of the business primarily support the airline and loyalty operations. These activities are not considered to be
reportable operating segments as they either earn revenues incidental to the activities of the Group and resource allocation
decisions are made based on the passenger business or are not reviewed regularly by the IAG MC and are included within Other
Group companies.
For the year to 31 December 2023
Airways
Iberia
Vueling
14,204
5,215
3,180
2,194
679
338
25,810
862
233
–
55
–
6
1,156
962
986
17
10
512
–
2,487
16,028
6,434
3,197
2,259
1,191
344
29,453
431
524
1
15
294
392
1,657
16,459
6,958
3,198
2,274
1,485
736
31,110
(1,168)
(409)
(259)
(150)
(11)
(66)
(2,063)
Operating profit/(loss)
1,650
940
396
225
321
(25)
3,507
22,255
9,454
3,049
1,999
3,786
(2,863)
37,680
(19,295)
(8,390)
(3,461)
(1,856)
(3,115)
1,715
(34,402)
1
1 Includes eliminations on total assets of €16,268 million and total liabilities of €5,417 million.
27

For the year to 31 December 2022
Airways
Iberia
Vueling
Aer Lingus
10,523
4,002
2,584
1,665
451
233
19,458
1,239
284
–
80
–
12
1,615
848
799
14
10
322
–
1,993
12,610
5,085
2,598
1,755
773
245
23,066
311
426
–
14
228
378
1,357
12,921
5,511
2,598
1,769
1,001
623
24,423
(1,272)
(371)
(222)
(146)
(8)
(59)
(2,078)
–
–
8
–
–
–
8
366
389
195
57
282
(11)
1,278
23
–
8
–
–
–
31
343
389
187
57
282
(11)
1,247
23,788
9,200
3,177
1,946
3,303
(2,111)
39,303
(20,975)
(9,005)
(3,774)
(1,942)
(2,914)
1,329
(37,281)
2
1
3
1
1 Segment information for 2022 has been restated for the reclassification to conform with the current year presentation for the Net gain on sale of
property, plant and equipment. Further information is given in note 2.
2 Includes eliminations on total assets of €16,159 million and total liabilities of €5,755 million.
3 For details on exceptional items refer to the Alternative performance measures section.
b Other revenue
€ million
2023
2022
Holiday and hotel services
938
Maintenance and overhaul services
683
Brand and marketing
347
Ground handling services
195
Other
324
1
1 For the year to 31 December 2023, the Group has elected to provide a disaggregated breakdown of the Income statement caption ‘Other revenue’
and has accordingly provided figures for the comparative year to 31 December 2022.
28

5 Segment information continued
c Geographical analysis
Revenue by area of original sale
€ million
2023
2022
UK
10,177
Spain
5,234
USA
5,069
Rest of world
8,973
Assets by area
31 December 2023
12,764
1,685
5,644
1,569
100
18
1,268
637
19,776
3,909
31 December 2022
12,026
1,490
5,082
1,462
47
9
1,191
595
18,346
3,556
6 Operating expenses
a Expenses by nature – Operating result is arrived at after charging
Depreciation, amortisation and impairment of non-current assets:
€ million
2023
2022
1,077
1,092
768
748
–
(29)
193
218
–
(8)
25
49
2,063
2,070
1
1 Included in the depreciation charge for 2022, not included within note 13 is a credit of €29 million relating to the de-designation of hedge accounting
that had been applied to mitigate the foreign currency exposure on aircraft purchases.
€ million
2023
2022
1,165
749
29

b Property, IT and other costs
€ million
2023
2022
365
340
296
293
397
317
1,058
950
1
1 For the year to 31 December 2023, the Group has elected to provide a disaggregated breakdown of the Income statement caption ‘Property, IT and
other costs’ and has accordingly provided figures for the comparative year to 31 December 2022.
7 Auditor’s remuneration
The fees for the years to 31 December 2023 and 31 December 2022, for audit and non-audit services provided by the auditor of the
Group’s consolidated financial statements and of certain individual financial statements of the consolidated companies, KPMG
Auditores S.L., and by companies belonging to KPMG’s network, were as follows:
€’000
2023
2022
6,929
6,378
1,284
985
218
195
1,589
1,644
–
1,022
10,020
10,224
Fees payable to the Group’s auditor for the audit of the Group’s pension scheme during the year total €251 thousand (2022: €236
thousand).
8 Employee costs and numbers
€ million
2023
2022
3,711
3,207
604
519
297
272
52
39
759
610
5,423
4,647
1
1 Other employee costs include allowances and accommodation for crew.
The number of employees during the year and at 31 December was as follows:
2023
2022
31 December 2023
31 December 2022
23,473
24,004
19,801
22,278
70 %
8,085
8,223
7
%
7,340
7,864
7
%
16,395
16,784
13,798
15,087
38 %
14,774
15,586
11,741
13,819
49 %
6,813
6,972
8
%
6,908
6,775
8
%
222
225
212
221
34 %
69,762
71,794
59,800
66,044
44 %
2
1
2
1 In 2022, the average number of employees excludes those employees who were on furlough, wage support and equivalent schemes, including the
Temporary Redundancy Plan arrangements in Spain; the total average number of employees including these schemes was 61,192.
2 The number of employees is based on actual headcount at 31 December.
30

9 Finance costs, income and other non-operating credits
a Finance costs
€ million
2023
2022
(237)
(191)
(170)
(107)
(508)
(464)
(63)
(83)
(103)
(43)
(42)
(102)
28
11
(18)
(38)
(1,113)
(1,017)
b Finance income
€ million
2023
2022
386
51
–
1
386
52
c Net change in fair value of financial instruments
€ million
2023
2022
(11)
159
–
(35)
–
(43)
(11)
81
d Net financing credit relating to pensions
€ million
2023
2022
Net financing credit relating to pensions
103
26
e Other non-operating credits
€ million
2023
2022
10
–
3
(3)
6
5
(23)
190
13
(82)
(1)
–
8
110
1
1 The 2022 Other non-operating credits include a reclassification to conform with the current year presentation of the Income statement. See note 2
for further details.
31

10 Tax
a Tax (charges)/credits
Tax (charges)/credits recognised in the Income statement, Other comprehensive income and directly in equity:
2023
2022
equity
Total
equity
Total
Movement in respect of
prior years
(1)
–
–
(1)
(6)
–
–
(6)
Movement in respect of
current year
(206)
8
–
(198)
(64)
3
–
(61)
Total current tax
(207)
8
–
(199)
(70)
3
–
(67)
Movement in respect of
prior years
(10)
(2)
12
–
(36)
(2)
–
(38)
Movement in respect of
current year
(171)
106
(17)
(82)
105
(60)
5
50
differences
(13)
3
–
(10)
17
(10)
–
7
Total deferred tax
(194)
107
(5)
(92)
86
(72)
5
19
Total tax
(401)
115
(5)
(291)
16
(69)
5
(48)
The current tax credit in Other comprehensive income relates to movements relating to employee benefit plans of €8 million (2022:
€1 million) and to the fair value movements on the IAG €825 million convertible bond maturing in 2028 of €nil (2022: €2 million).
Tax recognised directly in equity of a €5 million charge (2022: €5 million credit) relates to cash flow hedges.
Within tax in Other comprehensive income is a tax credit of €114 million (2022: tax credit of €8 million) that may be reclassified to
the Income statement and a tax credit of €1 million (2022: tax charge of €77 million) that will not.
b Current tax asset
€ million
2023
2022
64
(5)
(207)
(70)
8
3
Cash
291
Exchange movements and other
1
157
64
159
72
(2)
(8)
157
64
32

10 Tax continued
c Deferred tax (liability)/asset
losses
1
differences
Total
Balance at 1 January 2023
(680)
(44)
9
197
54
(3)
17
1,636
96
1,282
Income statement
(325)
68
(2)
11
(1)
–
9
78
(32)
(194)
Other comprehensive income
–
–
–
6
(8)
114
–
(3)
(2)
107
Recognised directly in equity
–
–
–
–
–
(5)
–
–
–
(5)
Exchange movements and
other
(8)
–
–
–
–
15
–
10
(9)
8
Balance at 31 December 2023
(1,013)
24
7
214
45
121
26
1,721
53
1,198
Balance at 1 January 2022
(477)
(220)
19
196
62
57
11
1,573
61
1,282
Income statement
(194)
169
(9)
19
1
–
6
87
7
86
Other comprehensive income
–
–
–
(17)
(12)
(46)
–
3
–
(72)
Recognised directly in equity
–
–
–
–
–
5
–
–
–
5
Exchange movements and
other
(9)
7
(1)
(1)
3
(19)
–
(27)
28
(19)
Balance at 31 December 2022
(680)
(44)
9
197
54
(3)
17
1,636
96
1,282
1 Fair value gains/losses include both the Cash flow hedge reserve and the Cost of hedging reserve, of which the movement in relation to Other
comprehensive income recognised in the Cash flow hedge reserve for 2023 was €104 million (2022: €68 million, see note 30d).
€ million
2023
2022
The deferred tax assets mainly arise in Spain and the UK and are expected to reverse in full beyond one year. Recognition of the
deferred tax assets is supported by the expected reversal of deferred tax liabilities in corresponding periods, and projections of
operating performance laid out in the management approved business plans.
d Reconciliation of the total tax charge in the Income statement
The tax (charge)/credit is calculated at the domestic rates applicable to profits/(losses) in the country in which the profits/(losses)
arise. The differences between the expected tax charge (2022: charge) and the actual tax charge (2022: credit) on the profit for the
year to 31 December 2023 (2022: profit) are explained below:
€ million
2023
2022
Accounting profit before tax
3,056
(718)
(102)
11
(2)
30
–
(13)
17
289
153
3
5
(11)
(42)
22
3
(21)
(22)
7
6
(401)
16
1
1 The expected tax charge is calculated by aggregating the expected tax (charges)/credits arising in each company in the Group and changes each
year as tax rates and profit mix change. The 2023 corporate tax rates for the Group’s main countries of operation are Spain 25% (2022: 25%), the UK
23.5% (2022: 19%) and Ireland 12.5% (2022: 12.5%).
33

e Payroll related taxes and UK Air Passenger Duty
The Group was also subject to other taxes paid during the year which are as follows:
€ million
2023
2022
604
522
936
722
1,540
1,244
f Factors that may affect future tax charges
Unrecognised deductible temporary differences and losses
€ million
2023
2022
569
1,596
406
405
–
72
13
11
988
2,084
238
481
341
343
17
17
596
841
None of the unrecognised temporary differences have an expiry date. Further information with regard to the sensitivity of the
recoverability of deferred tax assets is given in note 2.
Revocation of Royal Decree-Law 3/2016 in Spain
On 18 January 2024, the Tribunal Constitucional (Constitutional Court) in Spain issued a ruling that the amendments to corporate
income tax introduced by Royal Decree Law 3/2016 were unconstitutional. Further details are given in note 38.
Unrecognised temporary differences – investment in subsidiaries and associates
No deferred tax liability has been recognised in respect of €1,910 million (2022: €823 million) of temporary differences relating to
subsidiaries and associates. The Group either controls the reversal of these temporary differences and it is probable that they will not
reverse in the foreseeable future or no tax consequences would arise from their reversal to a material extent.
Tax rate changes
On 3 March 2021 the UK Chancellor of the Exchequer announced that legislation would be introduced in the Finance Bill 2021 to set
the main rate of corporation tax at 25 per cent from April 2023. On 24 May 2021 the Finance Bill was substantively enacted, which
has led to the remeasurement of deferred tax balances and will increase the Group’s future current tax charge accordingly. As a
result of the remeasurement of deferred tax balances in UK entities, a charge of €13 million (2022: €17 million credit) is recorded in
the Income statement and a credit of €3 million (2022: €10 million charge) is recorded in Other comprehensive income.
Engagement with tax authorities
The Group is subject to audit and enquiry by tax authorities in the territories in which it operates, and engages with those tax
authorities in a cooperative manner.
During the course of 2023, the Directorate General of GST Intelligence (DGGI) in India has been enquiring into the quantum and
nature of any services provided by the corporate head offices of a number of international airlines, including British Airways, to their
Indian branches. As at 31 December 2023 and through to the date of these financial statements, the DGGI’s enquiries are ongoing.
Pillar Two minimum effective tax rate reform
In 2021 the OECD released the Two Pillar solution to address the tax challenges arising from the digitalisation of the economy. This
reform to the international tax system addresses the geographical allocation of profits for the purposes of taxation, and is designed
to ensure that multinational enterprises will be subject to a minimum 15 per cent effective tax rate.
On 15 December 2022, the Council of the European Union formally adopted the EU Pillar Two Directive. On 22 December 2022 the
EU Minimum Tax Directive was published.
On 11 July 2023, the UK enacted Finance (No. 2) Act 2023 which introduced the Multinational Top-up Tax and the Domestic Top-up
Tax with effect for accounting periods beginning on or after 31 December 2023. These taxes are the UK’s adoption of the income
inclusion rule and domestic minimum top-up tax rule referenced in the OECD’s Pillar Two reform.
On 18 December 2023, Ireland enacted Finance (No. 2) Act 2023 which, pursuant to the EU Minimum Tax Directive, provided for the
introduction of a new minimum effective rate of tax for certain businesses. These rules provide for a Qualified Domestic Top-Up Tax
where an in-scope group’s Irish operations have an effective rate of tax of less than 15%. They come into force for accounting periods
beginning on or after 31 December 2023.
34

10 Tax continued
On 19 December 2023, Spain’s Council of Ministers approved a draft law to implement the EU Minimum Tax Directive. This is to be
subject to consultation, prior to being sent to Parliament.
Under the legislation, the Group is liable to pay a top-up tax for the difference between the effective rate per jurisdiction and the 15
per cent minimum rate. Such legislation applies prospectively for accounting periods beginning on or after 31 December 2023.
For 2023, the predominant jurisdiction in which the Group operates with an effective tax rate of less than 15 per cent is Ireland
through Aer Lingus. While the impact of Pillar Two is not yet reasonably possible to estimate, for indicative purposes, in 2023 Aer
Lingus recorded a current tax expense of €24 million relating to its Irish operations, representing an effective tax rate of 13 per cent.
Had the effective tax rate applied by Aer Lingus to its Irish operations been 15 per cent, the current tax expense would have
increased by €4 million to €28 million, which would not have had a significant impact on the overall Group effective tax rate of 13 per
cent.
On 23 May 2023, the IASB issued the amendments to IAS 12 – international tax reform: Pillar Two model reforms, effective for
periods beginning on or after 1 January 2023. The amendments to IAS 12 provide temporary mandatory relief from the recognition of
deferred tax balances arising from the implementation of the Pillar Two legislation. Accordingly, the Group has developed an
accounting policy with regard to the recognition of deferred taxes arising from the Pillar Two model rules, where no adjustments to
deferred tax assets and liabilities are recognised that arise from the introduction of the minimum 15 per cent effective tax rate.
g Tax-related contingent liabilities
The Group has certain contingent liabilities that could be reliably estimated, across all taxes, but excluding the IAG Loyalty VAT
matter detailed below, at 31 December 2023 amounting to €110 million (31 December 2022: €110 million). While the Group does not
consider it more likely than not that there will be material losses on these matters, given the inherent uncertainty associated with tax
litigation and tax audits, there can be no guarantee that material losses will not eventuate. As the Group considers that its chances of
success in each of these matters is more probable than not, it is not appropriate to make a provision for these amounts. Included in
the tax-related contingent liabilities are the following:
Merger gain
Following tax audits covering the period 2011 to 2014, the Spanish Tax Authorities issued a corporate income tax assessment to the
Company regarding the merger in 2011 between British Airways and Iberia (the ‘Merger’). The maximum exposure in this case is €100
million (31 December 2022: €98 million), being the amount in the tax assessment with an estimate of the interest accrued on that
assessment through to 31 December 2023.
The Company appealed the assessment to the Tribunal Económico-Administrativo Central or ‘TEAC’ (Central Administrative Tax
Tribunal). On 23 October 2019, the TEAC ruled in favour of the Spanish Tax Authorities. The Company subsequently appealed this
ruling to the Audiencia Nacional (National High Court) on 20 December 2019, and on 24 July 2020 filed submissions in support of its
case. To assist it in its deliberations as to whether a gain arose from the Merger, on 15 September 2023, the Audiencia Nacional
commissioned an independent accounting expert to provide a report on the appropriate basis of accounting. As at 31 December
2023 and through to the date of these financial statements, the Audiencia Nacional has not ruled on whether a gain arose from the
Merger. The Company does not expect a hearing at the Audiencia Nacional on this case until mid to late 2024 at the earliest.
The Company disputes the technical merits of the assessment and ruling of the TEAC. Based on legal advice and an external
accounting expert’s opinion, the Company believes that it has strong arguments to support its appeal. The Company does not
consider it appropriate to make a provision for these amounts and accordingly has classified this matter as a contingent liability.
Should the Company be unsuccessful in its appeal to the Audiencia Nacional, it would re-assess its position and the associated
accounting treatment accordingly.
Within the context of the aforementioned tax audits, the Spanish tax authorities concluded on the value of Iberia’s business within
the Merger. This valuation was contested by the Company in a separate case, where no tax liability is due. The Company believes
there are technical merits for a higher value, something that would indirectly reduce the quantum of the merger gain assessed in the
dispute described above. On 18 January 2024, the Audiencia Nacional served notice on its judgment issued on 13 December 2023,
whereby it ruled in favour of the Spanish tax authorities. The Company believes there are grounds to appeal the judgement to the
Supreme Court in Spain. If an appeal on this matter was ultimately successful, it would reduce the exposure of the merger gain
described above.
IAG Loyalty VAT
At 31 December 2023, and through to the date of this report, His Majesty’s Revenue and Customs (HMRC) has issued protective
notices of VAT assessments for the 24 months ended March 2020 to Avios Group (AGL) Limited, a controlled undertaking of the
Group trading as IAG Loyalty. At the date of this report none of these protective notices of assessment are due for payment.
During the second quarter of 2023, and while its enquiries are ongoing at the date of this report, HMRC shared with the Group its
emerging view on the appropriate VAT accounting, which differs to the current approach by IAG Loyalty. HMRC’s emerging view
asserts that the charges made by IAG Loyalty are for participating/membership in the Avios scheme and the associated charges and
are subject to VAT. IAG Loyalty accounts for VAT depending on the nature of the goods or services for which Avios are redeemed,
the vast majority of which are flights, and zero-rated. IAG Loyalty’s VAT accounting has and continues to be based on a ruling issued
by HMRC.
As at the date of this report, this emerging view did not consider the validity of the rulings HMRC has previously issued with regard
to IAG Loyalty’s VAT accounting. Accordingly, and while having issued the protective notices, HMRC has not confirmed whether it
considers its emerging view to be retroactive or only prospective in nature. The Group expects further developments in this matter
during 2024, which may include HMRC issuing an update to its emerging view.
35

While the Group has continued to engage with HMRC on the underlying facts, circumstances and technical analysis of the matter, as
at the date of this report there remain a number of possible scenarios that could eventuate. The Group has reviewed HMRC’s
emerging view with its legal and tax advisors and considers it has strong arguments to support its VAT accounting, including having
received a ruling previously from HMRC on the matter, and therefore does not consider it probable that an adverse outcome will
eventuate. Accordingly, the Group does not consider it appropriate to record any provision for this case at 31 December 2023. The
Group, in conjunction with its advisors, considers the disclosure of a potential range of exposures, associated with the
aforementioned possible scenarios that could eventuate, could prejudice seriously the position of the Group in its ongoing
engagement with HMRC.
Should the Group and HMRC be unable to reach agreement on the appropriate VAT accounting, then the Group will have the ability
to advance the case by initiating legal proceedings. To enable the Group to advance to initiate legal proceedings, it will need to pay,
without admission of liability, to HMRC the total amount of assessments issued at the relevant time, which will be recoverable, in part
or in full, should the Group be successful in the case. Until HMRC further progresses its enquiries, it is not possible to determine the
payment required, if any, but any potential payment may result in a material cash outflow from the Group.
11 Earnings per share
€ million
2023
2022
2,655
431
15
(104)
2,670
327
4,932,631
4,958,420
244,851
299,557
99,093
86,175
5,276,575
5,344,152
€ cents
2023
2022
53.8
8.7
50.6
6.1
The assumed conversion of the €825 million convertible bond 2028 and outstanding employee share schemes have a dilutive impact
on the earnings per share for the years to 31 December 2023 and 31 December 2022 due to the reported profit after tax for the
respective years.
For information relating to Adjusted earnings per share refer to the Alternative performance measures section.
12 Dividends
The Directors propose that no dividend be paid for the year to 31 December 2023 (2022: €nil).
The future dividend capacity of the Group is dependent on the liquidity requirements and the distributable reserves of the Group’s
main operating companies and their capacity to pay dividends to the Company, together with the Company’s distributable reserves
and liquidity.
As at 31 December 2022, certain debt obligations placed restrictions or conditions on the payment of dividends from the Group’s
main operating companies to the Company, including a loan to British Airways partially guaranteed by the UKEF and loans to Iberia
and Vueling partially guaranteed by the Instituto de Crédito Oficial (ICO) in Spain.
As at 31 December 2023, the Group had no restrictions on the payment of dividends from the Group’s main operating companies to
the Company, other than for British Airways, which has several undrawn committed credit facilities for which the commitments
available are subject to certain conditions depending on the scale of any dividend from British Airways to the Company.
In addition, British Airways agreed with the Trustee of its main UK defined benefit pension scheme (NAPS) as part of the triennial
valuation as at 31 March 2021 that, subject to the scheme being in technical deficit, any dividends paid to IAG from 1 January 2024
through to 31 December 2024, will trigger a pension contribution of 50 per cent of the amount of the dividend. For the period of 1
January 2025 to 30 September 2025, any dividend in excess of 50 per cent of British Airways’ profit after tax will trigger a pension
contribution of 50 per cent of the amount of the dividend in excess of the 50 per cent of profit after tax. At 31 December 2023,
NAPS was in technical surplus, and any dividend that British Airways were to pay to IAG, would not trigger a payment into NAPS
unless NAPS were to move back into technical deficit. Further details on the British Airways dividend restrictions agreed with NAPS
are given in note 34a.
36

13 Property, plant and equipment
€ million
Fleet
Property
Equipment
Total
25,996
3,125
1,450
30,571
3,765
61
101
3,927
241
129
–
370
(1,700)
(406)
(120)
(2,226)
(4)
–
–
(4)
(44)
–
–
(44)
(552)
(73)
(31)
(656)
27,702
2,836
1,400
31,938
3,543
47
163
3,753
224
204
1
429
(1,360)
(35)
(40)
(1,435)
(2)
(1)
(7)
(10)
264
35
15
314
30,371
3,086
1,532
34,989
10,880
1,473
1,057
13,410
1,642
168
79
1,889
(8)
–
–
(8)
(857)
(403)
(107)
(1,367)
(25)
–
–
(25)
(247)
(32)
(28)
(307)
11,385
1,206
1,001
13,592
1,676
122
72
1,870
(331)
(34)
(34)
(399)
121
16
13
150
12,851
1,310
1,052
15,213
1
1 For details regarding the 2022 impairment reversal on fleet assets refer to the Alternative performance measures section. For details regarding the
operating segment in which the 2022 impairment reversal arose, see note 5.
17,520
1,776
480
19,776
16,317
1,630
399
18,346
€ million
Fleet
Property
Equipment
Total
8,828
907
384
10,119
7,681
838
15
8,534
914
31
79
1,024
97
–
2
99
17,520
1,776
480
19,776
7,242
833
338
8,413
7,993
684
20
8,697
1,071
113
40
1,224
11
–
1
12
16,317
1,630
399
18,346
37

The net book value of property comprises:
€ million
2023
2022
482
469
838
684
308
301
148
176
1,776
1,630
At 31 December 2023, bank and other loans of the Group are secured on owned fleet assets with a net book value of €4,736 million
(2022: €3,931 million).
14 Leases
a Amounts recognised in the Consolidated balance sheet
Property, plant and equipment includes the following amounts relating to right of use assets:
€ million
Fleet
Property
Equipment
Total
14,218
949
74
15,241
586
28
1
615
241
129
–
370
(214)
(171)
(2)
(387)
(849)
–
(24)
(873)
(232)
(24)
–
(256)
13,750
911
49
14,710
853
17
–
870
224
204
1
429
(117)
(5)
(6)
(128)
(831)
–
(1)
(832)
104
13
–
117
13,983
1,140
43
15,166
5,592
309
37
5,938
991
93
8
1,092
(8)
–
–
(8)
(191)
(170)
(1)
(362)
(528)
–
(14)
(542)
(99)
(5)
(1)
(105)
5,757
227
29
6,013
996
76
5
1,077
(117)
(4)
(6)
(127)
(380)
–
–
(380)
46
3
–
49
6,302
302
28
6,632
7,681
838
15
8,534
7,993
684
20
8,697
1
1
2
1
1
1 Amounts with a net book value of €452 million (2022: €331 million) were reclassified from ROU assets to owned Property, plant and equipment at the
cessation of the respective leases. The assets reclassified relate to leases with purchase options that were grandfathered as ROU assets upon
transition to IFRS 16, for which the Group had been depreciating over the expected useful life of the aircraft, incorporating the purchase option.
2 For details regarding the 2022 impairment reversal on fleet assets refer to the Alternative performance measures section.
38

14 Leases continued
Interest-bearing long-term borrowings includes the following amount relating to lease liabilities:
€ million
2023
2022
9,619
9,637
876
639
439
378
(2,216)
(1,886)
508
464
–
(28)
(259)
415
8,967
9,619
1,826
1,766
7,141
7,853
b Amounts recognised in the Income statement
€ million
2023
2022
1
2
24
39
508
464
(7)
1
1,077
1,092
–
(8)
c Amounts recognised in the Cash flow statement
See note 35 for details of the amounts recognised in the Cash flow statement for the years to 31 December 2023 and 31 December
2022.
The Group is exposed to future cash outflows (on an undiscounted basis) at 31 December 2023, for which an amount of €36 million
(2022: nil) has been recognised in relation to leases not yet commenced to which the Group is committed.
d Maturity profile of the lease liabilities
The maturity profile of the lease liabilities is disclosed in note 29f.
e Extension options
The Group has certain leases which contain extension options exercisable by the Group prior to the non-cancellable contract period.
Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The Group assesses
at lease commencement whether it is reasonably certain to exercise the extension options.
The Group is exposed to future cash outflows (on an undiscounted basis) at 31 December 2023, for which no amount has been
recognised, for potential extension options of €979 million (2022: €945 million) due to it not being reasonably certain that these
leases will be extended.
f Lessor accounting
The Group leases out certain of its property, plant and equipment. The Group has classified those leases that transfer substantially all
of the risks and rewards of ownership to the lessee as finance leases and those leases that do not transfer substantially all of the risks
and rewards of ownership to the lessee as operating leases.
Finance leases
Rental income from finance leases recognised by the Group in 2023 was €2 million (2022: €4 million). Rental income is recorded
within Property, IT and other within the Income statement.
39

The following table sets out a maturity analysis of finance lease receipts, showing the undiscounted lease receipts to be received
after the reporting date:
€ million
2023
2022
6
2
5
6
3
–
–
–
14
8
(1)
(1)
13
7
15 Capital expenditure commitments
Capital expenditure authorised and contracted but not provided for in the accounts, including outstanding aircraft commitments, at
31 December 2023 amounted to €12,706 million (31 December 2022: €13,749 million). The outstanding aircraft commitments
including the expected delivery timeframes, totalling €11,966 million (2022: €13,484 million), are as follows:
Aircraft future deliveries at 31 December
2023
49
45
33
46
14
14
2
7
1
5
18
18
11
7
25
25
25
25
178
192
1
1
2
1 Capital commitments exclude options to purchase additional aircraft.
2 Total deliveries excludes three Airbus A320 aircraft committed for delivery under lease agreements in 2024. For further information see note 14.
On 30 June 2023 the Group converted 10 Airbus A320neo options into firm orders. The aircraft will be delivered in 2028 and will be
used by any of the Group’s current airlines to replace A320ceo family aircraft.
On 27 July 2023, the Group converted six Boeing 787-10 options held by British Airways into firm orders and at the same time added
a further six 787-10 options to its long-haul order book. The Group also converted one Airbus A350-900 option held by Iberia into a
firm order. These aircraft will be delivered in 2025 and 2026 and will be used by British Airways and Iberia to restore capacity in the
airlines’ long-haul fleets.
The majority of these commitments are denominated in US dollars translated at the closing exchange rate at the reporting date and
include escalation clauses dependent on the timing of aircraft deliveries. Under the terms of the committed purchase agreements,
the Group is required to make periodic progress payments towards the purchase price, with the commitments above stated net of
progress payments that have been made at the reporting date.
The Group has certain rights to defer aircraft deliveries and to cancel commitments in the event of significant delays to aircraft
deliveries caused by the aircraft manufacturers. No such rights had been exercised as at 31 December 2023.
16 Non-current assets held for sale
As at 31 December 2023, there were no non-current assets held for sale.
As at 31 December 2022, the non-current assets held for sale of €19 million represented two Airbus A321 aircraft. No gain or loss was
recognised on classification as non-current assets held for sale. These aircraft were presented within the British Airways segment
and exited the business during the first half of 2023.
40

17 Intangible assets and impairment review
a Intangible assets
€ million
Goodwill
Brand
Software
ETS assets
Other
Total
596
451
253
1,605
1,674
62
87
4,728
–
–
–
14
218
360
1
593
–
–
–
(6)
(52)
(9)
–
(67)
(1)
–
–
(25)
(34)
(6)
–
(66)
595
451
253
1,588
1,806
407
88
5,188
–
–
–
–
365
264
1
630
–
–
–
(6)
(49)
(96)
–
(151)
–
–
–
–
23
–
(15)
8
1
–
–
11
18
2
–
32
596
451
253
1,593
2,163
577
74
5,707
249
–
–
142
1,032
–
66
1,489
–
–
–
6
210
–
2
218
–
–
–
–
(50)
–
–
(50)
–
–
–
(2)
(23)
–
–
(25)
249
–
–
146
1,169
–
68
1,632
–
–
–
6
185
–
2
193
–
–
–
–
(39)
–
–
(39)
–
–
–
1
11
–
–
12
249
–
–
153
1,326
–
70
1,798
347
451
253
1,440
837
577
4
3,909
346
451
253
1,442
637
407
20
3,556
1
1 The net book value includes non-UK and non-EU based landing rights of €63 million (2022: €69 million) that have a definite life. The remaining
average life of these landing rights is 12 years.
b Impairment review
The carrying amounts of intangible assets with indefinite life and goodwill allocated to cash generating units (CGUs) of the Group are:
€ million
Goodwill
Brand
–
306
–
423
729
46
–
–
794
840
–
–
–
(6)
(6)
1
–
–
10
11
47
–
–
798
845
28
35
–
94
157
272
110
–
62
444
–
–
253
–
253
347
451
253
1,377
2,428
1
41

€ million
Goodwill
Brand
–
306
–
423
729
47
–
–
809
856
–
–
–
14
14
–
–
–
(6)
(6)
(1)
–
–
(23)
(24)
46
–
–
794
840
28
35
–
94
157
272
110
–
62
444
–
–
253
–
253
346
451
253
1,373
2,423
1
1 Landing rights excludes non-UK and non-EU based landing rights of €63 million (2022: €69 million) that have a definite life.
Basis for calculating recoverable amount
The recoverable amounts of the Group’s CGUs have been measured based on their value-in-use, which utilises a weighted average multi-
scenario discounted cash flow model. The details of these scenarios are given in the going concern section of note 2, with a weighting of
70 per cent to the Base Case and 30 per cent to the Downside Case. Cash flow projections are based on the business plans approved by
the relevant operating companies covering a three-year period. Cash flows extrapolated beyond the three-year period are projected to
increase based on long-term growth rates. Cash flow projections are discounted using each CGU’s pre-tax discount rate.
Annually the relevant operating companies prepare and their respective boards approve three-year business plans, and the IAG
Board approves the Group three-year business plan in the fourth quarter of the year. Adjustments have been made to the final year
of the business plan cash flows to incorporate the impacts of climate change that the Group can reliably estimate at the reporting
date. However, given the long-term nature of the Group’s sustainability commitments, there are other aspects of these commitments
that cannot be reliably estimated and accordingly have been excluded from the value-in-use calculations (see note 4). The business
plan cash flows used in the value-in-use calculations also reflect all restructuring of the business where relevant that has been
approved by the Board and which can be executed by management under existing labour agreements.
Key assumptions
The value-in-use calculations for each CGU reflect the wider economic and geopolitical environments, including updated projected
cash flows for activity from 2024 through to the end of 2026. For each of the Group’s CGUs the key assumptions used in the value-
in-use calculations are as follows:
Airways
Iberia
Vueling
Aer Lingus
IAG Loyalty
7-14
7-14
4-12
6-14
23
3-9
4-10
1-6
2-16
n/a
Long-term growth rate
1.7
1.5
0.9
1.3
1.5
Pre-tax discount rate
11.2
12.2
14.3
10.9
14.8
1
1
Airways
Iberia
Vueling
Aer Lingus
IAG Loyalty
5-13
5-10
0-10
4-12
23-25
90-105
92-107
113-123
102-127
n/a
1.7
1.5
1.4
1.6
1.7
10.4
11.2
12.8
10.1
13.4
1
1, 2
1 Average ASK growth per annum, ASKs as a proportion of 2019 and operating margin are stated as the weighted average derived from the multi-
scenario discounted cash flow model.
2 Given the impact of the COVID-19 pandemic, in 2022 the Group presented ASKs as a proportion of the level of ASKs achieved in 2019, prior to the
application of the terminal value calculation.
42

17 Intangible assets and impairment review continued
months
1-2 years
2-3 years
895
829
800
800
867
809
780
780
Forecast ASKs in the current year modelling represent the range of average annual increases in capacity over the forecast period,
based on planned network growth and taking into account management’s expectation of the market.
The long-term growth rate is calculated for each CGU, considering a number of data points: (i) industry publications; (ii) forecast
weighted average exposure in each primary market using gross domestic product (GDP); and (iii) internal analysis regarding the
long-term changes in consumer preferences and the effects on demand from the increased costs to the Group of climate change.
The calculation of the long-term growth rate utilises a Base Case and a Downside Case growth rate, which is then weighted on the
same basis as the cash flows detailed above of 70 per cent to the Base Case and 30 per cent to the Downside Case. The terminal
value cash flows and long-term growth rate incorporate the impacts of climate change insofar as they can be determined (see note
4). The airlines’ network plans and the IAG Loyalty forecasts are reviewed annually as part of the three-year business plan
preparation and reflect management’s plans in response to specific market risk or opportunity.
Pre-tax discount rates represent the current market assessment of the risks specific to each CGU, taking into consideration the time
value of money and underlying risks of its primary market. The discount rate calculations are based on the circumstances of the
airline industry, the loyalty scheme industry, the Group and the CGU. These rates are derived from the weighted average cost of
capital (WACC). The WACC takes into consideration both debt and equity available to airlines and loyalty schemes. The cost of
equity is derived from the expected return on investment by airline and loyalty scheme investors and the cost of debt is derived
from both market data and industry gearing levels derived from comparable companies. CGU-specific risk is incorporated by
applying individual beta factors which are evaluated annually based on available market data. The pre-tax discount rate reflects the
timing of future tax flows. The Group engages an external valuation expert as at the valuation date to assist in the determination of
the post-tax discount rate.
Jet fuel price assumptions are derived from forward price curves in the fourth quarter of each year and sourced externally from
readily available market data at the valuation date. The cash flow forecasts reflect these price increases after taking into
consideration the level of fuel derivatives and their associated prices that the Group has in place and the incremental price
differentials expected for the purchase of SAF.
As detailed above, the Group adjusts the final year of the three-year business plans to incorporate the medium-term impacts of
climate change from the Group’s Flightpath Net Zero climate strategy through to 2030. These adjustments include the following key
assumptions: (i) a 10 per cent level of SAF consumption out of the overall fuel mix with an assumed price of €3,412 per metric tonne;
(ii) a kerosene tax of €526 per metric tonne on all intra-EU flights; (iii) for costs of carbon, prices of €173, €173, €110 and €19 for EU
ETS allowances, Swiss ETS allowances, UK ETS allowances and CORSIA allowances, respectively, per tonne of CO
2
equivalents
emitted; and (iv) the removal of all free ETS and CORSIA allowances.
Summary of results
At 31 December 2023 management reviewed the recoverable amount of each of the CGUs and concluded the recoverable amounts
exceeded the carrying values.
Reasonable possible changes in key assumptions, both individually and in combination, have been considered for each CGU, where
applicable, which include reducing the operating margin by 2 percentage points in each year, reducing ASKs by 5 percentage points
in each year, reducing long-term growth rates in the terminal value calculation to zero, increasing pre-tax discount rates by 2.5
percentage points and increasing the fuel price (both jet fuel and SAF) by 40 per cent, both with cost recovery consistent with that
experienced historically and with no assumed cost recovery. Given the inherent uncertainty associated with the impact of climate
change, these sensitivities represent a reasonably possible impact of climate change on the CGUs greater than that included in the
impairment models.
For the British Airways, Iberia, Vueling and Aer Lingus CGUs, while the recoverable amounts are estimated to exceed the carrying
amounts by €15,752 million, €4,736 million, €1,271 million and €1,884 million, respectively, the recoverable amounts would be below
the carrying amounts when applying reasonable possible but not probable changes, over the forecast period, in assumptions in each
of the following scenarios:
• British Airways: (i) if ASKs had been 5 per cent lower combined with a fuel price increase without cost recovery of 24 per cent;
and (ii) if the fuel price had been 29 per cent higher without cost recovery;
• Iberia: (i) if ASKs had been 5 per cent lower combined with a fuel price increase without cost recovery of 21 per cent; and (ii) if the
fuel price had been 24 per cent higher without cost recovery;
• Vueling: (i) if ASKs had been 5 per cent lower combined with a fuel price increase without cost recovery of 12 per cent; and (ii) if
the fuel price had been 18 per cent higher without cost recovery; and
• Aer Lingus: (i) if ASKs had been 5 per cent lower combined with a fuel price increase without cost recovery of 16 per cent; and (ii)
if the fuel price had been 23 per cent higher without cost recovery.
For the remainder of the reasonably possible changes in key assumptions applied to the British Airways, Iberia, Vueling and Aer
Lingus CGUs and for all the reasonably possible changes in key assumptions applied to the IAG Loyalty CGU, no impairment arises.
43

18 Investments
a Investments in subsidiaries
The Group’s subsidiaries at 31 December 2023 are listed in the Group investments section.
All subsidiary undertakings are included in the consolidation. The proportion of the voting rights in the subsidiary undertakings held
directly do not differ from the proportion of ordinary shares held. There have been no significant changes in ownership interests of
subsidiaries during the year.
The total non-controlling interest at 31 December 2023 is €6 million (2022: €6 million).
b Investments in associates and joint ventures
The share of assets, liabilities, revenue and profit of the Group’s associates and joint ventures, which are included in the Group’s
financial statements, are as follows:
€ million
2023
2022
166
148
(119)
(104)
107
89
6
5
The detail of the movement in investment in associates and joint ventures is shown as follows:
€ million
2023
2022
43
40
6
5
(2)
(2)
47
43
At 31 December 2023 there are no restrictions on the ability of associates or joint ventures to transfer funds to the parent and there
are no related contingent liabilities.
At both 31 December 2023 and 31 December 2022 the investment in Sociedad Conjunta para la Emisión y Gestión de Medios de
Pago EFC, S.A. exceeded 50 per cent ownership by the Group (50.5 per cent). The entity is treated as a joint venture as decisions
regarding its strategy and operations require the unanimous consent of the parties who share control, including IAG.
19 Other equity investments
Other equity investments include the following:
€ million
2023
2022
The credit relating to Other equity investments was €3 million (2022: charge of €3 million).
Investment in Air Europa Holdings
On 15 June 2022, the Group entered into a financing arrangement with Globalia Corporación Empresarial, S,A, (‘Globalia’), whereby,
the Group provided a €100 million seven-year unsecured loan, which was convertible for a period of two years from inception into a
fixed number of the shares of Air Europa Holdings, S.L. (‘Air Europa Holdings’), a wholly owned subsidiary of Globalia. Subsequently,
on 16 August 2022, the Group exercised its exchange option with Globalia and converted the aforementioned loan into an
investment in 20 per cent of the share capital of Air Europa Holdings, which is recorded as an Other equity investment.
On 23 February 2023, the Group entered into an agreement to acquire the remaining 80 per cent of the share capital of Air Europa
Holdings that it had not previously owned. The acquisition is conditional on Globalia receiving approval from the syndicated banks
that provide the loan agreements that are partially guaranteed by the Instituto de Crédito Oficial (ICO) and Sociedad Estatal de
Participaciones Industriales (SEPI) in Spain. The acquisition is also subject to approval by relevant competition authorities. Until the
completion of these approvals, the acquisition does not meet the recognition criteria under IFRS 3 Business combinations, and
accordingly the Group continues to recognise the 20 per cent share capital ownership of Air Europa Holdings as an Other equity
investment (see note 2 for critical judgement applied in this classification).
At 31 December 2023, the fair value of the investment in Air Europa Holdings was €129 million, representing an increase of €105
million from the €24 million recorded at 31 December 2022, with the fair value movement having been recorded within Other
comprehensive income.
The Group, with its external valuation advisors, determined the fair value of the investment in Air Europa Holdings at 31 December
2023 and 31 December 2022, using both the market approach and the income approach, whereby the Group used both observable
market data and unobservable inputs. The fair value was determined on the stand-alone basis of Air Europa Holdings without
consideration of potential synergies that could be obtained if the Group were able to obtain control over the operations of Air
Europa Holdings.
In determining the fair value of the investment in Air Europa Holdings at 31 December 2023, the Group used the following significant
unobservable inputs: (i) revenue compound annual growth rate of 4.0 per cent; (ii) an EBITDA range of 3.6 to 6.5 per cent; and (iii) a
risk-adjusted pre-tax discount rate of 13.9 per cent.
44

20 Trade and other receivables
€ million
2023
2022
1,673
1,444
(114)
(114)
1,559
1,330
750
639
495
231
329
356
1,574
1,226
401
337
9
–
22
25
432
362
1
1, 2
1 For the year ended 31 December 2023, the Group has elected to disaggregate prepayments and accrued income, which had previously been
aggregated into a single line item. Accordingly figures for the comparative year to 31 December 2022 have been reclassified to conform with the
current year presentation.
2 The accrued income balance (representing contract assets) predominantly relates to revenue earned from ongoing maintenance and overhaul
services, where the balances vary depending on the number of ongoing activities at the reporting date.
Movements in the provision for expected credit loss were as follows:
€ million
2023
2022
114
115
4
10
(3)
(1)
(1)
(9)
–
(1)
114
114
Trade receivables are generally non-interest-bearing and on 30 days terms (2022: 30 days).
The credit risk exposure on the Group’s trade receivables is set out below:
31 December 2023
€ million
Current
<30 days
30-180 days
180-365 days
> 365 days
959
296
241
53
124
0.1%
0.1%
1.7%
7.5%
85.2%
–
–
4
4
106
31 December 2022
€ million
Current
<30 days
30-180 days
180-365 days
> 365 days
719
509
91
25
100
0.3%
0.1%
1.1%
44.0%
100.0%
2
–
1
11
100
45

21 Inventories
€ million
2023
2022
417
296
43
36
34
21
494
353
1
1 For the year to 31 December 2023, the Group has elected to provide a disaggregated breakdown of the Balance sheet caption ‘Inventories’ and has
accordingly provided figures for the comparative year at 31 December 2022.
22 Cash, cash equivalents and other current interest-bearing deposits
a Cash
€ million
2023
2022
1,531
3,286
3,910
5,910
5,441
9,196
1,396
403
6,837
9,599
Cash at bank is primarily held in AAA money market funds and bank deposits. Short-term deposits are for periods up to three
months and earn interest based on the floating deposit rates.
At 31 December 2023, the Group had no outstanding bank overdrafts (2022: €nil).
Current interest-bearing deposits have maturities in excess of three months and typically within 12 months of the reporting date and
earn interest based on the market rates available at the time the deposit was made.
At 31 December 2023, Aer Lingus held €31 million of restricted cash (2022: €33 million) within interest-bearing deposits maturing
after more than three months to be used for employee-related obligations.
b Net debt
Movements in net debt were as follows:
January 2023
Cash flows
modifications
Other items
financed liabilities
10,365
(3,267)
(102)
–
119
7,115
Lease liabilities
9,619
(1,731)
(259)
1,315
23
8,967
Cash and cash equivalents
(9,196)
3,753
2
–
–
(5,441)
Current interest-bearing deposits
(403)
(985)
(8)
–
–
(1,396)
10,385
(2,230)
(367)
1,315
142
9,245
January 2022
Cash flows
modifications
Other items
financed liabilities
9,973
386
103
–
(97)
10,365
Lease liabilities
9,637
(1,455)
415
1,017
5
9,619
Cash and cash equivalents
(7,892)
(1,316)
12
–
–
(9,196)
Current interest-bearing deposits
(51)
(351)
(1)
–
–
(403)
11,667
(2,736)
529
1,017
(92)
10,385
46

23 Trade and other payables
€ million
2023
2022
3,177
2,969
1,244
1,244
262
228
683
665
224
103
5,590
5,209
1
1
2
1 Trade creditors includes €nil (2022: €48 million) due to suppliers that have signed up to supply chain financing programmes offered by a number of
partner financial institutions. While the Group no longer provides such a service to its suppliers, in 2022, these programmes either or both: (i) the
suppliers could elect on an invoice-by-invoice basis to receive a discounted early payment from the partner financial institutions rather than being
paid in line with the agreed payment terms; and/or (ii) the Group could have elected on an invoice-by-invoice basis for the partner financial
institution to pay the supplier in line with the agreed payment terms and the Group enter into payment terms with the partner financial institution of
up to 150 days with interest incurred at 2.5 per cent.
The Group, in 2022, assessed the arrangement against indicators to assess if liabilities which suppliers had transferred to the partner financial
institutions under the supplier financing programmes continued to meet the definition of trade creditors or should have been classified as
borrowings. The cash flows arising from such arrangements were reported within cash flows from operating activities or within cash flows from
financing activities, in the Consolidated cash flow statement, depending on whether the associated liabilities met the definition of trade creditors or
as borrowings.
At 31 December 2023 and 31 December 2022, these liabilities met the criteria of Trade creditors and are excluded from the Net debt table in note 22b.
2 For the year ended 31 December 2023, the Group has elected to disaggregate accruals and deferred income, which had previously been aggregated
into a single line item. Accordingly figures for the comparative year to 31 December 2022 have been reclassified to conform with the current year
presentation.
Average payment days to suppliers – Spanish Group companies
Days
2023
2022
25
34
25
33
17
53
€ million
2023
2022
10,966
6,676
158
264
Information on invoices paid in a period shorter than the maximum period established in the late payment regulations – Spanish
Group companies
2023
2022
10,002
5,111
91%
77%
213
110
76%
48%
24 Deferred revenue
carriage
Total
2,630
5,014
7,644
–
21,107
21,107
(1,052)
(21,015)
(22,067)
15
–
15
1,085
161
1,246
34
44
78
2,712
5,311
8,023
2,455
5,311
7,766
257
–
257
2,712
5,311
8,023
1
2, 3
4
47

carriage
Total
2,820
3,732
6,552
–
21,000
21,000
(801)
(19,708)
(20,509)
21
–
21
662
82
744
(72)
(92)
(164)
2,630
5,014
7,644
2,304
5,014
7,318
326
–
326
2,630
5,014
7,644
1
2, 3, 5
4
1 Cash received from customers is net of refunds.
2 Where the Group acts as an agent in the provision of redemption products and services to customers through loyalty programmes, or in the
provision of interline flights to passengers, revenue is recognised in the Income statement net of the related costs.
3 Included within revenue recognised in the Income statement during 2023 is an amount of €3,914 million previously held as deferred revenue at 1
January 2023 (recognised during 2022 and previously held as deferred revenue at 1 January 2022: €2,183 million).
4 Included within loyalty points issued to customers at 31 December 2023 is an amount of €161 million (31 December 2022: €82 million) classified within
Sales in advance of carriage representing the cash component of the consideration paid by customers, where such consideration comprises both
cash and the redemption of Avios.
5 The 2022 results include an aggregation to conform with the current basis of preparation, where the changes in estimates have been amalgamated
with revenue recognised in the Income statement.
The unsatisfied performance obligation under the Group’s customer loyalty programmes that is classified as non-current was €241
million at 31 December 2023, all of which is expected to be recognised as revenue within one to five years from the reporting date.
Deferred revenue relating to customer loyalty programmes consists primarily of consideration allocated to performance obligations
associated with Avios. Avios are issued by the Group’s airlines through their loyalty programmes, or are sold to third parties such as
credit card providers, who issue them as part of their loyalty programmes. While Avios do not have an expiry date and can be
redeemed at any time in the future, a customer’s membership account is closed if there is a period of 36 months of inactivity in
terms of both issuances and redemptions. Revenue may therefore be recognised at any time in the future.
Unredeemed vouchers liability
At 31 December 2023 the Group recognised €645 million in respect of unredeemed vouchers, including associated taxes (2022: €911
million) within Deferred revenue. Of the €645 million, €139 million relates to vouchers issued due to COVID-19 pandemic flight
cancellations, referred to as ‘disrupted flights’ and €506 million relates to non-disrupted voucher issuance, such as the British
Airways ‘Book with Confidence’ policy (where customers were provided the flexibility to change their destination and/or date of
travel on non-disrupted flights), certain other flexible fare options, non-air partner companion vouchers and gift vouchers.
The jurisdiction in which a voucher is issued, dictates the period over which a customer can redeem the voucher, which ranges up to
six years from the point of issuance. This period of time is also influenced by whether the voucher was issued for disrupted flights or
non-disrupted issuance and whether statutory or commercial expiry policies prevail. The Group expects the majority of the total
voucher liability to mature within 12 months of the reporting date.
During, and subsequent to, the recovery from the COVID-19 pandemic, the Group, across each of its operating companies, has
engaged in marketing campaigns and direct customer engagement in an attempt to maximise redemption of these vouchers.
Despite these efforts, the Group expects some of these vouchers to expire unredeemed. The Group estimates the number of these
vouchers, both for disrupted flights and non-disrupted issuance, not expected to be redeemed prior to expiry using statistical
modelling based on historical experience and expected future redemptions, recognising this estimated value as passenger revenue
when it can be reasonably determined that there will not be a significant reversal of this revenue in future accounting periods.
A 5 percentage point increase in the assumption of the number of vouchers outstanding at 31 December 2023 and not expected to
be redeemed prior to expiry would result in a reduction to Deferred revenue of €32 million, with an offsetting adjustment to increase
Passenger revenue and Operating profit recognised in the year.
25 Other long-term liabilities
€ million
2023
2022
164
147
55
53
219
200
48

26 Long-term borrowings
a Total borrowings
2023
2022
€ million
Current
Non-current
Total
Current
Non-current
Total
113
1,840
1,953
813
5,128
5,941
9
726
735
9
596
605
303
4,124
4,427
255
3,564
3,819
1,826
7,141
8,967
1,766
7,853
9,619
2,251
13,831
16,082
2,843
17,141
19,984
1
1
1 The 2022 total borrowings include a reclassification to conform with the current basis of presentation, where the 2028 convertible bond, amounting
to €605 million at 31 December 2022 and accounted for at fair value, has been separated from Bank and other loans. There is no change to total
borrowings.
Long-term borrowings of the Group amounting to €4,516 million (31 December 2022: €3,962 million) are secured on owned fleet
assets with a net book value of €4,736 million (31 December 2022: €3,931 million). All asset financed liabilities, included within long-
term borrowings, are all secured on the associated aircraft or other property, plant and equipment.
b Bank, other loans and convertible bond
€ million
2023
2022
735
605
717
717
510
509
500
499
114
143
56
56
Fixed rate unsecured US dollar mortgage loan
6
46
71
Fixed rate unsecured euro loans with the Spanish State (Department of Industry)
7
10
10
–
2,315
–
1,070
–
501
–
50
2,688
6,546
(122)
(822)
2,566
5,724
1
2
2
3
4
5
8
9
3
10
1 See details of the 2028 convertible bond below.
2 On 25 March 2021, the Group issued two tranches of senior unsecured bonds for an aggregate principal amount of €1.2 billion, €500 million due
25 March 2025 and €700 million due 25 March 2029. The bonds bear a fixed rate of interest of 2.75 per cent and 3.75 per cent per annum, payable in
arrears, respectively. The bonds were issued at 100 per cent of their principal amount, respectively, and, unless previously redeemed or purchased
and cancelled, will be redeemed at 100 per cent of their principal amount on their respective maturity dates.
3 In July 2019, the Group issued two tranches of senior unsecured bonds for an aggregate principal amount of €1 billion, €500 million due 4 July 2023
and €500 million due 4 July 2027. The 2023 bond bore a fixed rate of interest of 0.5 per cent per annum and was redeemed in full at maturity on 4
July 2023. The 2027 bond bears a fixed rate of interest of 1.5 per cent per annum annually payable in arrears. The 2027 bond was issued at 98.803
per cent of its principal amount, and, unless previously redeemed or purchased and cancelled, will be redeemed at 100 per cent of its principal
amount on its maturity date.
4 Floating rate euro mortgage loans are secured on specific aircraft assets of the Group and bear interest of between 4.45 and 5.46 per cent. The loans
are repayable between 2024 and 2027.
5 Total of €55 million fixed rate secured bonds with 3.75 per cent coupon repayable between 2024 and 2027.
6 Fixed rate unsecured US dollar mortgage loan bearing interest between 1.38 to 2.86 per cent. The loan is repayable between 2025 and 2026.
7 Fixed rate unsecured euro loans with the Spanish State (Department of Industry) bear nil interest and are repayable in 2031.
8 On 22 February 2021, British Airways entered into a floating rate five-year term loan Export Development Guarantee Facility of €2.3 billion (£2.0
billion) underwritten by a syndicate of banks, with 80 per cent of the principal guaranteed by the UKEF. On 1 November 2021, British Airways entered
into a further five-year term loan Export Development Guarantee Facility of €1.1 billion (£1.0 billion) underwritten by a syndicate of banks, with 80 per
cent of the principal guaranteed by the UKEF. On 28 September 2023, British Airways repaid the £2.0 billion term loan in full, while concurrently
entering into a further five-year term loan Export Development Guarantee Facility of €1.2 billion (£1.0 billion) underwritten by a syndicate of banks,
with 80 per cent of the principal guaranteed by the UKEF. The terms and maturity of the Export Development Guarantee Facility entered into in
November 2021 remain unchanged. These two remaining UKEF guaranteed facilities had not been drawn as at 31 December 2023.
9 On 30 April 2020, Iberia and Vueling entered into floating rate syndicated financing agreements of €750 million and €260 million respectively. On 31
October 2023, Iberia repaid its loan in full. On 30 November 2023, Vueling repaid its loan in full.
10 On 23 December 2020, Aer Lingus entered into a floating rate financing agreement with the Ireland Strategic Investment Fund (ISIF) for €75 million.
On 27 March 2021, Aer Lingus entered into a further floating rate financing agreement with the ISIF for an additional €75 million. On 4 March 2022,
Aer Lingus entered into a financing arrangement with ISIF, which subsequently extinguished the existing €150 million of facilities and replaced them
with a €350 million facility that matures in March 2025. On 13 December 2022 and 4 March 2023, Aer Lingus early repaid €100 million and €50
million, respectively, of the ISIF facility, with these amounts being available to draw again over the tenor of the facility. The facility is secured on
specific landing rights. At 31 December 2023, €350 million of this facility remained undrawn.
49

In addition, on 23 March 2021, the Group entered into a three-year US dollar secured Revolving Credit Facility of $1.755 billion
accessible by British Airways, Iberia and Aer Lingus. On 23 August 2022, the Group extended the term of the Revolving Credit
Facility by an additional 12 months through to March 2025. On 23 August 2023, of the $1.755 billion facility, the Group further
extended the terms of the $1.655 billion Revolving Credit Facility by an additional 12 months through to March 2026 with the
remaining $100 million available through to March 2025. As at 31 December 2023 no amounts had been drawn under the facility
(2022: nil). While the Group does not forecast drawing down on the Revolving Credit Facility, should it do so, the resultant debt
would be secured, in the respective operating companies, against: (i) specific landing rights; or (ii) aircraft; or (iii) or a combination of
both.
Details of the 2028 convertible bond
On 11 May 2021, the Group issued the €825 million fixed rate 1.125 per cent senior unsecured bond convertible into ordinary shares of
IAG. The convertible bond raised net proceeds of €818 million and matures in 2028. The Group holds an option to redeem the
convertible bond at its principal amount, together with accrued interest, no earlier than two years prior to the final maturity date.
The convertible bond provides bondholders with dividend protection and includes a total of 244,850,715 options at inception and at
31 December 2023 to convert into ordinary shares of IAG. The Group also holds an option to redeem the convertible bond, in full or
in part, in cash in the event that bondholders exercise their right to convert the bond into ordinary shares of IAG. The bondholders
conversion right is currently exercisable.
The convertible bond is recorded at its fair value, which at 31 December 2023 was €735 million (2022: €605 million), representing an
increase of €130 million since 1 January 2023. Of this increase, the charge recorded in Other comprehensive income arising from
credit risk of the convertible bonds was €119 million and a charge recorded within Finance costs in the Income statement attributable
to changes in market conditions of €11 million.
Transactions with unconsolidated entities
The Group has entered into asset financing transactions with unconsolidated entities as follows:
• The British Airways Pass Through Certificates, Series 2019-1 were entered into in the third quarter of 2019, recognising Asset
financed liabilities of €725 million for eight aircraft that mature between 2029 and 2034;
• The British Airways Pass Through Certificates, Series 2020-1 were entered into in the fourth quarter of 2020, recognising Asset
financed liabilities of €472 million for nine aircraft that mature between 2028 and 2032;
• The British Airways Pass Through Certificates, Series 2021-1 were entered into in the third quarter of 2021, recognising Asset
financed liabilities of €204 million for seven aircraft that mature between 2031 and 2035;
• The Iberia Pass Through Certificates, Series 2022-1 were entered into in April 2022, recognising Asset financed liabilities of €680
million for five aircraft that mature between 2032 and 2036;
• The British Airways Pass Through Certificates, Series 2022-1 were entered into in October 2022, recognising Asset financed
liabilities of €159 million for four aircraft that mature between 2032 and 2036; and
• There have been no asset financing transactions with unconsolidated entities during the year to 31 December 2023.
As at 31 December 2023, Asset financed liabilities include cumulative amounts of €2,948 million (2022: €2,983 million) and the
associated assets recorded within Property, plant and equipment include cumulative amounts of €2,757 million (2022: €3,400
million) associated with transactions with unconsolidated structured entities having issued EETCs.
50

26 Long-term borrowings continued
c Total loans, convertible bond, asset financed liabilities and lease liabilities
Million
2023
2022
$50
$75
€124
€1,273
–
£2,026
€170
€3,659
€1,783
€2,282
€1,783
€2,282
€735
€605
€735
€605
$3,849
$3,285
€746
€542
¥28,432
¥25,748
€4,427
€3,819
$7,399
$7,621
€1,008
€1,239
¥68,998
¥71,994
£690
£620
€8,967
€9,619
Total interest-bearing borrowings
€16,082
27 Provisions
provisions
Total
2,400
194
673
89
132
60
3,548
520
1
53
15
238
32
859
4
–
–
(1)
–
(6)
(3)
(338)
(82)
(35)
(9)
–
(32)
(496)
–
–
–
–
(98)
–
(98)
(68)
(21)
(2)
(15)
(26)
(1)
(133)
78
2
23
–
–
–
103
4
–
24
–
–
–
28
(71)
–
(1)
3
1
–
(68)
2,529
94
735
82
247
53
3,740
467
59
73
56
247
7
909
2,062
35
662
26
–
46
2,831
2,529
94
735
82
247
53
3,740
51

Restoration and handback provisions
Provisions for restoration and handback costs are maintained to meet the contractual maintenance and return conditions on aircraft
held under lease. For those obligations arising on inception of an aircraft lease, the associated estimated cost is capitalised within the
ROU asset. For those obligations that arise through usage or through the passage of time, the associated estimated costs are
recognised in the Income statement as the associated asset is used or through the passage of time. The provision is long term in
nature, typically covering the leased asset term, which for aircraft is up to 12 years.
The provisions also include an amount relating to leased land and buildings where restoration costs are contractually required at the
end of the lease. Such costs are capitalised within ROU assets.
The provisions are determined by discounting the future cash flows using pre-tax risk-free rates specific to the tenor of the provision
and the currency in which it arises. The unwinding of the discounting of the provisions is recorded as a finance cost in the Income
statement (see note 9a).
Remeasurements arising from changes in estimates relating to the effects of both discounting and inflation are recorded in the
Income statement to the extent they relate to avoidable provisions or recorded as an adjustment to the right of use asset (see note
14) for those unavoidable provisions.
Where amounts are finalised and the uncertainty relating to these provisions removed, the associated liability is reclassified to either
current or non-current Other creditors, dependent on the expecting timing of settlement.
Restructuring provisions
The restructuring provision includes provisions for voluntary redundancies including the collective redundancy programme for Iberia's
Transformation Plan implemented prior to 2023, which provides for payments to affected employees until they reach the statutory
retirement age. The amount provided for has been determined by an actuarial valuation made by independent actuaries, and was
based on the same assumptions as those made to determine the provisions for obligations to flight crew below, with the exception of
the discount rate, which in this case was 3.2 per cent. The payments related to this provision will continue over the next six years.
At 31 December 2023, €88 million of this provision related to collective redundancy programmes (2022: €185 million).
Employee leaving indemnities and other employee related provisions
This provision includes employee leaving indemnities relating to staff under various contractual arrangements. As part of these
provisions, the Group recognises provisions relating to the Iberia flight crew (both pilots and cabin crew):
• Pilots – under the relevant collective bargaining agreement, pilots have the option at the age of 60 to elect to: continue in full-time
employment; being placed on reserve and retaining their employment relationship until reaching the statutory retirement age
(referred to as ‘active’); or alternatively taking early retirement (referred to as ‘inactive’). Additionally, and in certain cases, those
pilots from the age of 55, may apply for retaining their employment relationship, but with reduced activity (referred to as ‘special
leave’); and
• Cabin crew – under the relevant collective bargaining agreement, cabin crew have the option at the age of 62 to elect to: continue
in full-time employment; being transferred to active status; or being transferred to inactive status. Additionally, and in certain
cases, those cabin crew employees from the age of 57, may apply for ‘special leave’.
The Group is required to remunerate these employees until they reach the statutory retirement age. In determining the provision to
be recognised for the proportion of employees that will elect either special leave or to be inactive, the Group estimates a number of
financial assumptions, including, but not limited to: (i) medium to long-term salary growth and inflation; (ii) the discount rate to
apply; (iii) the rate of public social security growth; (iv) mortality rates; and (v) staff turnover.
The provision was re-assessed at 31 December 2023 with the use of independent actuaries using the projected unit credit method,
based on a discount rate consistent with the iBoxx index of 3.17 per cent for active employees and 2.98 per cent for inactive
employees (2022: iBoxx index of 3.72 per cent and 3.50 per cent, respectively), the PER_Col_2020.1er.orden. mortality tables, and
assuming contractual salary increases of up to 3.8 per cent in 2024 and 3.3 per cent in 2025 and then 2.0 per cent per annum
thereafter derived from increases in the Consumer Price Index (CPI). At 31 December 2023, there were a total of 5,179 flight crew (31
December 2022: 4,827) eligible for making such elections when they reach the age of 60. At 31 December 2023, there were 479
employees who had not reached the age of retirement, and eligible to elect for early retirement (‘special leave’) who had elected to
become inactive (31 December 2022: 426). In addition, at 31 December 2023, there were 25 employees having reached the age of
retirement, who had elected to become inactive (31 December 2022: 15).
At 31 December 2023, the average length of employment of the eligible flight crew was 17 years (31 December 2022: 18 years). This is
mainly a long-term provision. Remeasurements in the valuation of this provision are recorded in Other comprehensive income. The
amount relating to this provision was €677 million at 31 December 2023 (2022: €611 million).
Legal claims and contractual disputes provisions
Legal claims and contractual disputes provisions include:
• amounts for multi-party claims from groups of employees on a number of matters related to their employment, including claims
for additional holiday pay and for age discrimination;
• amounts related to ongoing contractual disputes arising from the Group’s operations; and
• amounts related to investigations by a number of competition authorities in connection with alleged anti-competitive activity
concerning the Group’s passenger and cargo businesses.
The final amount required to settle the remaining claims and fines is subject to uncertainty.
ETS provisions
ETS provisions relate to the Emissions Trading Scheme for CO
2
equivalent emitted on flights within the EU, Switzerland and the UK
and due to be extinguished in the year subsequent to the reporting date through settlement with the relevant authorities. See notes
2 and 4 for further information.
52

28 Contingent liabilities
There are a number of legal and regulatory proceedings against the Group in a number of jurisdictions which at 31 December 2023,
where they could be reliably estimated, but excluding the Vueling hand luggage matter detailed below, amounted to €58 million (31
December 2022: €11 million). The Group does not consider it probable that there will be an outflow of economic resources with
regard to these proceedings and accordingly no provisions have been recorded.
Contingent liabilities associated with income taxes, deferred taxes and indirect taxes are presented in note 10.
Included in contingent liabilities is the following:
Air Europa Holdings acquisition break-fee
On 23 February 2023, the Group entered into an agreement to acquire the remaining 80 per cent of the share capital of Air Europa
Holdings from Globalia that it had not previously owned. The acquisition is conditional on Globalia receiving approval from the
syndicated banks that provide the loan agreements that are partially guaranteed by the Instituto de Crédito Oficial (ICO) and
Sociedad Estatal de Participaciones Industriales (SEPI) in Spain. The acquisition is also subject to approval by relevant competition
authorities.
In the event that the relevant approvals, detailed above, are not forthcoming within 24 months of entering into the agreement or the
Group terminates the agreement at any time prior to completion, then the Group is required to pay a break-fee to Globalia of €50
million. Under the agreement, this 24-month period can be extended, by mutual consent.
At 31 December 2023 and through to the date of the consolidated financial statements, the Group considers that it is probable that
the acquisition will successfully complete and accordingly does not consider it probable that the break-fee shall be paid. Given the
above the Group does not consider it appropriate to record a provision for the break-fee.
Vueling commercial hand luggage policy
In the year ended 31 December 2023, Vueling received a number of information requests from the Ministerio de Consumo (Ministry
of Consumer Affairs) in Spain, with regard to its commercial hand luggage policy, for which Vueling complied with. On 12 January
2024, the Ministerio de Consumo issued Vueling with a List of Charges asserting that the Vueling commercial hand luggage policy
infringes consumers rights under Article 47.1 of Royal Legislative Decree 1/2007. While the List of Charges notifies Vueling of its
intention to sanction the company for such infringements, it stipulates that the basis for determining such penalties is subject to the
provision of further information by the company. Accordingly, it is not possible to estimate reliably any exposure that may arise from
this matter until ongoing proceedings with the Ministerio de Consumo are further progressed. The Group, with its advisors, has
reviewed the correspondence and List of Charges from the Ministerio de Consumo and considers it has strong arguments to support
its commercial hand luggage policy and does not consider it probable that an adverse outcome will result in the future. As such, the
Group does not consider it appropriate to record any provision. The Group expects further developments on this matter during the
remainder of 2024.
29 Financial risk management objectives and policies
The Group is exposed to a variety of financial risks: market risk (including fuel price risk, foreign currency risk and interest rate risk),
credit risk and liquidity risk. The principal impacts of these on the financial statements are discussed below:
a Fuel price risk
The Group is exposed to fuel price risk. In order to mitigate such risk, under the Group’s fuel price risk management strategy a
variety of over the counter derivative instruments are entered into. The Group strategy is to hedge a proportion of fuel consumption
up to two years within the approved hedging profile.
The following table demonstrates the sensitivity of the Group’s principal exposure to a reasonable possible change in the fuel price,
based on current market volatility, with all other variables held constant on the profit before tax and equity
1
. The sensitivity analysis
has been performed on fuel derivatives (both those designated in hedge relationships and those not designated in hedge
relationships) at the reporting date only and is not reflective of the impact had the sensitised rates been applied through the
duration of the years to 31 December 2023 and 2022.
2023
2022
40
–
1,497
45
–
1,402
(40)
–
(1,526)
(45)
–
(1,200)
1 The sensitivity analysis on equity excludes the sensitivity amounts recognised in the profit before tax.
During 2023, following a substantial recovery in the global price of crude oil and jet fuel, which continues to be impacted by
geopolitical events, the fair value of such net liability derivative instruments was €115 million at 31 December 2023 (2022: net asset of
€87 million), representing a decrease of €202 million since 1 January 2023. Of the carrying amount of the net liability at 31 December
2023, all (2022: all) of the associated derivatives were designated within hedge relationships.
53

b Foreign currency risk
The Group is exposed to foreign currency risk on revenue, purchases and borrowings that are denominated in a currency other than
the functional currency of each of the Group’s operating companies, being pound sterling and the euro. The currencies in which
these transactions are denominated are primarily US dollar, pound sterling and the euro. The Group has a number of strategies to
hedge foreign currency risk including hedging a proportion of its foreign currency sales and purchases for up to three years.
The following table demonstrates the sensitivity of the Group’s principal foreign exchange exposure to a reasonable possible change
in the US dollar, pound sterling and Japanese yen exchange rates, based on current market volatility, with all other variables held
constant on the profit before tax and equity
1
. The sensitivity analysis has been performed on interest-bearing liabilities, lease
liabilities and derivatives (both those designated in hedge relationships and those not designated in hedge relationships)
denominated in foreign currencies at the reporting date only and is not reflective of the impact had the sensitised rates been applied
through the duration of the years to 31 December 2023 and 2022.
20
343
1,005
20
6
262
20
(50)
(64)
(20)
(346)
(1,159)
(20)
(8)
(262)
(20)
50
64
20
904
1,299
20
(20)
241
20
(58)
(70)
(20)
(922)
(1,161)
(20)
18
(241)
(20)
58
70
1 The sensitivity analysis on equity, excludes the sensitivity amounts recognised in the profit before tax.
At 31 December 2023, the fair value of foreign currency net liability derivative instruments was €357 million (2022: net asset of €108
million), representing a decrease of €465 million since 1 January 2023. These comprise both derivatives designated in hedge
relationships and those derivatives that are not designated in a hedge relationship at inception. Of the carrying amount of the net
liability at 31 December 2023, €151 million (2022: net asset of €96 million) of the associated derivatives were designated within hedge
relationships. Those derivatives not designated in a hedge relationship on inception have their mark-to-market movements recorded
directly in the Income statement and recognised within Net currency retranslation credits/(charges).
c Interest rate risk
The Group is exposed to changes in interest rates on debt and on cash deposits. In order to mitigate the interest rate risk, the
Group’s policies allow a variety of over the counter derivative instruments to be entered into.
The following table demonstrates the sensitivity of the Group’s interest rate exposure to a reasonable possible change in the US
dollar, euro and sterling interest rates, based on expectations regarding forward rate movements, on the profit before tax and
equity
1
. The sensitivity analysis has been performed on interest rate derivatives (both those designated in hedge relationships and
those not designated in hedge relationships) at the reporting date only and is not reflective of the impact had the sensitised rates
been applied through the duration of the years to 31 December 2023 and 2022.
100
–
–
100
(12)
16
100
–
–
(100)
–
–
(100)
12
(16)
(100)
–
–
150
–
6
150
5
17
150
(35)
–
(150)
–
(7)
(150)
(4)
(17)
(150)
35
–
1 The sensitivity analysis on equity excludes the sensitivity amounts recognised in the profit before tax.
At 31 December 2023, the fair value of interest rate net asset derivative instruments was €28 million (2022: net asset of €60 million),
representing a decrease of €32 million since 1 January 2023. Of the carrying amount of net asset at 31 December 2023, all (2022: all)
of the associated derivatives were designated within hedge relationships.
d Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract, leading to a
financial loss. The Group is exposed to credit risk from its financing activities, including deposits with banks and financial institutions,
foreign exchange transactions and other financial instruments. The Group has policies and procedures to monitor the risk by
assigning limits to each counterparty by underlying exposure and by operating company and by only entering into transactions with
counterparties with a very low credit risk.
At each period end, the Group assesses the effect of counterparties’ and the Group’s own credit risk on the fair value of derivatives
and any ineffectiveness arising is immediately recognised in the Income statement within Other non-operating credits.
54

29 Financial risk management objectives and policies continued
e Counterparty risk
The Group is exposed to the non-performance by its counterparties in respect of financial assets receivable. The Group has policies
and procedures to monitor the risk by assigning limits to each counterparty by underlying exposure and by operating company. The
underlying exposures are monitored on a daily basis and the overall exposure limit by counterparty is periodically reviewed by using
available market information.
The financial assets recognised in the financial statements, net of impairment losses (if any), represent the Group’s maximum
exposure to credit risk, without taking into account any guarantees in place or other credit enhancements.
At 31 December 2023 the Group’s credit risk position, allocated by region, in respect of treasury managed cash and derivatives was as follows:
Region
2023
2022
55 %
51 %
– %
1 %
16 %
20 %
24 %
27 %
5 %
1 %
f Liquidity risk
The Group invests cash in interest-bearing accounts, time deposits and money market funds, choosing instruments with appropriate
maturities or liquidity to retain sufficient headroom to readily generate cash inflows required to manage liquidity risk. The Group has
also committed revolving credit facilities.
At 31 December 2023, the Group had undrawn overdraft facilities of €53 million (2022: €53 million).
The Group held the following undrawn general and committed aircraft financing facilities:
Million
Currency
€ equivalent
€87
87
€350
350
$1,755
1,605
£2,000
2,317
$410
375
Million
Currency
€ equivalent
Euro facilities expiring between January and March 2023
€87
87
US dollar facility expiring November 2023
$50
47
€300
300
$1,755
1,654
£1,000
1,143
$386
364
$273
257
$525
495
1
2
2
2
4
1
2
2
2
3
3
4
1 The general facilities can be drawn at any time at the discretion of the Group subject to the provision of up to three days’ notice of the intended
utilisation, depending on the facility.
2 Further information regarding these facilities is given in note 26b.
3 The aircraft facilities that matured in 2023 were available for specific committed aircraft deliveries.
4 The aircraft facilities maturing between June 2024 and July 2024 (2022: maturing between October 2023 and March 2024) are available for specific
committed aircraft deliveries.
55

The following table analyses the Group’s (outflows) and inflows in respect of financial liabilities and derivative financial instruments
into relevant maturity groupings based on the remaining period at 31 December to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows and include interest.
years
Total 2023
(241)
(230)
(448)
(1,317)
(3,195)
(5,431)
(1,303)
(864)
(1,546)
(3,798)
(5,017)
(12,528)
(59)
(16)
(588)
(1,513)
(726)
(2,902)
(15)
(38)
(27)
(42)
–
(122)
(5,590)
–
(219)
–
–
(5,809)
12
9
8
4
1
34
35
17
6
–
–
58
5
4
26
–
–
35
(1)
(1)
(1)
(1)
–
(4)
(206)
(179)
(38)
–
–
(423)
(42)
(43)
(35)
(39)
–
(159)
(7,405)
(1,341)
(2,862)
(6,706)
(8,937)
(27,251)
years
Total 2022
(196)
(190)
(374)
(1,081)
(2,823)
(4,664)
(955)
(1,050)
(2,120)
(3,374)
(5,295)
(12,794)
(64)
(523)
(78)
(1,242)
(757)
(2,664)
(227)
(146)
(455)
(3,191)
–
(4,019)
(5,209)
–
(200)
–
–
(5,409)
42
9
12
9
–
72
245
195
46
–
–
486
122
62
13
–
–
197
(4)
(1)
(1)
(3)
–
(9)
(185)
(121)
(68)
–
–
(374)
(42)
(59)
(10)
–
–
(111)
(6,473)
(1,824)
(3,235)
(8,882)
(8,875)
(29,289)
56

29 Financial risk management objectives and policies continued
g Offsetting financial assets and liabilities
The Group enters into derivative transactions under ISDA (International Swaps and Derivatives Association) documentation. In
general, under such agreements the amounts owed by each counterparty on a single day in respect of all transactions outstanding
are aggregated into a single net amount that is payable by one party to the other.
The following financial assets and liabilities are subject to offsetting, enforceable master netting arrangements and similar
agreements.
31 December 2023
1
151
(28)
123
(2)
121
595
(28)
567
(2)
565
1
1 The Group has pledged cash and cash equivalents as collateral against certain of its derivative financial liabilities. As 31 December 2023, the Group
recognised €nil of collateral (2022: €nil) offset in the balance sheet and €2 million (2022: €5 million) not offset in the Balance sheet.
31 December 2022
Balance sheet
Net amount
760
(34)
726
(5)
721
505
(34)
471
(5)
466
h Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, to maintain an
optimal capital structure, to reduce the cost of capital and to provide returns to shareholders.
The Group monitors capital on the basis of the net debt to EBITDA before exceptional items ratio. For the year to 31 December
2023, the net debt to EBITDA before exceptional items was 1.7 times (2022: 3.1 times). The definition and calculation for this
performance measure is included in the Alternative performance measures section.
Further detail on liquidity and capital resources and capital risk management is disclosed in the going concern section in note 2.
57

30 Financial instruments
a Financial assets and liabilities by category
The detail of the Group’s financial instruments at 31 December 2023 and 31 December 2022 by nature and classification for
measurement purposes is as follows:
€ million
Amortised cost
Income statement
Non-financial assets
–
188
–
–
188
–
–
42
–
42
211
–
–
221
432
1,559
–
–
–
1,559
545
–
–
1,029
1,574
–
–
81
–
81
1,396
–
–
–
1,396
5,441
–
–
–
5,441
€ million
Amortised cost
7,141
–
–
7,141
5,964
726
–
6,690
–
106
–
106
151
–
68
219
1,826
–
–
1,826
416
9
–
425
5,198
–
392
5,590
–
461
–
461
€ million
Amortised cost
Income statement
Non-financial assets
–
55
–
–
55
–
–
81
–
81
180
–
–
182
362
1,330
–
–
–
1,330
308
–
–
918
1,226
–
–
645
–
645
403
–
–
–
403
9,196
–
–
–
9,196
58

30 Financial instruments continued
€ million
Amortised cost
7,853
–
–
7,853
8,692
596
–
9,288
–
84
–
84
131
–
69
200
1,766
–
–
1,766
1,068
9
–
1,077
4,898
–
311
5,209
–
387
–
387
b Fair value of financial assets and financial liabilities
The fair values of the Group’s financial instruments are disclosed in hierarchy levels depending on the nature of the inputs used in
determining the fair values and using the following methods and assumptions:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. A market is regarded as active if quoted
prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and
those prices represent actual and regularly occurring market transactions on an arm’s length basis. Level 1 methodologies (market
values at the balance sheet date) were used to determine the fair value of listed asset investments classified as equity investments
and listed interest-bearing borrowings. The fair value of financial liabilities and financial assets incorporates own credit risk and
counterparty credit risk, respectively.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or
indirectly. The fair value of financial instruments that are not traded in an active market is determined by valuation techniques. These
valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity-specific
estimates.
Derivative instruments are measured based on the market value of instruments with similar terms and conditions using forward
pricing models, which include forward exchange rates, forward interest rates, forward fuel curves and corresponding volatility
surface data at the reporting date. The fair value of the principal derivative financial assets and liabilities are determined as follows,
incorporating adjustments for own credit risk and counterparty credit risk:
• commodity reference contracts including swaps and options transactions, referenced to: (i) CIF NWE cargoes jet fuel; (ii) ICE
Gasoil; (iii) ICE Brent; (iv) ICE Gasoil Brent crack; (v) Jet Differential and (vi) Jet fuel Brent crack - the mark-to-market valuation
prices are determined by reference to current forward curve and standard option pricing valuation models, values are discounted
to the reporting date based on the corresponding interest rate;
• currency forward and option contracts – by reference to current forward prices and standard option pricing valuation models,
values are discounted to the reporting date based on the corresponding interest rate; and
• interest rate swap contracts – by discounting the future cash flows of the swap contracts at market interest rate valued with the
current forward curve.
The fair value of the Group’s interest-bearing borrowings, excluding lease liabilities, is determined by discounting the remaining
contractual cash flows at the relevant market interest rates at the balance sheet date. The fair value of the Group’s interest-bearing
borrowings is adjusted for own credit risk.
associated assets. For other equity investments where cash flow information is not available, an adjusted net asset method is
applied. For the methodology in the determination of the fair value of the investment in Air Europa Holdings, see note 19.
The fair value of cash and cash equivalents, other current interest-bearing deposits, trade receivables, other current assets and trade
and other payables approximate their carrying value largely due to the short-term maturities of these instruments.
59

The carrying amounts and fair values of the Group’s financial assets and liabilities at 31 December 2023 are as follows:
Fair value
Carrying value
€ million
Level 1
Level 2
Level 3
Total
Total
1
–
187
188
188
–
12
–
12
25
–
32
–
32
32
–
58
–
58
58
–
33
–
33
33
–
3,900
–
3,900
4,427
2,429
53
–
2,482
2,574
–
111
–
111
114
–
4
–
4
4
–
415
–
415
415
–
148
–
148
148
1
1
1
2
2
2
1 Current portion of derivative financial assets is €81 million.
2 Current portion of derivative financial liabilities is €461 million.
The carrying amounts and fair values of the Group’s financial assets and liabilities at 31 December 2022 are set out below:
Fair value
Carrying value
€ million
Level 1
Level 2
Level 3
Total
Total
–
–
55
55
55
–
20
–
20
31
–
66
–
66
66
–
467
–
467
467
–
193
–
193
193
–
2,925
–
2,925
3,819
2,538
72
–
2,610
2,967
–
3,419
–
3,419
3,579
–
6
–
6
6
–
359
–
359
359
–
106
–
106
106
1
1
1
2
2
2
1 Current portion of derivative financial assets is €645 million.
2 Current portion of derivative financial liabilities is €387 million.
Financial assets, other equity instruments, financial liabilities and derivative financial assets and liabilities are all measured at fair value
in the consolidated financial statements. Interest-bearing borrowings, with the exception of the €825 million convertible bond due
2028 which is measured at fair value, are measured at amortised cost.
60

30 Financial instruments continued
c Level 3 financial assets reconciliation
The following table summarises key movements in Level 3 financial assets:
€ million
2023
2022
55
31
5
2
–
22
(1)
–
128
2
–
(2)
187
55
For details regarding the valuation of Air Europa Holdings, see note 19.
During the year to 31 December 2023, the Group recorded a transfer of an Other equity instrument of €1 million from Level 3 to
Level 1 following the public listing of the associated investment. There have been no other transfers between levels of the fair value
hierarchy during the year.
d Hedges
Cash flow hedges
At 31 December 2023, the Group’s principal risk management activities that were hedging future forecast transactions were:
• foreign exchange contracts, hedging foreign currency exchange risk on cash inflows and certain operational payments.
Remeasurement gains and losses on the derivatives are (i) recognised in equity and transferred to the Income statement, where
the hedged item is recorded directly in the Income statement, to the same caption as the underlying hedged item is classified; (ii)
recognised in equity and transferred to the Balance sheet, where the hedged item is a non-financial asset or liability, are recorded
to the Balance sheet to the same caption as the hedged item is recognised; and (iii) recognised in equity and transferred to the
Income statement, where the hedged item is a financial asset or liability, at the same time as the financial asset or liability is
recorded in the Income statement. Reclassification gains and losses on derivatives, arising from the discontinuance of hedge
accounting, are recognised in the Income statement when the future transaction is no longer expected to occur and recorded in
the relevant Income statement caption to which the hedged item is classified;
• crude, gas oil and jet kerosene derivative contracts, hedging price risk on fuel expenditure. Remeasurement gains and losses on
the derivatives are: (i) recognised in equity and transferred to the Income statement within Fuel, oil costs and emissions charges to
match against the related fuel cash outflow, where the underlying hedged item does not give rise to the recognition of fuel
inventory; and (ii) recognised in equity and transferred to the Balance sheet within Inventory, where the underlying hedged item is
fuel inventory. Gains and losses recorded within Inventory are recognised in the Income statement when the underlying fuel
inventory is consumed, within Fuel, oil costs and emission charges. Reclassification gains and losses on derivatives, arising from the
discontinuance of hedge accounting, are recognised in the Income statement within Fuel, oil costs and emissions charges when
the future transaction is no longer expected to occur;
• interest rate contracts, hedging interest rate risk on floating rate debt and certain operational payments. Remeasurement gains
and losses on the derivatives are recognised in equity and transferred to the Income statement within Interest expense; and
• future loan repayments denominated in foreign currency are designated in a hedge relationship hedging foreign exchange
fluctuations on revenue cash inflows. Remeasurement gains and losses on the associated loans are recognised in equity and
transferred to the Balance sheet, where the hedged item is a non-financial asset or liability when the loan repayments are made
(generally in instalments over the life of the loan).
The amounts included in equity are summarised below:
Losses/(gains) in respect of cash flow hedges included within equity
€ million
2023
2022
22
87
94
(178)
67
(127)
(1)
(46)
123
213
305
(51)
(75)
20
230
(31)
1
1
1
1, 2
1 The carrying value of derivative instruments recognised in assets and liabilities is analysed in parts a and b above.
2 Relates to previously terminated hedge relationships for which the underlying forecast transactions remain expected to occur.
61

Notional amounts of significant financial instruments used as cash flow hedging instruments:
hedge rate
Hedge range
1 year
1-2 years
2-5 years
5+ years
1.21
1.05 to 1.35
3,147
1,239
–
–
4,386
1.00
0.86 to 1.24
2,458
939
305
–
3,702
1.21
1.07 to 1.42
479
375
357
124
1,335
722
489 to 1,200
5,425
1,948
980
–
8,353
1.83
(0.06) to 3.90
2,127
912
493
2
1
1
1
2
3, 4
1 Expenditure includes both operating and capital expenditure.
2 Notional amounts of fuel commodity price hedging instruments represent 10.0 million metric tonnes of jet fuel equivalent and the hedge range is
expressed as the US dollar price per metric tonne, which for those products typically priced in barrels, has been determined using a conversion factor
of 7.88.
3 The hedge range for interest rate contracts is expressed as a percentage.
4 The notional amounts of interest rate contracts at 31 December 2023 were €1,354 million. Amounts included reflect the notional amortising amounts
outstanding at the end of each period and align with the profiles of the underlying hedged items.
hedge rate
Hedge range
1 year
1-2 years
2-5 years
5+ years
revenue and expenditure from US dollars to
pound sterling
1.23
1.05 to 1.45
3,582
1,355
–
–
4,937
revenue and expenditure from US dollars to
euros
1.08
0.91 to 1.26
2,578
1,318
–
–
3,896
revenue and expenditure from euros to
pound sterling
1.23
1.00 to 1.42
371
406
458
14
1,249
718
416 to 2,200
2,935
331
–
–
3,266
1.04
(0.03) to 3.13
2,360
504
238
9
1
1
1
2
3, 4
1 Expenditure includes both operating and capital expenditure.
2 Notional amounts of fuel commodity price hedging instruments represent 5.4 million metric tonnes of jet fuel equivalent and the hedge range is expressed
as the US dollar price per metric tonne, which for those products typically priced in barrels, has been determined using a conversion factor of 7.88.
3 The hedge range for interest rate contracts is expressed as a percentage.
4 The notional amounts of interest rate contracts at 31 December 2022 were €1,703 million. Amounts included reflect the notional amortising amounts
outstanding at the end of each period and align with the profiles of the underlying hedged items.
62

30 Financial instruments continued
Movements recorded in the cash flow hedge reserve
(€ million)
Ineffectiveness
revenue and expenditure
(1)
–
31
30
234
3
contracts
9
–
99
108
71
13
Derivatives used to hedge interest rates
–
–
48
48
(3)
–
Loan repayments to hedge future revenue
–
–
–
–
(47)
(18)
Instruments for which hedge accounting no
longer applies
–
–
–
–
–
(92)
8
–
178
186
255
(94)
Related deferred tax
(44)
(60)
10
hedge reserve
142
195
(84)
1
2
(€ million)
Ineffectiveness
revenue and expenditure
–
29
228
257
(525)
43
contracts
19
–
1,299
1,318
(1,249)
66
Derivatives used to hedge interest rates
–
–
(12)
(12)
(95)
–
Loan repayments to hedge future revenue
–
–
–
–
(1)
(7)
Instruments for which hedge accounting no
longer applies
–
–
–
–
–
(27)
19
29
1,515
1,563
(1,870)
75
Related deferred tax
(330)
398
(1)
hedge reserve
1,233
(1,472)
74
1
2
1 Ineffectiveness recognised in the Income statement is presented as Realised and Unrealised gains and losses on derivatives not qualifying for hedge
accounting within non-operating items.
2 Amounts recognised in Other comprehensive income represent gains and losses on the hedging instrument.
Discontinuance of hedge accounting
The losses associated with the discontinuance of hedge accounting recognised in the Income statement and the subsequent fair
value movements of those derivative instruments recorded in the Income statement through to the earlier of the reporting date and
the maturity date of the derivative are set out below:
€ million
2023
2022
–
(29)
–
–
–
(29)
63

Fair value hedges
At 31 December 2023, the Group’s principal risk management activities associated with fair value hedging were related to interest
rate contracts hedging the fair value risk on fixed rate lease liabilities. Remeasurement gains and losses on both the derivatives and
the host financial liability are recognised in Income statement within Other non-operating credits.
The carrying values of the hedged items and hedging instruments of the Group’s fair value hedges at 31 December 2023 are as
follows:
€ million
2023
2022
(65)
–
(4)
–
(2)
–
3
–
1
1 Hedged items included in the fair value hedges are presented within Borrowings in the Balance sheet and in note 26.
31 Share capital, share premium and treasury shares
31 December 2022: Ordinary shares of €0.10 each
4,971,476
497
7,770
4,971,476
497
7,770
a Treasury shares
During the year to 31 December 2023, the Group purchased 42.0 million shares at a weighted average share price of €1.83 per share
totalling €77 million, which are held as Treasury shares. A total of 3.3 million shares (2022: 8.1 million) were issued to employees
during the year as a result of vesting of employee share schemes. At 31 December 2023 the Group held 55.8 million shares (2022: 17.1
million) which represented 1.12 per cent (2022: 0.34 per cent) of the issued share capital of the Company.
32 Share-based payments
The Group operates share-based payment schemes as part of the total remuneration package provided to employees. These
schemes comprise both share option schemes where employees acquire shares at an option price and share award plans whereby
shares are issued to employees at no cost, subject to the achievement by the Group of specified performance targets.
a IAG Performance Share Plan
The IAG Performance Share Plan (PSP) was granted to senior executives and managers of the Group who are most directly involved
in shaping and delivering business success over the medium to long term. Awards made from 2015 to 2020 were nil-cost options,
with a two-year holding period following the three-year performance period, before options can be exercised. All awards had three
independent performance measures with equal weighting: Total Shareholder Return (TSR) relative to the STOXX Europe 600 Travel
and Leisure Index (2020 awards) or MSCI European Transportation Index (prior to 2020 awards), earnings per share, and Return on
Invested Capital.
b IAG Restricted Share Plan
The IAG Restricted Share Plan (RSP) was introduced in 2021 to increase the alignment of both interests and outcomes between the
Group’s senior management and shareholders through the build-up and maintenance of senior management shareholdings and an
increased focus on the long-term, sustainable performance of the Group. Awards have been made as conditional awards, with a two-
year holding period following the three-year vesting period. There are no performance measures associated with the awards. Vesting
will be contingent on the satisfaction of a discretionary underpin, normally assessed over three financial years commencing from the
financial year in which the award was granted. Approval at the end of the vesting period will be at the discretion of the
Remuneration Committee, considering the Group’s overall performance, including financial and non-financial performance measures
over the course of the vesting period, as well as any material risk or regulatory failures identified.
c IAG Full Potential Incentive Plan
In 2021, the Group launched the Full Potential Incentive Plan (FPIP), which was granted to key individuals involved in the delivery of a
series of transformation projects that will enable the Group to deliver business success over the medium to long term. The awards
have been made as conditional awards, vesting in 2025 and dependent on stretch performance targets for 2024 and the approval of
the Board.
d IAG Incentive Award Deferral Plan
The IAG Incentive Award Deferral Plan (IADP) is granted to qualifying employees based on performance and service tests. It will be
awarded when an annual incentive award is triggered subject to the employee remaining in employment with the Group for three
years after the grant date. The relevant population will receive 50 per cent of their incentive award up front in cash, and the
remaining 50 per cent in shares after three years through the IADP.
64

32 Share-based payments continued
e Share-based payment schemes summary
16,339
–
6,263
944
9,132
4,166
40,334
24,462
5,152
431
59,213
–
27,705
5,681
3,786
–
29,600
–
2,411
1,007
173
2,387
858
–
86,789
31,150
15,374
3,762
98,803
4,166
The weighted average share price at the date of exercise of options exercised during the year to 31 December 2023 was £1.52 (2022:
£1.35).
The Group recognised a share-based payment charge of €52 million for the year to 31 December 2023 (2022: €39 million).
33 Other reserves and non-controlling interests
For the year to 31 December 2023
losses
1
1 January 2023
67
(66)
(118)
(2,467)
867
(1,717)
6
Fuel and oil costs
(81)
–
–
–
–
(81)
–
Currency differences
(20)
–
–
–
–
(20)
–
Finance costs
(35)
–
–
–
–
(35)
–
Ineffectiveness recognised in other non-
operating costs
(6)
–
–
–
–
(6)
–
Net change in fair value of cash flow hedges
(195)
–
–
–
–
(195)
–
investments
127
–
–
–
–
127
–
Net change in fair value of cost of hedging
–
(120)
–
–
–
(120)
–
profit
–
82
–
–
–
82
–
Fair value movements on liabilities attributable to
credit risk changes
(119)
–
–
–
–
(119)
–
Currency translation differences
–
–
18
–
–
18
–
Hedges transferred and reported in property,
plant and equipment
9
(15)
–
–
–
(6)
–
Hedges transferred and reported in sales in
advance of carriage
84
1
–
–
–
85
–
Hedges transferred and reported in inventory
(9)
–
–
–
–
(9)
–
31 December 2023
(178)
(118)
(100)
(2,467)
867
(1,996)
6
2
3
5
6
65

1 January 2022
(94)
24
(65)
62
(2,467)
867
(1,673)
6
Cash flow hedges reclassified and
reported in net profit:
Fuel and oil costs
(1,115)
–
–
–
–
–
(1,115)
–
Currency differences
(90)
–
–
–
–
–
(90)
–
Finance costs
10
–
–
–
–
–
10
–
accounting
(22)
–
–
–
–
–
(22)
–
Ineffectiveness recognised in other
non-operating costs
(16)
–
–
–
–
–
(16)
–
hedges
1,472
–
–
–
–
–
1,472
–
Net change in fair value of other
equity investments
2
–
–
–
–
–
2
–
Net change in fair value of cost of
hedging
–
(115)
–
–
–
–
(115)
–
Cost of hedging reclassified and
reported in net profit
–
38
–
–
–
–
38
–
attributable to credit risk changes
(6)
–
–
–
–
–
(6)
–
Currency translation differences
–
–
(53)
–
–
–
(53)
–
Hedges transferred and reported in
property, plant and equipment
(51)
(14)
–
–
–
–
(65)
–
Hedges transferred and reported in
sales in advance of carriage
35
1
–
–
–
–
36
–
Hedges transferred and reported in
inventory
(58)
–
–
–
–
–
(58)
–
Redemption of convertible bond
–
–
–
(62)
–
–
(62)
–
31 December 2022
67
(66)
(118)
–
(2,467)
867
(1,717)
6
1
2
3
4
5
6
1 The unrealised gains and losses reserve records fair value changes on equity investments and the portion of the amounts on hedging instruments in
cash flow hedges that are determined to be effective hedges. The amounts at 31 December 2023 that relate to the fair value changes on equity
instruments and to the cash flow hedge reserve were €138 million credit and €305 million charge, respectively.
2 The cost of hedging reserve records, amongst others, changes on the time value of options.
3 The currency translation reserve records exchange differences arising from the translation of the financial statements of non-euro functional currency
subsidiaries and investments accounted for under the equity method into the Group’s reporting currency of euros. The movement through this
reserve is affected by the fluctuations in the pound sterling to euro foreign exchange translation rate.
4 During 2022, the Group redeemed the €500 million convertible bond with no conversion into ordinary shares. On redemption, an amount of €62
million was transferred to Retained earnings.
5 The merger reserve originated from the merger transaction between British Airways and Iberia. The balance represents the difference between the
fair value of the Group on the transaction date, and the fair value of Iberia and the book value of British Airways (including its reserves).
6 Capital reserves include a Redeemed capital reserve of €70 million (2022: €70 million) associated with the decrease in share capital relating to
cancelled shares and a Share capital reduction reserve of €797 million (2022: €797 million) associated with a historical reduction in the nominal value
of the Company’s share capital.
66

34 Employee benefit obligations
The Group operates a variety of post-employment benefit arrangements, covering both defined contribution and defined benefit
schemes. The Group also has a scheme for flight crew who meet certain conditions and therefore have the option of being placed on
reserve and retaining their employment relationship until reaching the statutory retirement age, or taking early retirement (see note
27).
Defined contribution schemes
The Group operates a number of defined contribution schemes for its employees.
Costs recognised in respect of defined contribution pension plans in Spain, UK and Ireland for the year to 31 December 2023 were
€279 million (2022: €251 million).
Defined benefit schemes
The principal funded defined benefit pension schemes within the Group are the Airways Pension Scheme (APS) and the New
Airways Pension Scheme (NAPS), both of which are in the UK and are closed to new members.
APS has been closed to new members since 1984, but remains open to future accrual. The benefits provided under APS are based on
final average pensionable pay and, for the majority of members, are subject to inflationary increases in payment.
NAPS has been closed to new members since 2003 and closed to future accrual since 2018. Following closure, members’ deferred
pensions are increased annually by inflation up to 5 per cent per annum (measured using the Government’s annual Pension Increase
(Review) Orders, which since 2011 have been based on CPI).
APS and NAPS are governed by separate Trustee Boards. Although APS and NAPS have separate Trustee Boards, certain aspects of
the business of the two schemes are common. APS and NAPS have developed certain joint working groups that are attended by the
Trustee Board members of each scheme although each Trustee Board reaches its decisions independently. There are sub-
committees which are separately responsible for the governance, operation and investments of each scheme. British Airways
Pension Trustees Limited holds the assets of both schemes on behalf of their respective Trustees.
Triennially, the Trustees of APS and NAPS undertake actuarial valuations, which are subsequently agreed with British Airways to
determine the cash contributions and any deficit payment plans through to the next valuation date, as well as ensuring that the
schemes have sufficient funds available to meet future benefit payments to members. These actuarial valuations are prepared using
the principles set out in UK Pension legislation. This differs from the IAS 19 ‘Employee benefits’ valuation, which is used for deriving
the Income statement and Balance sheet positions and uses a best-estimate approach overall. The different purpose and principles
lead to different assumptions being used, and therefore a different estimate for the liabilities and funding levels.
During 2022, the triennial valuations, as at 31 March 2021, were finalised for APS and NAPS which resulted in a technical surplus of
€343 million (£295 million) for APS and a technical deficit of €1,887 million (£1,650 million) for NAPS. The actuarial valuations
performed for APS and NAPS are different to the valuation performed as at 31 December 2023 under IAS 19 ‘Employee Benefits’
mainly due to timing differences of the measurement dates and to the specific scheme assumptions in the actuarial valuation
performed as at 31 March 2021 compared with IAS 19 requirements used in the accounting valuation assumptions as at the reporting
date. The actuarial valuation of neither APS and NAPS is updated outside of the triennial valuations, making comparability between
the scheme liabilities applying the principles set out in the UK Pension legislation and the requirements of IAS 19 not possible. The
principal difference relates to the discount rate applied, which under the triennial actuarial valuation, aligns with a prudent estimate
of the future investment returns on the assets of the respective schemes, whereas, under IAS 19, the rates are based on high-quality
corporate bond yields, regardless of how the assets are invested.
The triennial valuation as at 31 March 2021 for NAPS supersedes the previous agreements reached in 2020 and 2021 between British
Airways and the Trustee of NAPS relating to the deferral of deficit contributions. The deferred deficit contributions have been
incorporated into the deficit payment plan agreed as part of the triennial valuation as at 31 March 2021.
As part of the triennial valuation as at 31 March 2021 for NAPS, British Airways has agreed to provide certain property assets as
security, which will remain in place until 30 September 2028.
Other plans
British Airways also operates post-retirement schemes in a number of jurisdictions outside of the UK. The principal scheme is the
British Airways Plc Pension Plan (USA) based in the United States and referred to as the ‘US Plan’. The US Plan is considered to be a
defined benefit scheme and is closed to new members and to future accrual.
The majority of British Airways’ other plans are fully funded, but there are also a number of unfunded plans, for which the Group
meets the benefit payment obligations as they fall due.
In addition, Aer Lingus operates certain defined benefit plans, both funded and unfunded.
67

Risk associated with the defined benefit schemes
The defined benefit schemes expose the Group to a range of risks, with the following being the most significant:
• asset volatility risk - the scheme obligations are calculated using a discount rate set with reference to high-quality corporate bond
yields. If scheme assets underperform this yield, this will reduce the surplus / increase the deficit, depending on the scheme.
Certain of the schemes hold a significant proportion of equities, which are expected to outperform corporate bonds in the long
term while creating volatility and risk in the short term;
• longevity risk – the majority of the scheme obligations are to provide benefits over the life of the scheme members. An increase in
life expectancy will result in a corresponding increase in the defined benefit obligation;
• interest rate risk – a decrease in interest rates will increase plan liabilities, although this will be partially offset by an increase in the
value of certain of the scheme assets;
• inflation risk – a significant proportion of the scheme obligations are linked to inflation, such that any increase in inflation will cause
an increase in the obligations. While certain of the scheme assets are indexed to inflation, any expected increase in the scheme
assets from inflation would be disproportionately lower than the increase in the scheme obligations; and
• currency risk – a number of scheme assets are denominated in currencies other than the pound sterling. Weakening of those
currencies, or strengthening of the pound sterling, in the long term, will have the effect of reducing the value of scheme assets.
a Cash payments and funding arrangements
Cash payments in respect to pension obligations comprise normal employer contributions by the Group and deficit contributions
based on the agreed deficit payment plan with NAPS. Total payments for the year to 31 December 2023 net of service costs made
by the Group were €48 million (2022: €20 million) being the employer contributions of €49 million (2022: €22 million) less the
current service cost of €1 million (2022: €2 million) (note 34b,c).
Future funding arrangements
Pension contributions for APS and NAPS were determined by actuarial valuations made at 31 March 2021, using assumptions and
methodologies agreed between the Group and Trustee of each scheme.
In total, the Group expects to pay €1 million in employer contributions to APS and NAPS in 2024.
The following graph provides the undiscounted benefit payments to be made by the Trustees of APS and NAPS over the remaining
expected duration of the schemes:
Projected benefit payments from the reporting date (€ million, unaudited)
2024 2029 2034 2039 2044 2049 2054 2059 2064 2069 2074 2079 2084 2089
0
100
200
300
400
500
600
700
800
900
n
APS
n
NAPS
The amounts and timing of these projected benefit payments are subject to the aforementioned risks to the schemes.
Deficit contributions
At the date of the actuarial valuation, the actuarial deficit of NAPS amounted to €1,887 million. In order to address the deficit in the
scheme, the Group committed to deficit contribution payments through to 30 June 2023, amounting to approximately €58 million
per year, increasing by €58 million each year up to 30 June 2026 and subsequently capped at €257 million per year through to 31
May 2032. The deficit contribution plan includes an over-funding protection mechanism, based on the triennial valuation
methodology for measuring the deficit, whereby deficit contributions are suspended if the funding position reaches 100 per cent,
with a mechanism for contributions to resume if the contribution level subsequently falls below 100 per cent, or until such point as
the scheme funding level reaches 100 per cent.
During the year ended and as at 31 December 2023, the NAPS funding position exceeded 100 per cent and accordingly
deficit contributions were suspended. At 31 December 2023, the valuation of the funding level incorporates significant forward-
looking assumptions, such that the Group currently does not expect to make further deficit contributions. Given the long-term
nature of the NAPS scheme, these assumptions are subject to uncertainty and there can be no guarantee that deficit contributions
will not resume in the future or that additional deficit contributions will not need to be incorporated into future triennial
actuarial valuations.
At 31 December 2023, had the over-funding protection mechanism not been applied, then the asset ceiling adjustment (as detailed
in note 34c) would have been €638 million higher, reducing the surplus accordingly.
68

34 Employee benefit obligations continued
At
31 December 2023
, the Group is committed to the following undiscounted deficit payments, which are deductible for tax
purposes at the statutory rate of tax:
1
€ million
NAPS
–
36
–
37
–
38
–
–
–
111
1 Committed deficit contributions, agreed as part of the 31 March 2021 actuarial valuation, were suspended at 31 December 2023 as an effect of the
over-funding protection mechanism.
Deficit payments in respect of local arrangements outside of the UK have been determined in accordance with local practice.
Under the triennial valuation of NAPS as at 31 March 2021, in the period up to 31 December 2023, no dividend payment was
permitted from British Airways to IAG. In the period from 1 January to 31 December 2024, any dividends paid by British Airways will
be matched by contributions to NAPS of 50 per cent of the value of dividends paid. In the period from 1 January to 30 September
2025, any dividend payment from British Airways to IAG that exceeds 50 per cent of the pre-exceptional profit after tax in each
financial year will require additional payments to be made to NAPS if the scheme is not at least 100 per cent funded. All dividend
restrictions cease from 1 October 2025, onwards. British Airways must maintain a minimum cash level of €1,854 million (£1,600
million) as at the date of the declaration of any dividends as well as immediately following the payment of any dividends to IAG and
the associated matching contributions to NAPS. The amount of any deficit contributions and dividend matching contributions in a
single financial year is limited to €348 million (£300 million).
b Employee benefit scheme amounts recognised in the financial statements
i Amounts recognised on the Balance sheet
€ million
APS
NAPS
Other
Total
6,070
16,724
393
23,187
(6,048)
(14,644)
(547)
(21,239)
22
2,080
(154)
1,948
(7)
(728)
–
(735)
–
–
(8)
(8)
15
1,352
(162)
1,205
1
1
2
3
€ million
APS
NAPS
Other
Total
6,283
17,029
356
23,668
(6,052)
(13,692)
(548)
(20,292)
231
3,337
(192)
3,376
(80)
(1,168)
–
(1,248)
–
–
(11)
(11)
151
2,169
(203)
2,117
1
1
2
3
1 Includes Additional Voluntary Contributions (AVCs), which the Trustees hold as assets to secure additional benefits on a defined contribution basis
for those members who elect to make such AVCs. At 31 December 2023, such assets were €322 million (2022: €320 million) with a corresponding
amount recorded in the scheme liabilities.
2 APS and NAPS have an accounting surplus under IAS 19, which would be available to the Group as a refund upon wind up of the scheme. This refund
is restricted due to withholding taxes that would be payable by the Trustee arising on both the net pension asset and the future contractual minimum
funding requirements.
3 The net deferred tax asset recognised on the net employee benefit asset (2022: asset) was €48 million at 31 December 2023 (2022: €54 million). The
defined benefit obligation includes €20 million (2022: €21 million) arising from unfunded plans.
69

ii Amounts recognised in the Income statement
Pension costs charged to operating result are:
€ million
2023
2022
1
2
17
19
18
21
279
251
297
272
€ million
2023
2022
(1,117)
(633)
955
584
59
23
(103)
(26)
iii Amounts recognised in the Statement of other comprehensive income
€ million
2023
2022
857
9,360
314
(10,476)
55
(202)
430
627
(583)
14
–
6
1,073
(671)
3
9
1,076
(662)
c Fair value of scheme assets
i Investment strategies
For both APS and NAPS, the Trustee has ultimate responsibility for decision-making on investments matters, including the asset-
liability matching strategy. The latter is a form of investing designed to match the movement in pension plan assets with the
movement in the projected benefit obligation over time. The Trustees’ investment committee adopts an annual business plan which
sets out investment objectives and work required to support achievement of these objectives. The committee also deals with the
monitoring of performance and activities, including work on developing the strategic benchmark to improve the risk return profile of
the scheme where possible, as well as having a trigger-based dynamic governance process to be able to take advantage of
opportunities as they arise. The investment committee reviews the existing investment restrictions, performance benchmarks and
targets, as well as continuing to develop the de-risking and liability hedging portfolio.
Both schemes use derivative instruments for investment purposes and to manage exposures to financial risks, such as interest rate,
foreign exchange, longevity and liquidity risks arising in the normal course of business. Exposure to interest rate risk is managed
through the use of Inflation-Linked Swap contracts. Foreign exchange forward contracts are entered into to mitigate the risk of
currency fluctuations. Longevity risk is managed through the use of buy-in insurance contracts, asset swaps and longevity swaps.
Along with existing contracts with Rothesay Life (as detailed in note 34c(iii)), APS is 90 per cent protected against all longevity risk
and fully protected in relation to all pensions that were already being paid as at 31 March 2018. APS is nearly 90 per cent protected
against interest rates and inflation (on a Retail Price Index basis). NAPS is 95 per cent protected against interest rates and inflation
(on a Consumer Price Index basis).
The assets held by APS and NAPS are split between ‘return seeking assets’ and ‘liability matching assets’ depending on the maturity
of each scheme. At 31 December 2023, the actual asset allocation for NAPS was 19 per cent (2022: 31 per cent) in return seeking
assets and 81 per cent (2022: 69 per cent) in liability matching investments. For NAPS, the Trustee agreed an updated investment
framework with British Airways as part of the Scheme’s 31 March 2021 actuarial valuation agreement. The Trustee aims towards an
overall asset allocation with an agreed modest expected return relative to liabilities, and sufficient liquidity to manage investment
risk appropriately on an on-going basis. The actual asset allocation for APS at 31 December 2023 was 1 per cent (2022: 1 per cent) in
return seeking assets and 99 per cent (2022: 99 per cent) in liability matching investments. NAPS uses Liability Driven Investments
(LDIs) to effectively hedge volatility in the scheme liabilities. This is achieved through direct bond holdings as opposed to the use of
derivatives and as such leverage is low. Accordingly, as at 31 December 2023, NAPS has not been required to raise additional cash or
liquidate existing assets in order to fund derivative positions.
70

34 Employee benefit obligations continued
ii Movement in scheme assets
A reconciliation of the opening and closing balances of the fair value of scheme assets is set out below:
€ million
2023
2022
23,668
34,370
1,114
633
(14)
(13)
(857)
(9,360)
49
22
8
6
(1,065)
(1,301)
284
(689)
23,187
23,668
1
1 Includes employer contributions to APS of €1 million (2022: €1 million) and to NAPS of €nil (2022: €nil) of which deficit-funding payments
represented €nil for APS (2022: €nil) and €nil for NAPS (2022: €nil).
iii Composition of scheme assets
Scheme assets held by the Group at 31 December comprise:
€ million
APS
NAPS
Other
Total
2022
8
109
6
123
139
1
438
163
602
1,047
29
677
15
721
1,566
–
1,577
14
1,591
2,142
35
1,695
2
1,732
1,881
73
4,496
200
4,769
6,775
861
5,132
127
6,120
5,279
874
9,438
8
10,320
8,093
899
–
–
899
1,114
3,353
–
38
3,391
3,392
5,987
14,570
173
20,730
17,878
Other
Cash and cash equivalents
50
640
7
697
684
(38)
(2,985)
8
(3,015)
(1,688)
(2)
3
5
6
19
10
(2,342)
20
(2,312)
(985)
6,070
16,724
393
23,187
23,668
The fair values of the Group’s scheme assets, which are not derived from quoted prices on active markets, are determined
depending on the nature of the inputs used in determining the fair values (see note 30b for further details) and using the following
methods and assumptions:
• private equities are valued at fair value based on the most recent transaction price or third-party net asset, revenue or earnings-
based valuations that generally result in the use of significant unobservable inputs. The dates of these valuations typically precede
the reporting date and have been adjusted for any cash movements between the date of the valuation and the reporting date.
Typically, the valuation approach and inputs for these investments are not updated through to the reporting date unless there are
indications of significant market movements.
• properties are valued based on an analysis of recent market transactions supported by market knowledge derived from third-
party professional valuers that generally result in the use of significant unobservable inputs.
• alternative investments fair values, which predominantly include holdings in investment and infrastructure funds are determined
based on the most recent available valuations applying the Net Asset Value methodology and issued by fund administrators or
investment managers and adjusted for any cash movements having occurred from the date of the valuation to the reporting date.
The dates of these valuations typically precede the reporting date and have been adjusted for any cash movements between the
date of the valuation and the reporting date. Typically, the valuation approach and inputs for these investments are not updated
through to the reporting date unless there are indications of significant market movements.
• other investments predominantly includes: interest receivable on bonds; dividends from listed and private equities that have been
declared but not received at the balance sheet date; receivables from the sale of assets for which the proceeds have not been
collected at the balance sheet date; and payables for the purchase of assets which have not been settled at the balance sheet
date.
71

• derivative financial instruments are entered into predominantly to mitigate interest rate and inflation rate risks. These derivative
financial instruments are stated at their fair value using pricing models and relevant market data as at the balance sheet date.
• asset and longevity swaps - APS has a contract with Rothesay Life, entered into in 2010 and extended in 2013, which covers 25 per
cent (2022: 25 per cent) of the pensioner liabilities for an agreed list of members. Under the contract, to reduce the risk of long-
term longevity risk, Rothesay Life makes benefit payments monthly in respect of the agreed list of members in return for the
contractual return receivable on a portfolio of assets (made up of quoted government debt) held by the scheme and the
contractual payments made by APS to Rothesay Life on the longevity swaps. The Group holds the portfolio of assets at their fair
value, with the government debt held at their quoted market price and the swaps accounted for at their estimated discounted
future cash flows.
During 2011, APS entered into a longevity swap with Rothesay Life, which covers an additional 21 per cent (2022: 21 per cent) of
the pensioner liabilities for the same agreed list of members as the 2010 contract. Under the longevity swap, to reduce the risk of
long-term longevity risk, APS makes a fixed payment to Rothesay Life each month reflecting the prevailing mortality assumptions
at the inception of the contract, and Rothesay Life make a monthly payment to APS reflecting the actual monthly benefit
payments to members. The cash flows are settled net each month. If pensioners live longer than expected at inception of the
longevity swap, Rothesay Life will make payments to the scheme to offset the additional cost of paying pensioners and if
pensioners do not live as long as expected, then the scheme will make payments to Rothesay Life. The Group holds the longevity
swap at fair value, determined at the estimated discounted future cash flows.
• insurance contract - During 2018 the Trustee of APS secured a buy-in contract with Legal & General. The buy-in contract covers all
members in receipt of pensions from APS at 31 March 2018, excluding dependent children, receiving a pension at that date and
members in receipt of equivalent pension only benefits, who were alive on 1 October 2018. Benefits coming into payment for
retirements after 31 March 2018 are not covered. The contract covers benefits payable from 1 October 2018 onwards. The policy
covers approximately 60 per cent of all benefits APS expects to pay out in future.
iv Effect of the asset ceiling
In measuring the valuation of the net defined benefit asset for each scheme, the Group limits such measurement to the lower of the
surplus in each scheme and the respective asset ceiling. The asset ceiling represents the present value of the economic benefits
available in the form of a refund or a reduction in future contributions after they are paid into the plan. The Group has determined
that the recoverability of such surpluses, including minimum funding requirements, will be subject to withholding taxes in the UK,
payable by the Trustee, of 35 per cent.
The future committed NAPS deficit contributions, as detailed in note 34a, are treated as minimum funding requirements under IAS 19
and are not recognised as part of the scheme assets or liabilities. The Group has determined that upon the wind up of the scheme,
that if the scheme is in surplus, including the incorporation of the minimum funding requirements, then the surplus will be available
as a refund or a reduction in future contributions after they are paid into the scheme. The recovery of such amounts is subject to UK
withholding tax payable by the Trustee. In measuring the recoverability of the surplus for each scheme, the Group limits such
measurement to the lower of the surplus in each scheme and the respective asset ceiling. The asset ceiling represents the present
value of the economic benefits available upon wind up of the scheme, less the application of withholding taxes in the UK, payable by
the Trustee, at 35 per cent.
A reconciliation of the effect of the asset ceiling used in calculating the IAS 19 irrecoverable surplus in APS and NAPS is set out
below:
€ million
2023
2022
1,248
1,247
59
23
(583)
14
11
(36)
735
1,248
On 22 November 2023, the UK Government announced that it intended to reduce the withholding tax payable upon winding up of
pension schemes from 35 per cent to 25 per cent. While this change had not been substantively enacted at the reporting date and
as such not reflected in the figures above, had the rate of withholding tax been reduced to 25 per cent at 31 December 2023, the
effect would have been to reduce the effect of the asset ceiling by €210 million to €525 million, with a corresponding increase in the
net employee benefit asset.
72

34 Employee benefit obligations continued
d Present value of scheme liabilities
i Movement in scheme liabilities
A reconciliation of the opening and closing balances of the present value of the defined benefit obligations is set out below:
€ million
2023
2022
20,292
31,622
1
2
952
584
314
(10,476)
55
(202)
430
627
(1,065)
(1,301)
8
6
252
(570)
21,239
20,292
1
1 Included in the remeasurements from financial assumptions is an amount of €670 million (2022: increase of €10,299 million) that increases the
scheme liabilities relating to changes in the discount rates and €356 million (2022: increase of €177 million) that reduces the scheme liabilities relating
to changes in inflation rates.
ii Scheme liability assumptions
The principal assumptions used for the purposes of the IAS 19 valuations were as follows:
2023
2022
Per cent per annum
APS
NAPS
APS
NAPS
4.50
4.55
1.0 - 7.1
4.85
4.80
0.8 - 7.2
3.20
–
2.0 - 5.0
3.40
–
2.0 - 6.0
3.20
2.65
0.7 - 3.4
3.40
2.80
0.3 - 3.0
3.20
3.00
2.2 - 2.9
3.40
3.20
2.2 - 3.1
2.65
2.65
2.0 - 2.5
2.80
2.80
2.0 - 2.6
4
4
1
2
3
1 Discount rate is determined by reference to the yield on high quality corporate bonds of currency and term consistent with the scheme liabilities.
2 Rate of increase in pensionable pay, which reflects inflationary increases, is assumed to be in line with increases in RPI.
3 It has been assumed that the rate of increase of pensions in payment, which reflects inflationary increases, will be in line with CPI for NAPS and RPI
for APS as at 31 December 2023.
4 The rate of increase in healthcare costs for schemes based in the United States, which is based on medical trends, is assumed at 7.00 per cent
grading down to 5.00 per cent over six years (2022: 6.25 per cent to 5.00 per cent over five years).
The current longevities underlying the values of the scheme liabilities were as follows:
Mortality assumptions
2023
2022
For APS, the base mortality tables are based on the Agreed Valuation Basis (AVB) as agreed between British Airways and the
trustees of APS. For NAPS, the base mortality tables are based on analysis undertaken for the purpose of the triennial valuation
dated 31 March 2021. Future mortality improvements reflect the most recent model published by the UK actuarial profession’s
Continuous Mortality Investigation (CMI), being its 2022 model. These standard mortality tables, for both APS and NAPS, incorporate
adjustments specific to the demographics of scheme members, including a long-term improvement parameter of 1.00 per cent per
annum (2022: 1.00 per cent).
For schemes in the United States, mortality rates were based on the MP-2021 mortality tables incorporating adjustments for the
long-term impact COVID-19 is expected to have on mortality.
At 31 December 2023, the weighted-average duration of the defined benefit obligation was 9 years for APS (2022: 10 years) and 14
years for NAPS (2022: 15 years). The weighted average duration of the defined benefit obligations was 2 to 16 years for other
schemes (2022: 3 to 19 years). The weighted average duration represents a single figure for the average number of years over which
the employee benefit liability discounted cash flows is extinguished and is highly dependent on movements in the aforementioned
discount rates.
73

iii Sensitivity analysis
Reasonable possible changes at the reporting date to significant valuation assumptions, holding other assumptions constant, would
have affected the present value of scheme liabilities by the amounts shown:
€ million
APS
NAPS
278
1,020
29
243
973
5
301
394
22
1
1
1 Sensitivities smaller than those disclosed can be approximately interpolated from those sensitivities above.
Although the analysis does not take into account the full distribution of cash flows expected under the plan, it does provide an
approximation of the sensitivity of the assumptions shown.
35 Supplemental cash flow information
a Reconciliation of movements of liabilities to cash flows arising from financing activities
liabilities
Total
9,760
605
9,619
(71)
19,913
1,001
–
–
–
1,001
(4,268)
–
–
–
(4,268)
–
–
(1,731)
–
(1,731)
–
–
–
(119)
(119)
(3,267)
–
(1,731)
(119)
(5,117)
(488)
(9)
(472)
44
(925)
476
9
508
–
993
–
–
1,315
–
1,315
–
130
–
322
452
1
–
(13)
(2)
(14)
(102)
–
(259)
6
(355)
6,380
735
8,967
180
16,262
bond
2
liabilities
Total
9,217
756
9,637
(136)
19,474
1,436
–
–
–
1,436
(1,050)
–
–
–
(1,050)
–
–
(1,455)
–
(1,455)
–
–
–
1,036
1,036
386
–
(1,455)
1,036
(33)
(325)
(9)
(422)
(7)
(763)
368
9
464
–
841
–
–
1,017
–
1,017
–
(151)
–
(990)
(1,141)
11
–
(37)
–
(26)
103
–
415
26
544
9,760
605
9,619
(71)
19,913
2
1
1
1 The 2022 reconciliation includes a reclassification of €7 million from the Settlement of derivative financial instruments to Interest paid to reflect the
settlement loss arising on interest rate derivatives designated in hedge relationships. The reclassification of the settlement loss aligns with the
classification within Net cash flows from operating activities in the Cash flow statement.
2 The 2022 reconciliation includes a reclassification to conform with the 2023 presentation, whereby, the 2028 convertible bond has been disclosed
separately from the Bank, other loans and asset financed liabilities category. The reclassification resulted in an amount of €735 million and €605
million being recorded within the 2028 convertible bond at 1 January 2022 and 31 December 2022, respectively.
74

35 Supplemental cash flow information continued
b Reconciliation of movement in provisions included within Net cash flows from operating activities
€ million
2023
2022
Opening provisions
3,548
2,999
862
896
(133)
(137)
4
27
(496)
(323)
237
463
24
(69)
(6)
(15)
(68)
127
(98)
(10)
103
53
3,740
3,548
c Other items included within Net cash flows from operating activities
€ million
2023
2022
50
36
6
17
16
45
44
(7)
(5)
(15)
111
76
d Details of acquisition of property, plant and equipment and intangible assets within Net cash flows from investing activities
€ million
2023
2022
2,715
3,146
193
132
264
360
372
237
3,544
3,875
e Details of cash flows arising from lease transactions presented in the Cash flow statement
€ million
2023
2022
(2,076)
(1,699)
(127)
(178)
826
718
(25)
(41)
(999)
1,424
(416)
(292)
75

36 Related party transactions
The following transactions took place with related parties for the financial years to 31 December:
€ million
2023
2022
5
5
261
141
72
61
131
113
18
13
136
25
6
–
12
26
1
2
3
2
4
5
6
5
1 Sales to associates: Consisted primarily of sales for airline-related services to Dunwoody Airline Services (Holding) Limited (Dunwoody) of €4 million
(2022: €4 million) and €1 million (2022: €1 million) to Serpista, S.A. and Multiservicios Aeroportuarios, S.A.
2 Sales to and purchases from significant shareholders principally relates to interline services, the purchase of cargo capacity, the provision of
maintenance services and the income from licensing of the Avios brand with Qatar Airways (Q.C.S.C.).
3 Purchases from associates: Consisted primarily of €41 million of airport auxiliary services purchased from Multiservicios Aeroportuarios, S.A. (2022:
€35 million), €13 million of handling services provided by Dunwoody (2022: €14 million) and €17 million of maintenance services received from
Serpista, S.A. (2022: €13 million).
4 Amounts owed by associates: Consisted primarily of €17 million from a long-term loan provided to LanzaJet, Inc. (2022: €12 million) and €1 million of
services provided to Multiservicios Aeroportuarios, S.A., Serpista, S.A., Dunwoody, Empresa Hispano Cubana de Mantenimiento de Aeronaves, Ibeca,
S.A., Empresa Logística de Carga Aérea, S.A., Sociedad Conjunta para la Emisión y Gestión de Medios de Pago, EFC, S.A. and Viajes AME, S.A.U.
(2022: €1 million).
5 Amounts owed by and to significant shareholders related to Qatar Airways (Q.C.S.C.).
6 Amounts owed to associates: Consisted primarily of €2 million of maintenance of airport equipment to Serpista, S.A. (2022: €nil) and €3 million of
auxiliary airport services to Multiservicios Aeroportuarios, S.A. and Dunwoody (2022: €nil).
During the year to 31 December 2023 British Airways met certain costs of administering its retirement benefit plans, including the
provision of support services to the Trustees. Costs borne on behalf of the retirement benefit plans amounted to €1 million (2022: €2
million) in relation to the costs of the Pension Protection Fund levy.
The Group has transactions with related parties that are conducted in the normal course of the airline and loyalty operating
companies, which include the provision of airline and related services and loyalty services. All such transactions are carried out on an
arm’s length basis.
During the course of 2022, the Group renewed its loyalty currency exchange agreement with Qatar Airways (Q.C.S.C.), where Avios
could be exchanged for points within the Qatar Airways (Q.C.S.C.)’s loyalty programme, the Privilege Club. In addition, in renewing
the agreement, IAG Loyalty licensed the Avios brand name for use within the Privilege Club.
During the course of 2023, the Group provided a long-term shareholder loan of €5 million ($5 million) to LanzaJet, Inc., in addition to
the initial long-term shareholder loan of €12 million ($14 million) provided to LanzaJet, Inc. in 2022. LanzaJet, Inc. is a company which
specialises in the generation of Sustainable Aviation Fuels of which the Group has a 16.7 per cent equity interest, classified as an
associate and presented within Investments accounted for using the equity method in the Balance sheet.
For the year to 31 December 2023, the Group has not made any provision for expected credit loss arising relating to amounts owed
by related parties (2022: €nil).
76

36 Related party transactions continued
Significant shareholders
In this instance, significant shareholders are those parties who have the power to participate in the financial and operating policy
decisions of the Group, as a result of their shareholdings in the Group, but who do not have control over these policies. At 31
December 2023, the only significant shareholder of the Group was Qatar Airways (Q.C.S.C.).
At 31 December 2023 the Group had cash deposit balances with shareholders holding a participation of between 3 to 5 per cent, of
€nil (2022: €nil).
Board of Directors and Management Committee remuneration
Compensation received by the Group’s Board of Directors and Management Committee, in 2023 and 2022 is as follows:
€ million
2023
2022
4
4
1
1
15
15
–
2
For the year to 31 December 2023, the Board of Directors includes remuneration for one Executive Director (31 December 2022: one
Executive Director). The Management Committee includes remuneration for 14 members (31 December 2022: 14 members), and
excludes remuneration for the one Executive Director.
The Company provides life insurance for the Executive Director and all members of the Management Committee. For the year to 31
December 2023, the Company’s obligation was €45,000 (2022: €38,000).
At 31 December 2023 the transfer value of accrued pensions covered under defined benefit pension obligation schemes, relating to
the current members of the Management Committee totalled €4 million (2022: €5 million).
No loan or credit transactions were outstanding with Directors or officers of the Group at 31 December 2023 (2022: €nil).
37 Change in presentation of the Cash flow statement
During the course of 2023, the Group has made a number of changes to the presentation of its Cash flow statement. These changes
have been applied retrospectively to the Cash flow statement and are detailed below.
Net gain on sale of property plant and equipment
Previously gains/losses on the sale of property, plant and equipment were recorded in the Income statement within Other non-
operating credits. Under the updated presentation, Net (gain)/loss on sale of property, plant and equipment is presented separately
in the Income statement and included within Operating profit. Accordingly, operating profit included within Net cash flows from
operating activities has been updated. See note 2 for further information.
Unrealised currency differences
Previously all unrealised foreign currency gains/losses arising in the Cash flow statement were recorded within Net foreign exchange
differences. Under the updated presentation, Net foreign exchange differences has been amended to only include those unrealised
currency differences arising from the retranslation of opening cash and cash equivalent balances, while unrealised currency
differences arising from working capital used in operating activities are presented within Net cash flows from operating activities.
Other cash flows from operating activities
Previously movements in working capital balances were presented aggregated between working capital assets and working capital
liabilities. Under the updated presentation working capital balances have been disaggregated by their nature to allow greater
visibility as to the cash flow impacts associated with these balances. There has been no change in the overall total movement in
working capital.
In addition, previously the Group presented the non-cash movements in provisions combined with other non-cash movements.
Under the updated presentation these items have been separated into individual row items within the Cash flow statement.
77

The following table summarises the impact of the changes in presentation in the Cash flow statement for the year to 31 December
2022:
Cash flow statement (extract for the year to 31 December 2022)
€ million
As reported
items
Restated
Operating profit
1,256
22
1,278
Depreciation, amortisation and impairment
2,070
2,070
Net gain on disposal of property, plant and equipment
–
(22)
(22)
Movement in working capital
1,884
(1,884)
–
(Increase)/decrease in trade receivables, inventories and other
current assets
(914)
914
–
revenue
2,798
(2,798)
–
Employer contributions to pension schemes
(22)
(22)
Pension scheme service costs
17
17
Payments related to restructuring
(81)
81
–
Provisions and other non-cash movements
627
(627)
–
Increase in provisions
–
463
463
Unrealised currency differences
–
19
19
Other movements
–
76
76
Interest paid
(824)
7
(817)
Interest received
42
42
Tax paid
(134)
(134)
Net cash flows from operating activities before movements in
working capital
4,835
–
19
(1,884)
2,970
Increase in trade receivables
–
(660)
Increase in inventories
–
(21)
Net cash flows from operating activities
4,835
–
19
–
4,854
Net cash flows from investing activities
(3,463)
–
–
–
(3,463)
Net cash flows from financing activities
(56)
–
–
–
(56)
Net increase in cash and cash equivalents
1,316
–
19
–
1,335
Net foreign exchange differences
(12)
(19)
(31)
Cash and cash equivalents at 1 January
7,892
7,892
Cash and cash equivalents at year end
9,196
–
–
–
9,196
Interest-bearing deposits maturing after more than three months
403
–
–
–
403
Cash, cash equivalents and interest-bearing deposits
9,599
–
–
–
9,599
78

38 Post balance sheet events
Revocation of Royal Decree-Law 3/2016 in Spain
On 18 January 2024 the Tribunal Constitucional (Constitutional Court) in Spain, issued a ruling that a number of the amendments to
corporate income tax arising from the introduction of Royal Decree-Law 3/2016 were unconstitutional and accordingly revoked. The
revocation of Royal Decree-Law 3/2016 impacts the Groups operations as follows:
• Limitation of the use of historic tax losses
Prior to the introduction of Royal Decree-Law 3/2016, the Spanish subsidiaries of the Group were permitted to offset up to 70 per
cent of their taxable profit with historical accumulated tax losses (to the extent there were sufficient tax losses to do so). With the
introduction of the Royal Decree-Law 3/2016, this limitation of tax losses applied to taxable profit was reduced to 25 per cent.
• Tax deductibility of impairments of investment in subsidiary undertakings
Where companies had impaired investments in subsidiaries prior to 2013 and deducted those impairments for tax purposes, Royal
Decree-Law 3/2016 retrospectively required companies to reverse those impairment charges, for tax purposes, with the effect
recognised equally over the five years commencing 1 January 2016.
The Group does not consider that the ruling by the Tribunal Constitucional constitutes an adjusting post-balance sheet event and
accordingly the impact of these changes are not reflected in the financial statements. As at the date of these financial statements,
there remains uncertainty as to how the revocation of Royal Decree-Law 3/2016 will be applied and accordingly the methodology by
which the Group, with its external tax advisors, quantifies the impacts of this revocation. Had the Group reflected the impact of
ruling into the financial statements as at 31 December 2023, the impact would have been as follows:
• Current tax impact of historic loss limitation and deductibility of historic impairments of investments for fiscal years 2016 through
2022
The Royal Decree Law 3/2016 restricted the use of prior year tax losses to 25 per cent of current year profits in the Group's
Spanish companies. In addition, prior to 2013, Iberia impaired its subsidiary undertakings in Venezuela. Had the loss limitation been
70 per cent and the historic impairment been tax deductible, the tax paid to the Spanish tax authorities, would have been up to
approximately €83 million lower. The Group expects to record an associated current tax credit, with a corresponding receivable
from the Spanish tax authorities. The Group is currently assessing the potential interest due, if any, from the Spanish tax authorities
arising on this receivable.
• Current tax impact of loss limitation for fiscal year 2023
The Group measures current tax expense based on the regulations in effect as of the date when corporate income taxes are
accrued. With the change in loss limitation, the Group anticipates the ability to offset up to 70 per cent of their Spanish taxable
profits with prior-year losses for their 2023 Spanish taxes. If this limit had been applied at 31 December 2023 the Group foresees a
reduction in the 2023 current tax expense of approximately €108 million.
• Deferred tax impact of future loss limitation
The Group measures deferred tax assets at the tax rates that are expected to apply when the related asset is realised. As detailed
in note 2, the Group uses future cash flow projections over periods of up to ten years to determine the recoverability of deferred
tax assets. With the change in loss limitation, the Group expects to be able to utilise more of its historical tax losses within this ten-
year period. Had the Royal Decree-Law 3/2016 not applied at 31 December 2023, the Group expects that the deferred tax assets
of the Group, attributable to tax losses and tax credits, would have decreased by approximately €58 million, with a corresponding
charge to Tax in the Income statement.
79

The performance of the Group is assessed using a number of alternative performance measures (APMs), some of which have been
identified as key performance indicators of the Group. These measures are not defined under International Financial Reporting
Standards (IFRS), should be considered in addition to IFRS measurements, may differ to definitions given by regulatory bodies
applicable to the Group and may differ to similarly titled measures presented by other companies. Further information on why these
APMs are used is provided in the Key performance indicators section. They are used to measure the outcome of the Group’s
strategy based on the Group’s strategic imperatives of: strengthening our core; driving earnings growth through asset-light
businesses; and operating under a strengthened financial and sustainability framework.
During 2023, the Group has replaced the Levered free cash flow measure with the Free cash flow measure. The Free cash flow
measure represents the cash generating ability of the Group to support operations and maintain its capital assets. This measure is
monitored by the Group in making both investment and capital decisions. In addition, the Group has added an APM regarding the
Ownership costs of the Group to enable a better understanding of how the capital assets of the Group contribute to the operating
result in each reporting period. Other than the aforementioned change, the Group has made no changes to its pre-existing disclosures
and treatments of APMs compared to those disclosed in the Annual report and accounts for the year to 31 December 2022.
The definition of each APM, together with a reconciliation to the nearest measure prepared in accordance with IFRS is presented below.
a Profit after tax before exceptional items
Exceptional items are those that in the Board’s and management’s view need to be separately disclosed by virtue of their size or
incidence to supplement the understanding of the entity’s financial performance. The Management Committee of the Group uses
financial performance on a pre-exceptional basis to evaluate operating performance and to make strategic, financial and operational
decisions, and externally because it is widely used by security analysts and investors in evaluating the performance of the Group
between reporting periods and against other companies.
While there have been no exceptional items recorded in the year to 31 December 2023, exceptional items in the year to 31 December 2022
include: significant changes in the long-term fleet plans that result in the reversal of impairment of fleet assets and legal reimbursements.
The table below reconciles the statutory Income statement to the Income statement before exceptional items of the Group:
Year to 31 December
€ million
Statutory
2023
Exceptional
items
Before
exceptional
items
2023
Statutory
2022
1
Exceptional
items
Before
exceptional
items
2022
1
Passenger revenue 25,810 – 25,810 19,458 – 19,458
Cargo revenue 1,156 – 1,156 1,615 – 1,615
Other revenue 2,487 – 2,487 1,993 – 1,993
Total revenue 29,453 – 29,453 23,066 – 23,066
Employee costs 5,423 – 5,423 4,647 – 4,647
Fuel, oil costs and emissions charges 7,557 – 7,557 6,120 – 6,120
Handling, catering and other operating costs 3,849 – 3,849 2,971 – 2,971
Landing fees and en-route charges 2,308 – 2,308 1,890 – 1,890
Engineering and other aircraft costs 2,509 – 2,509 2,101 – 2,101
Property, IT and other costs
2
1,058 – 1,058 950 (23) 973
Selling costs 1,155 – 1,155 920 – 920
Depreciation, amortisation and impairment
3
2,063 – 2,063 2,070 (8) 2,078
Net gain on sale of property, plant and equipment
1
(2) – (2) (22) – (22)
Currency differences 26 – 26 141 – 141
Total expenditure on operations 25,946 – 25,946 21,788 (31) 21,819
Operating profit 3,507 – 3,507 1,278 31 1,247
Finance costs (1,113) – (1,113) (1,017) – (1,017)
Finance income 386 – 386 52 – 52
Net change in fair value of financial instruments (11) – (11) 81 – 81
Net financing credit relating to pensions 103 – 103 26 – 26
Net currency retranslation credits/(charges) 176 – 176 (115) – (115)
Other non-operating credits
1
8 – 8 110 – 110
Total net non-operating costs (451) – (451) (863) – (863)
Profit before tax 3,056 – 3,056 415 31 384
Tax (401) – (401) 16 (2) 18
Profit after tax 2,655 – 2,655 431 29 402
1 The 2022 results include a reclassification to conform with the current year presentation for the Net gain on sale of property, plant and equipment.
There is no impact on the Profit after tax. Further information is given in note 2.
Alternative performance measures
80

The rationale for each exceptional item is given below.
2 Partial reversal of historical fine
The exceptional credit of €23 million for the year to 31 December 2022 relates to the partial reversal of the fine, plus accrued interest, initially issued
by the European Commission, in 2010, to British Airways regarding its involvement in cartel activity in the air cargo sector and that had been
recognised as an exceptional charge. The exceptional credit has been recorded within Property, IT and other costs in the Income statement with no
resultant tax charge arising. The cash inflow associated with the partial reversal of the fine was recognised during 2022.
3 Impairment reversal of fleet and associated assets
The exceptional impairment reversal of €8 million for the year to 31 December 2022 relates to six Airbus A320s in Vueling, previously stood down in
the fourth quarter of 2020 and subsequently stood up in the second and third quarters of 2022. The exceptional impairment reversal was recorded
within Right of use assets on the Balance sheet and within Depreciation, amortisation and impairment in the Income statement.
There is no cash flow impact and there has been a tax charge of €2 million on the recognition of the impairment reversal.
The table below provides a reconciliation of the statutory to pre-exceptional condensed alternative income statement by operating
segment for the years to 31 December 2023 and 2022:
Year to 31 December 2023
British Airways (£) British Airways (€) Iberia Vueling Aer Lingus
Million
Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items
Passenger revenue 12,668 – 12,668 14,558 – 14,558 5,262 – 5,262 3,181 – 3,181 2,209 – 2,209
Cargo revenue 757 – 757 869 – 869 275 – 275 – – – 55 – 55
Other revenue 898 – 898 1,032 – 1,032 1,421 – 1,421 17 – 17 10 – 10
Total revenue 14,323 – 14,323 16,459 – 16,459 6,958 – 6,958 3,198 – 3,198 2,274 – 2,274
Employee costs 2,577 – 2,577 2,960 – 2,960 1,284 – 1,284 399 – 399 471 – 471
Fuel, oil costs and
emissions charges 3,825 – 3,825 4,395 – 4,395 1,496 – 1,496 907 – 907 639 – 639
Ownership costs 1,015 – 1,015 1,166 – 1,166 411 – 411 256 – 256 150 – 150
Supplier costs 5,475 – 5,475 6,288 – 6,288 2,827 – 2,827 1,240 – 1,240 789 – 789
Total expenditure on
operations 12,892 – 12,892 14,809 – 14,809 6,018 – 6,018 2,802 – 2,802 2,049 – 2,049
Operating profit 1,431 – 1,431 1,650 – 1,650 940 – 940 396 – 396 225 – 225
Operating margin (%) 10.0% 10.0% 13.5% 13.5% 12.4% 12.4% 9.9% 9.9%
Year to 31 December 2023
IAG Loyalty (£) IAG Loyalty (€)
Million
Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items
Passenger revenue 837 – 837 961 – 961
Other revenue 455 – 455 524 – 524
Total revenue 1,292 – 1,292 1,485 – 1,485
Employee costs 61 – 61 70 – 70
Ownership costs 10 – 10 11 – 11
Supplier costs 941 – 941 1,083 – 1,083
Total expenditure on operations 1,012 – 1,012 1,164 – 1,164
Operating profit 280 – 280 321 – 321
Operating margin (%) 21.7% 21.7%
Alternative performance measures continued
81

Year to 31 December 2022
1
British Airways (£) British Airways (€) Iberia Vueling Aer Lingus
Million
Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items Statutory Exceptional items
Before exceptional items
Statutory Exceptional items Before exceptional items
Passenger revenue 9,215 – 9,215 10,790 – 10,790 4,042 – 4,042 2,584 – 2,584 1,679 – 1,679
Cargo revenue 1,060 – 1,060 1,245 – 1,245 347 – 347 – – – 80 – 80
Other revenue 755 – 755 886 – 886 1,122 – 1,122 14 – 14 10 – 10
Total revenue 11,030 – 11,030 12,921 – 12,921 5,511 – 5,511 2,598 – 2,598 1,769 – 1,769
Employee costs 2,100 – 2,100 2,464 – 2,464 1,161 – 1,161 370 – 370 393 – 393
Fuel, oil costs and
emissions charges 2,929 – 2,929 3,432 – 3,432 1,313 – 1,313 739 – 739 539 – 539
Ownership costs
1
1,081 – 1,081 1,268 – 1,268 364 – 364 206 (8) 214 134 – 134
Supplier costs 4,595 (19) 4,614 5,391 (23) 5,414 2,284 – 2,284 1,088 – 1,088 646 – 646
Total expenditure on
operations
1
10,705 (19) 10,724 12,555 (23) 12,578 5,122 – 5,122 2,403 (8) 2,411 1,712 – 1,712
Operating profit
1
325 19 306 366 23 343 389 – 389 195 8 187 57 – 57
Operating margin (%)
1
2.9% 2.8% 7.1% 7.1% 7.5% 7.2% 3.2% 3.2%
Year to 31 December 2022
IAG Loyalty (£) IAG Loyalty (€)
Million
Statutory Exceptional items Before exceptional items Statutory Exceptional items Before exceptional items
Passenger revenue
569 – 569 676 – 676
Other revenue
274 – 274 325 – 325
Total revenue
843 – 843 1,001 – 1,001
Employee costs
50 – 50 56 – 56
Ownership costs
7 – 7 8 – 8
Supplier costs
546 – 546 655 – 655
Total expenditure on operations
603 – 603 719 – 719
Operating profit
240 – 240 282 – 282
Operating margin (%)
28.4% 28.4%
1 Segment information for 2022 has been restated for the reclassification to conform with the current year presentation for the Net gain on sale of
property, plant and equipment.
b Adjusted earnings per share
(KPI)
Adjusted earnings are based on results before exceptional items after tax and adjusted for earnings attributable to equity holders
and interest on convertible bonds, divided by the weighted average number of ordinary shares, adjusted for the dilutive impact of
the assumed conversion of the bonds and employee share schemes outstanding.
€ million Note 2023 2022
Profit after tax attributable to equity holders of the parent a
2,655 431
Exceptional items a
– 29
Profit after tax attributable to equity holders of the parent before exceptional items
2,655 402
Income statement impact of convertible bonds 11
15 (104)
Adjusted profit
2,670 298
Weighted average number of ordinary shares in issue used for basic earnings per share 11
4,933 4,958
Weighted average number of ordinary shares used for diluted earnings per share 11
5,277 5,344
Basic earnings per share (€ cents)
53.8 8.7
Basic earnings per share before exceptional items (€ cents)
53.8 8.1
Adjusted earnings per share before exceptional items (€ cents)
50.6 5.6
82

c Ownership costs
Ownership costs represents the income statement impact of the historical purchase of capital assets and is defined as depreciation,
amortisation and impairment, arising on both property, plant and equipment and intangible assets, and the net loss/(gain) on the
sale of property, plant and equipment. The Group believes that this measure is useful to the users of the financial statements in
understanding the impact of capital assets in deriving the operating result of the Group.
€ million 2023 2022
Depreciation, amortisation and impairment 2,063 2,070
Net gain on sale of property, plant and equipment (2) (22)
Ownership costs 2,061 2,048
d Airline non-fuel costs per ASK
The Group monitors airline unit costs (per available seat kilometre (ASK), a standard airline measure of capacity) as a means of
tracking operating efficiency of the core airline business. As fuel costs can vary with commodity prices, the Group monitors fuel and
non-fuel costs individually. Within non-fuel costs are the costs associated with generating Other revenue, which typically do not
represent the costs of transporting passengers or cargo and instead represent the costs of handling and maintenance for other
airlines, non-flight products in BA Holidays and costs associated with other miscellaneous non-flight revenue streams. Airline non-
fuel costs per ASK is defined as total operating expenditure before exceptional items, less fuel, oil costs and emission charges and
less non-flight specific costs divided by total available seat kilometres (ASKs), and is shown on a constant currency basis
(abbreviated to ‘ccy’).
€ million Note
2023
Reported
ccy
adjustment 2023 ccy 2022
1
Total expenditure on operations
1
a
25,946 408 26,354 21,788
Add: exceptional items in operating expenditure a
– – (31)
Less: fuel, oil costs and emission charges a
7,557 6 7,563 6,120
Non-fuel costs
1
18,389 402 18,791 15,699
Less: Non-flight specific costs
1
2,141 68 2,209 1,716
Airline non-fuel costs
16,248 334 16,582 13,983
ASKs (millions)
323,111 323,111 263,592
Airline non-fuel unit costs per ASK (€ cents)
5.03 5.13 5.30
1 The 2022 results include a reclassification to conform with the current year presentation for the Net gain on sale of property, plant and equipment.
e Free cash flow
(KPI)
Free cash flow represents the cash generated by the businesses and is defined as the net cash flows from operating activities taken
fromthe Cash flow statement, less the cash flows associated with the acquisition of property, plant and equipment and intangible
assets reported in net cash flows from investing activities from the Cash flow statement. The Group believes that this measure is
useful to the users of the financial statements in understanding the cash generating ability of the Group to support operations and
maintain its capitalassets.
€ million 2023 2022
Net cash flows from operating activities
4,864 4,854
Acquisition of property, plant and equipment and intangible assets
(3,544) (3,875)
Free cash flow
1,320 979
f Net debt to EBITDA before exceptional items
(KPI)
To supplement total borrowings as presented in accordance with IFRS, the Group reviews net debt to EBITDA before exceptional
items to assess its level of net debt in comparison to the underlying earnings generated by the Group in order to evaluate the
underlying business performance of the Group. This measure is used to monitor the Group’s leverage and to assess financial
headroom against internal and external security analyst and investor benchmarks.
Net debt is defined as long-term borrowings (both current and non-current), less cash, cash equivalents and current interest-bearing
deposits. Net debt excludes supply chain financing arrangements which are classified within trade payables (note 23).
EBITDA before exceptional items is defined as operating result before exceptional items, interest, taxation, depreciation,
amortisation andimpairment.
Alternative performance measures continued
83

The Group believes that this additional measure, which is used internally to assess the Group’s financial capacity, is useful to the
users of the financial statements in helping them to see how the Group’s financial capacity has changed over the year. It is a measure
of the profitability of the Group and of the core operating cash flows generated by the business model.
€ million Note 2023 2022
1
Interest-bearing long-term borrowings 26
16,082 19,984
Less: Cash and cash equivalents 22
5,441 9,196
Less: Other current interest-bearing deposits 22
1,396 403
Net debt
9,245 10,385
Operating profit
1
a
3,507 1,278
Add: Depreciation, amortisation and impairment a
2,063 2,070
EBITDA
5,570 3,348
Add: Exceptional items (excluding those reported within Depreciation, amortisation and
impairment) a – (23)
EBITDA before exceptional items
5,570 3,325
Net debt to EBITDA before exceptional items (times)
1.7 3.1
1 The 2022 results include a reclassification to conform with the current year presentation for the Net gain on sale of property, plant and equipment.
g Return on invested capital
(KPI)
The Group monitors return on invested capital (RoIC) as it gives an indication of the Group’s capital efficiency relative to the capital
invested, as well as the ability to fund growth and to pay dividends. RoIC is defined as EBITDA before exceptional items, less fleet
depreciation adjusted for inflation, depreciation of other property, plant and equipment, and amortisation of software intangibles,
divided by average invested capital and is expressed as a percentage.
Invested capital is defined as the average of property, plant and equipment and software intangible assets over a 12-month period
between the opening and closing net book values. The fleet aspect of property, plant and equipment is inflated over the average age
of the fleet to approximate the replacement cost of the associated assets.
€ million Note 2023 2022
1, 2
EBITDA before exceptional items f
5,570 3,325
Less: Fleet depreciation multiplied by inflation adjustment
(1,976) (1,944)
Less: Other property, plant and equipment depreciation
(194) (247)
Less: Software intangible amortisation
(185) (210)
3,215 924
Invested capital
Average fleet value
3
13
16,919 15,717
Less: Average progress payments
4
13
(993) (910)
Fleet book value less progress payments
15,926 14,807
Inflation adjustment
5
1.18 1.18
18,811 17,435
Average net book value of other property, plant and equipment
6
13
2,143 2,037
Average net book value of software intangible assets
7
17
737 640
Total invested capital
21,691 20,112
Return on invested capital
14.8% 4.6%
1 The 2022 results include a reclassification to conform with the current year presentation for the Net gain on sale of property, plant and equipment.
2 The 2022 RoIC calculation excludes the effect of the €29 million credit recorded in Depreciation, amortisation and impairment in the Income
statement relating to the de-designation of hedge accounting (see note 6 of the Group financial statements).
3 The average net book value of aircraft is calculated from an amount of €17,520 million at 31 December 2023 and €16,317 million at 31 December 2022.
4 The average net book value of progress payments is calculated from an amount of €914 million at 31 December 2023 and €1,071 million at 31
December 2022.
5 Presented to two decimal places and calculated using a 1.5 per cent inflation (31 December 2022: 1.5 per cent inflation) rate over the weighted
average age of the fleet at 31 December 2023: 11.0 years (31 December 2022: 11.3 years).
6 The average net book value of other property, plant and equipment is calculated from an amount of €2,256 million at 31 December 2023 and €2,029
million at 31 December 2022.
7 The average net book value of software intangible assets is calculated from an amount of €837 million at 31 December 2023 and €637 million at 31
December 2022.
84

h Results on a constant currency basis
Movements in foreign exchange rates impact the Group’s financial results. The IAG Board and Management Committee review the
results, including revenue and operating costs at constant rates of exchange. These financial measures are calculated at constant
rates of exchange based on a retranslation, at prior year exchange rates, of the current year’s results of the Group. Although the
Board and Management Committee do not believe that these measures are a substitute for IFRS measures, the Board and
Management Committee do believe that such results excluding the impact of currency fluctuations year-on-year provide additional
useful information to investors regarding the Group’s operating performance on a constant currency basis. Accordingly, the financial
measures at constant currency within the discussion of the Group Financial review should be read in conjunction with the
information provided in the Group financial statements.
The following table represents the main average and closing exchange rates for the reporting periods. Where 2023 figures are stated
at a constant currency basis, the 2022 rates stated below have been applied:
Foreign exchange rates
Weighted average Closing
2023 2022 2023 2022
Pound sterling to euro
1.15 1.17 1.16 1.14
Euro to US dollar
1.09 1.05 1.09 1.06
Pound sterling to US dollar
1.26 1.23 1.27 1.21
Alternative performance measures continued
85

Subsidiaries
British Airways
Name and address Principal activity
Country of
Incorporation
Percentage of
equity owned
BA and AA Holdings Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
BA Call Centre India Private Limited (callBA)
F-42, East of Kailash, New-Delhi, 110065
Call centre India 100 %
BA Cityflyer Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Airline operations England 100 %
BA Euroflyer Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Airline operations England 100 %
BA European Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
BA Excepted Group Life Scheme Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Life insurance England 100 %
BA Healthcare Trust Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Healthcare England 100 %
BA Holdco Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
BA Number One Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
BA Number Two Limited
IFC 5, St Helier, JE1 1ST
Holding company Jersey 100 %
Bealine Plc
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant England 100 %
BritAir Holdings Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
British Airways (BA) Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant England 100 %
British Airways 777 Leasing Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft leasing England 100 %
British Airways Associated Companies Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
British Airways Avionic Engineering Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance England 100 %
British Airways Capital Limited
Queensway House, Hilgrove Street, St Helier, JE1 1ES
Aircraft financing Jersey 100 %
British Airways Holdings B.V.
Strawinskylaan 3105, Atrium, Amsterdam, 1077ZX
Holding company Netherlands 100 %
British Airways Holidays Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Tour operator England 100 %
British Airways Interior Engineering Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance England 100 %
British Airways Leasing Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft leasing England 100 %
British Airways Maintenance Cardiff Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Aircraft maintenance England 100 %
British Airways Pension Trustees (No 2) Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Trustee company England 100 %
British Midland Airways Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Former airline England 100 %
British Midland Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant England 100 %
Flyline Tele Sales & Services GmbH
Hermann Koehl-Strasse 3, 28199, Bremen
Call centre Germany 100 %
Gatwick Ground Services Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Ground services England 100 %
Overseas Air Travel Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Transport England 100 %
Speedbird Insurance Company Limited*
Canon’s Court, 22 Victoria Street, Hamilton, HM 12
Insurance Bermuda 100 %
Teleflight Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Call centre England 100 %
British Mediterranean Airways Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Former airline England 99 %
Avios Group (AGL) Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Management of airline
loyalty programmes
England 86 %
1
Group investments
86

Iberia
Name and address Principal activity
Country of
incorporation
Percentage of
equity owned
Compañía Operadora de Corto y Medio Radio Iberia Express, S.A.*
Calle Alcañiz 23, Madrid, 28006
Airline operations Spain 100 %
Compañía Explotación Aviones Cargueros Cargosur, S.A.
Calle Martínez Villergas 49, Madrid, 28027
Cargo transport Spain 100 %
Iberia LAE México SA de CV
Xochicalco 174, Col. Narvarte, Alcaldía Benito Juárez,
Mexico City, 03020
Aircraft technical
assistance
Mexico 100 %
Iberia Líneas Aéreas de España, S.A. Operadora*
Calle Martínez Villergas 49, Madrid, 28027
Airline operations and
maintenance
Spain 100 %
2
Iberia Operadora UK Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
1
Iberia Tecnología, S.A.*
Calle Martínez Villergas 49, Madrid, 28027
Aircraft maintenance Spain 100 %
Iberia Desarrollo Barcelona, S.L.*
Avenida de les Garrigues 38-44, Edificio B,
El Prat de Llobregat, Barcelona, 08220
Airport infrastructure
development
Spain 75 %
Avios Group (AGL) Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Management of airline
loyalty programmes
England 14 %
1
Aer Lingus
Name and address Principal activity
Country of
incorporation
Percentage of
equity owned
Aer Lingus (Ireland) Limited
Dublin Airport, Dublin
Provision of human resources
support to fellow group companies
Republic of
Ireland
100 %
Aer Lingus 2009 DCS Trustee Limited
Dublin Airport, Dublin
Trustee Republic of
Ireland
100 %
Aer Lingus Beachey Limited
Penthouse Suite, Analyst House, Peel Road, Douglas, IM1 4LZ
Dormant Isle of Man 100 %
Aer Lingus Group DAC*
Dublin Airport, Dublin
Holding company Republic of
Ireland
100 %
3
Aer Lingus Limited*
Dublin Airport, Dublin
Airline operations Republic of
Ireland
100 %
Aer Lingus (UK) Limited
Aer Lingus Base, Belfast City Airport, Sydenham Bypass,
Belfast, Co. Antrim, BT3 9JH
Airline operations Northern
Ireland
100 %
ALG Trustee Limited
33-37 Athol Street, Douglas, IM1 1LB
Trustee Isle of Man 100 %
Dirnan Insurance Company Limited
Canon’s Court, 22 Victoria Street, Hamilton, HM 12
Insurance Bermuda 100 %
Santain Developments Limited
Dublin Airport, Dublin
Dormant Republic of
Ireland
100 %
IAG Loyalty
Name and address Principal activity
Country of
incorporation
Percentage of
equity owned
Avios South Africa Proprietary Limited
Block C, 1 Marignane Drive, Bonaero Park, Gauteng, 1619
Dormant South Africa 100 %
IAG Loyalty Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant England 100 %
IAG Loyalty Retail Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Retail services England 100 %
Group investments continued
87

IAG Cargo
Name and address Principal activity
Country of
Incorporation
Percentage of
equity owned
Cargo Innovations Limited
Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow Airport,
Hounslow, Middlesex, TW6 2JS
Dormant England 100 %
Zenda Group Limited
Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow Airport,
Hounslow, Middlesex, TW6 2JS
Dormant England 100 %
Vueling
Name and address Principal activity
Country of
incorporation
Percentage of
equity owned
Yellow Handling, S.L.U
Carrer de Catalunya 83, Viladecans, Barcelona 08840
Ground handling
services
Spain 100 %
LEVEL
Name and address Principal activity
Country of
incorporation
Percentage of
equity owned
FLYLEVEL UK Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Dormant England 100 %
Openskies SASU
3 Rue le Corbusier, Rungis, 94150
Airline operations France 100 %
International Consolidated Airlines Group, S.A.
Name and address Principal activity
Country of
incorporation
Percentage of
equity owned
AERL Holding Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Holding company England 100 %
British Airways Plc*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Airline operations England 100 %
4
FLY LEVEL, S.L.
Camino de la Muñoza s/n, El Caserío,
Iberia Zona Industrial 2, Madrid, 28042
Airline operations Spain 100 %
IAG Cargo Limited*
Carrus Cargo Centre, PO Box 99, Sealand Road, London Heathrow
Airport, Hounslow, TW6 2JS
Air freight operations England 100 %
IAG Connect Limited
Waterside, PO Box 365, Harmondsworth, UB7 0GB
Inflight eCommerce platform Republic of
Ireland
100 %
IAG GBS Limited*
Waterside, PO Box 365, Harmondsworth, UB7 0GB
IT, finance, procurement
services
England 100 %
IAG GBS Poland sp z.o.o.*
Ul. Opolska 114, Krakow, 31-323
IT, finance, procurement
services
Poland 100 %
IB Opco Holding, S.L.
Calle Martínez Villergas 49, Madrid, 28027
Holding company Spain 100 %
2
Vueling Airlines, S.A.*
Carrer de Catalunya 83, Viladecans, Barcelona 08840
Airline operations Spain 100 %
* Principal subsidiaries
1 The Group holds 100% of both the nominal share capital and economic rights in Avios Group (AGL) Limited, held directly by British Airways Plc,
which owns 86% and Iberia Operadora UK Limited which owns 14%.
2 The Group holds 49.9% of both the total nominal share capital and the total number of voting rights in IB Opco Holding, S.L. (and thus, indirectly, in
Iberia Líneas Aéreas de España, S.A. Operadora), such stake having almost 100% of the economic rights in these companies. The remaining shares,
representing 50.1% of the totalnominal share capital and the total number of voting rights belong to a Spanish company incorporated for the
purposes of implementing the Iberia nationalitystructure.
3 The Group holds 49.75% of the total number of voting rights and the majority of the economic rights in Aer Lingus Group DAC. The remaining voting
rights, representing 50.25%, correspond to a trust established for implementing the Aer Lingus nationality structure.
4 The Group holds 49.9% of the total number of voting rights and 99.65% of the total nominal share capital in British Airways Plc, such stake having
almost 100% of the economic rights. The remaining nominal share capital and voting rights, representing 0.35% and 50.1% respectively, are held by a
trust established for the purposes of implementing the British Airways nationality structure.
88

Associates
Name and address
Country of
Incorporation
Percentage of
equity owned
Empresa Hispano Cubana de Mantenimiento de Aeronaves, Ibeca, S.A.
Carretera Aerocaribbean y Final, Terminal No 5
Jose Martí Airport, Wajay, Municipio Boyeros, Havana
Cuba 50 %
Empresa Logística de Carga Aérea, S.A.
Carretera de Wajay km 1 ½, Jose Martí Airport, Havana
Cuba 50 %
Mundiplan Turismo y Ocio S.L.
Calle Hermanos García Noblejas 41, Madrid, 28037
Spain 50 %
Multiservicios Aeroportuarios, S.A.
Avenida de Manoteras 46, 2ª planta, Madrid, 28050
Spain 49 %
Dunwoody Airline Services Limited
Building 552 Shoreham Road East, London Heathrow Airport, Hounslow, TW6 3UA
England 40 %
Serpista, S.A.
Calle Cardenal Marcelo Spínola 10, Madrid, 28016
Spain 39 %
Air Miles España, S.A.
Avenida de Bruselas 20, Alcobendas, Madrid, 28108
Spain 26.7 %
Inloyalty by Travel Club, S.L.U.
Avenida de Bruselas 20, Alcobendas, Madrid, 28108
Spain 26.7 %
Viajes Ame, S.A.U.
Avenida de Bruselas 20, Alcobendas, Madrid, 28108
Spain 26.7 %
LanzaJet Inc.
520 Lake Cook Road, Suite 680, Deerfield, Illinois, 60015
USA 16.7 %
Joint ventures
Name and address
Country of
incorporation
Percentage of
equity owned
Sociedad Conjunta para la Emisión y Gestión de Medios de Pago EFC, S.A.
Calle de O’Donnell 12, Madrid, 28009
Spain 50.5 %
Other equity investments
The Group’s principal other equity investments are as follows:
Name and address
Country of
incorporation
Percentage
of equity
owned Currency
Shareholder’s
funds
(million)
Profit/(loss)
before tax
(million)
Air Europa Holdings S.L.
1
Carretera Arenal - Llucmajor, km 21.5, Llucmajor, 07620
Spain 20 % € 25 –
Servicios de Instrucción de Vuelo, S.L.
Camino de la Muñoza s/n, El Caserío,
Iberia Zona Industrial 2, Madrid, 28042
Spain 19.9 % € 70 6
The Airline Group Limited
5th Floor, Brettenham House South, Lancaster Place, London,
WC2N 7EN
England 16.7 % £ 241 –
Travel Quinto Centenario, S.A.
Calle Alemanes 3, Sevilla, 41004
Spain 10 % € – –
i6 Group Limited
Farnborough Airport, Ively Road, Farnborough, Hampshire,
GU14 6XA
England 7.4 % £ 2 (2)
Monese Limited
Eagle House 163 City Road, London, EC1V 1NR
England 4.8 % £ 8 (31)
1 The Shareholder funds and result before tax of Air Europa Holdings S.L. represent the data for the year to 31 December 2022 and are prepared under
Spanish GAAP. The Group does not have access to financial information other than that reported in the statutory financial statements of the
company, which are published subsequent to the authorisation of these consolidated financial statements.
Group investments continued
89

INTERNATIONAL
AIRLINES
GROUP
International Consolidated
Airlines Group, S.A. and
Subsidiaries
Consolidated Management Report
for the year ended 31 December 2023

INTERNATIONAL
AIRLINES
GROUP
Connecting people,
businesses and countries
Who we are
We are International
Airlines Group (IAG).
One of the world’s largest
airline groups, made up
of our airline portfolio
brands and our non-airline
businesses. Our world-
class airline brands
have distinct identities,
customer propositions
and strategies.
Our stakeholders
EmployeesCustomers Suppliers Shareholders,
lenders and
other financial
stakeholders
For more information see the
operating companies’ sections
We have a portfolio of world-class brands
and operations
Governments
and regulators
Business at a glance
1

250+
destinations
across 91 countries
582
fleet
Creating global connections
Africa, Middle
East & South Asia
12.5
Asia Pacific
3.5
North America
31.7
Domestic & Europe
33.8
Latin America
& Caribbean
18.5
Available seat kilometres
(ASK % of IAG 2023 network)
115.6 million
passengers
4.7 billion
cargo tonne kilometres
71,794
employees globally
142.8 billion
Avios issued
2

Our proven structure facilitates
transformation and innovation
Drive portfolio and
financial strategy
• Drive Group corporate strategy;
set the portfolio
• Allocate capital and manage
thebalance sheet
• Manage investor relations
andfinancial stakeholders
• Drive value through mergers
andacquisitions, partnerships
andjoint businesses
Performance manage
• Performance manage
theoperating companies
• Oversee transformation ofthe
operating companies
Facilitate value capture
and share best practices
• Set the ambition and facilitate
asset-light growth
• Drive top talent management
andpipeline
• Drive sustainability agenda
• Facilitate capture of additional
synergies
• Drive innovation
• Provide centres of excellence to
facilitate best-practice sharing
• Performance accountability
• Commercial independence
• Operational independence
• Customer value proposition and relationship
• People management
• Manage relevant stakeholders
Allow our airlines to benefit from scale and world-class expertise
IAG, as the parent company, defines
theGroup ambition and drives its
long-term strategy. Its independence
from the operating companies enables
IAG to set performance targets for
these, manage their progress, oversee
their transformation initiatives, and
efficiently allocate capital within
theGroup. IAG supports intra-Group
coordination, best practices sharing
andtalent management, facilitating the
capture of synergies. Our model also
allows the Group to take part more
effectively in industry consolidation,
withIAG ensuring inorganic options are
aligned with the Group’s strategy
andproviding a central platform to
thebenefit of new operating companies
joining the Group.
The Group’s structure allows our
brandsto focus their efforts on their
addressable markets, customer
proposition, cultural identity, commercial
strategy and their industrial relations,
while its scale supports innovation and
investment innew products and services
to enhance our operating companies’
customer experience.
The Group’s portfolio sits on a central
platform, which drives efficiency and
transformation. The IAG central platform
leads collective efforts for the Group
tobe at the forefront of innovation
andsustainability in the airline industry,
by supporting and scaling top emerging
technologies in travel and aviation
andworking towards ambitious
sustainability targets.
Corporate parent company
Operating companies
Central platform
Business model
3

Our medium-term ambitions
Strengthening
our core
Driving earnings
growth through
asset-light businesses
Operating under
a strengthened
financial and
sustainability
framework
1.
Growing our portfolio
of global leadership
positions
2.
Strengthening our
portfolio of world-class
brands and operations
3.
Growing IAG Loyalty
4.
Further developing and
leveraging our strategic
airline partnerships
5.
Disciplined capital
allocation and balance
sheet management
6.
Industry leader to net zero
Our focus is on maximising
total shareholder returns
Transforming our business
Proven
structure and
business model
Investing in
unrivalled network
and customer
proposition
Driving efficiency
and innovation
World-class and
diverse team
Sustainable growth + Delivering world-class margins
= Maximising total shareholder returns
12-15%
operating margin
1
13-16%
ROIC
1
+4-5%
2
organic ASK
growth
<1.8x leverage
1
through cycle
tosupport
inorganic growth
1 For further detail refer to the Alternative performance measures section of the financial statements
2 2024 to 2026
Strategy
4

Strategic imperatives expanded
Strengthening
our core
How we create value:
Growing our portfolio of global
leadership positions and
strengthening our portfolio of
world-class brands and operations
Our activity in 2023
In 2023, following a strong demand
recovery environment across the
industry, the Group has kept its focus
oncontinuing to strengthen its core
bymaintaining and growing its global
leadership positions and strengthening
our portfolio of world-class brands.
1. Growing our portfolio of global
leadership positions
Our brands have experienced sustained
strong demand that has driven positive
unit revenues across all regions. With
aresilient leisure and premium leisure
demand environment, Aer Lingus, Iberia,
LEVEL Spain and Vueling have managed
to grow capacity ahead of 2019 levels,
whilst British Airways’ recovery remains
slower driven by a softer business travel
environment after the pandemic and
limited capacity to fly east. The Group
operating companies have capitalised
onthe positive demand landscape togrow
organically in our core markets. For
example, Iberia has focused on increasing
capacity on primary cities inLatin America,
such as Bogota, Lima and Mexico City,
operating the airline’s busiest schedule to
the region thus far. British Airways also
started a new year-round service to
Cincinnati and announced the resumption
of Abu Dhabi in 2024, whilst Aer Lingus
announced the resumption of Minneapolis
and the launch of a new direct service to
Denver for2024. Vueling put a special
emphasis on de-seasonalisation during the
2023 winter season through increased
utilisation, adding more capacity towinter
sun destinations, such as the Canary
Islands and flying almost 37 million in 2023,
a Vueling record.
The Group also remains committed
toinvest in the digitalisation of the
customer journey to provide our
customers with a more personalised
andelevated travel experience.
Duringthe year, Aer Lingus delivered
asignificant transformation in its
Customer Contact Centre by investing
intechnology, redesigning its process
workflow and implementing bot
automation that have brought the
average wait time below two minutes
and increased customer satisfaction
rates by30% compared with 2022.
British Airways initiated the
re-platforming of its website and the
British Airways app, which allow for
deeper personalisation, full online
serviceability, end-to-end trip
management and a fast product release
cycle. Vueling implemented a new social
media platform to make case
management more efficient and
partnered with industry-leading
technology organisations to digitalise
customer care and disruption
management.
Our priorities for 2024
During 2024, the Group will aim to
continue strengthening our core markets
and hubs where we have a geographical
advantage and cultural links, including
the US, Latin America and Spain, whilst
continuing to explore the potential of
future profit pools.
IAG will also continue participating
intheindustry’s consolidation process
when value-accretive merger and
acquisition (M&A) opportunities arise.
Weaim to complete the Air Europa
acquisition by the end of 2024, subject to
receipt of regulatory clearance, which will
enable the Group to tap into new
markets in Latin America and increase
global connectivity at the Madrid hub.
Our operating companies will remain
focused on delivering the transformation
plans for their different business
segments and accelerating digital
transformation, which will ensure the
Group remains well-positioned to
continue to create value for our
customers and all our stakeholders.
2. Strengthening our portfolio of
world-class brands and operations
Throughout 2023, we have continued
toimprove and transform our brands
tobe able to provide our customers
withan unrivalled proposition and reach
the full potential of our businesses
inthelong term. The Group is
embedding transformation across all our
business portfolio, looking at all business
areas in forensic detail, building
onourstrong foundations of previous
execution to drive a step-change
inrevenue, costs and operations.
Despite the air traffic control (ATC)
challenges in Europe, which have
resulted in frequent passenger
disruption, our airlines’ investments
intransformation have delivered
enhancements in operational efficiency.
For example, Iberia managed to achieve
continued global leadership in on-time
performance (OTP) by investing in
multiple efficiency initiatives, including
increasing crew resources and
coordination between scheduling
andoperations, whilst Vueling attained
an improvement of more than 4.7
percentage points in OTP, ahead of its
transformation targets. British Airways
faced punctuality challenges over the
year, driven by both internal and
external factors, but started seeing
gradual improvements from the fourth
quarter after the implementation of new
initiatives such as the re-shape of
London Heathrow Terminal 5 minimum
connection times, the optimisation of
scheduled block hours and the
smoothing of the schedule to even out
handling workload.
Our brands also continued to improve
the customer experience by investing
inenhancing our product across all the
journey touchpoints. For example,
Iberiarolled out its ‘Next’ suite-style
seatwith direct aisle access on its Airbus
A350 business cabins and redesigned
the catering proposition across cabins
on long-haul flights, including an
additional meal ineconomy and
premium economy. British Airways
implemented numerous customer
initiatives, such as trialling biometrics to
speed up the boarding process, and
continued to fit its new business cabin
seat, the Club Suite, ontoexisting
long-haul aircraft.
Strategic imperatives
5

Driving earnings
growth through
asset-light businesses
How we create value:
Growing IAG Loyalty and further
developing and leveraging our
strategic airline partnerships
Our activity in 2023
Alongside strengthening our core flying
operations, in 2023 the Group has
focused on driving a larger portion
ofasset-light earnings into our portfolio,
generating in turn additional value for
our airlines, our customers and building
a more robust, diversified and
resilientbusiness.
3. Growing IAG Loyalty
In 2023, IAG Loyalty leveraged its
positive momentum and continued
tocontribute greatly to the Group.
Thestrength of the business was
reflected in record membership growth
surpassing 8.2 million active members
with heightened levels of member
activity through increased levels
ofAvios collection and spend.
This has been achieved through
continuous investment in the customer
proposition to drive deeper customer
engagement and to deliver a strong
contribution to the Group. We are
continuing to develop our global loyalty
currency, Avios. Following the adoption
by Qatar Airways in 2022, Finnair was
next to announce the adoption of Avios
in early 2024, further building Avios’
position as a global currency. We
successfully leverage our large portfolio
of air and non-air partners who provide
compelling collection opportunities for
our customers in travel, retail or financial
services. Our partnerships with
American Express, Barclays and
Santander continue to provide strong
levels of external remuneration and we
continue to expand new partnerships
with, for example, partnerships launched
destinations for Iberia customers
connecting on to Qatar in Doha, a truly
asset-light way of increasing Iberia’s
footprint in Asia, Middle East, Africa
andOceania. We also continue to
collaborate strongly on the loyalty side
with Qatar Airways. For instance,
IAGand Qatar launched a new joint
co-brand credit card in India, further
enhancing our footprint in the world’s
most-populous country.
The reopening of Asia saw British
Airways rebuild its network to China
andreactivate its joint business with
China Southern, whilst the airline
restored its network to Tokyo, part
ofthe Siberian Joint Business with our
partners Japan Airlines and Finnair.
Our priorities for 2024
In 2024, IAG Loyalty will continue
todevelop its capabilities and invest
inits customer experience with the
development of single Avios balances
and improved member benefits. These
will include additional Avios-only flights,
enhanced pay-with-Avios capabilities
with British Airways and improved
redemption for hotels and car hires.
Wewill also support Finnair’s adoption
of Avios and in parallel explore
opportunities with new partners
toexpand the global reach of Avios.
In 2024, the Group will continue
tostrengthen its airline partnerships
tomaintain our leading customer
proposition with best-in-class product
and a seamless customer journey. In our
AJB we will enhance our joint loyalty
proposition with aligned mileage accrual,
explore further airport co-location
opportunities and increase capacity
topopular destinations. With Qatar
Airways, our first focus will be to
integrate Iberia into the Qatar Joint
Business whilst we look for further
opportunities to grow our network.
with open-air retailer Bicester Village or
World Duty Free. Redemption
opportunities, meant to further enhance
the utility of Avios for our customers,
arealso growing with the launch of
Avios-only flights, which started in
November 2023 with a flight to Sharm
ElSheikh and the announcement
ofseveral more destinations in 2024.
Additionally, this year we transitioned
the Group’s loyalty programmes toa
spend-based earn model to further
support member engagement.
4. Further developing and leveraging
our strategic airline partnerships
During 2023, IAG continued to develop
and leverage our portfolio of strategic
airline partnerships, driving asset-light
growth and incremental value. Our joint
businesses provide our airlines and
partners with the ability to develop
amarket-leading customer proposition
through combined networks, loyalty
reciprocity and an overall improved
flying experience.
The Atlantic Joint Business (AJB)
between IAG carriers and American
Airlines is the leader in the highly
attractive Europe-US market. In 2023,
Aer Lingus continued advancing
itsintegration in the AJB through
codeshare expansion with American
Airlines and improved loyalty benefits
for customers. The AJB also continued
to invest in our customer experience,
with British Airways and Iberia now
co-locating with American Airlines at
JFK Airport in New York whilst offering
a new premium check-in area, new
lounges and an overall improved
network connectivity and experience
atthe airport.
The Group continued extracting value
from its unique relationship with Qatar
Airways. In addition to the joint business,
it includes the joint loyalty currency
Avios, the interline relationship between
the Cargo businesses and leveraging
ofthe combined size of IAG and Qatar
Airways for joint procurement of an
increasing number of categories.
Thejoint business with Qatar Airways
isthe world’s largest in terms of
countries covered. Iberia joined in 2023
and launched a daily flight to Doha from
Madrid, adding dozens of new
6

Operating under
astrengthened
financial and
sustainability
framework
How we create value:
Disciplined capital allocation
and balance sheet management
Industry leader to net zero
Our activity in 2023
This year we continued to experience
volatility across the global economy.
Regular increases in interest rates
following record high inflation levels,
andsupply chain and operations
disruptions, all aggravated by the wars
in Ukraine and the Middle East, have
impacted ourbusinesses. Despite this,
IAG’s companies demonstrated the
ability to meet market demand, while
carrying out transformation initiatives,
resulting in astrong performance across
the Group. We managed a robust
recovery in our margins and balance
sheet, which has allowed us to reinvest
in the business, and reduce our debt.
5. Disciplined capital allocation and
balance sheet management
In 2023, we have achieved a strong
operating profit of €3,507 million for the
full year, driven by strong demand and
our teams’ efforts in revenue and cost
transformation initiatives, helping
tooffset investment and inflation.
Onthe revenue side, we have invested
incommercial technology and skills, and
upgraded customer journey experiences.
On the cost side, we put a special focus
into OTP and resilience to minimise
disruption in a very challenging
operating environment, and end-to-end
process re-engineering, among
otherinitiatives.
is the UK’s Nova Pangaea Technologies,
a clean-tech company developing
advanced biofuels used to produce SAF
from non-food agricultural waste and
wood residues. IAG will support the
building of its first waste-to-fuel
commercial-scale production facility,
and the UK’s first ofits kind.
Additionally, Microsoft co-funded IAG’s
purchase of 14,700 tonnes of SAF, the
largest co-funded purchase agreement
of SAF for emissions reductions globally.
Additionally, we continued to engage
with cutting-edge technology companies
such as ZeroAvia, i6 andHeirloom
through our innovation accelerator
Hangar 51, toprovide multiple
decarbonisation solutions.
Our priorities for 2024
During 2024, the Group will keep
operating under a disciplined and resilient
financial framework whilst investing in
our strategy for the years to come and
delivering on our sustainability targets.
Using our financial framework, we plan
to continue re-investing in the business,
with an expected annual average capital
expenditure of c.€4.5 billion for the next
three years. This spending will further
improve our product and customer
proposition, supporting IAG in advancing
with our fuel efficiency targets,
andallowing the Group to continue
topursue sustainable growth.
In terms of our sustainability ambition,
we will continue to work with the
industry, technology start-ups and
government institutions to further
accelerate SAF production efforts, and
explore new technologies and ways to
accelerate the industry decarbonisation
process. This includes maintaining our
efforts with the UK and EU governments
to persuade them to commit and invest
in more SAF production.
Overall, IAG is committed to ensure
sustainable growth and value creation
for all our stakeholders, investing
inourcustomers, people and the
broader society while we create
long-term value for our shareholders.
Following the past three challenging
years, having a disciplined approach
tocapital allocation has been especially
crucial. Our framework meets the needs
of all stakeholders: investors, employees,
customers and society; whilst our
targets, like maintaining a lower than
1.8xnet leverage ratio through the cycle,
ensure resilience and access to more
favourable funding. This allows IAG
topursue our strategy by investing in
the business, our customer experience,
digital infrastructure and sustainability
targets, whilst growing organically
and/or inorganically if value-accretive
opportunities exist and returning value
to the shareholders.
During 2023 we reduced our gross debt
position by €3.9 billion, including the
payment of a £2.0 billion (€2.3 billion)
loan to British Airways partially
guaranteed by the UKEF, and loans
totalling €1.0 billion to Iberia and
Vueling, partially backed by Spain’s ICO.
Efforts to deleverage and improve
operating performance contributed to
both IAG and British Airways regaining
their investment-grade credit ratings
with S&P at the end of the third quarter
of 2023.
6. Industry leader to net zero
Alongside a robust financial framework,
creating a truly sustainable business
isfundamental to our long-term growth.
While aviation is essential to our global
society, there is no denying that the
industry must undergo great efforts
tominimise its carbon footprint and
fight climate change. IAG has led
industry action on sustainability for over
a decade, having been the first airline
group worldwide to commit to net zero
emissions by 2050. SAF is a key solution
in our transition plan to net zero and we
have committed to a target of 10% SAF
use by 2030.
We are continuously working towards
our sustainability targets, having secured
c.33% of our total committed SAF
todate. This year, we have agreed deals
with several SAF producers. An example
Strategic imperatives continued
7

Operating margin
(%)
1, 2
A
RoIC
(%)
1 , 2
A R
Link to strategic imperatives
Definition and purpose
Operating margin is the operating result
before exceptional items as a
percentage of revenue. We use this
indicator to measure the efficiency and
profitability of our business and the
financial performance of the individual
operating companies within the Group.
Performance
The Group’s operating margin before
exceptional items recovered to 11.9%
from 5.4% in 2022. Total revenue rose by
€6.4 billion to €29.5 billion, reflecting a
22.6% increase in capacity versus 2022
together with a load factor 3.5 points
higher and yields (per revenue
passenger kilometre) 3.8% higher. Cargo
revenue was down 28.4% on 2022,
driven by lower yields with cargo
volumes 17.2% higher. Other revenue
was up €494 million from 2022
reflecting growth of IAG Loyalty and
recovery of Iberia’s third-party
maintenance business. Non-fuel costs
were down 4.4% on a unit basis and unit
fuel costs were 0.7% higher than 2022.
Link to strategic imperatives
Definition and purpose
Return on Invested Capital (RoIC)
isdefined as EBITDA before exceptional
items, less fleet depreciation adjusted
for inflation, other depreciation and
software amortisation, divided by
average invested capital. We use
12-month rolling RoIC to assess how well
the Group generates returns in relation
to the capital invested in the business,
together with its ability to fund growth
and topaydividends.
Performance
The Group’s RoIC improved to 14.8%
from 4.6% in 2022 reflecting the Group’s
strong operating performance, with
EBITDA before exceptional items of
€5.6 billion. Invested capital was 8%
higher, reflecting 34 aircraft deliveries
and the investment in customer product
and IT during the period. The weighted
average age of fleet was marginally
lower at 11.0 years compared to 11.3
years in2022, reflecting the net impact
of the ageing of the existing fleet, older
aircraft withdrawn from service and new
aircraft delivered in 2023.
Key Strategic imperatives
Measure linked to remuneration
of Management Committee
R
Alternative performance measure
A
Link to our strategic imperatives
Tracking our performance
Medium-term ambition 13-16%
Medium-term ambition 12-15%
2019 2022 2023
15
12
3
6
9
0
5.4
12.8
11.9
2019 2022 2023
16
12
4
8
0
4.6
14.6
14.8
We use key performance indicators (KPIs) to assess and to monitor
the Group’s performance. We evaluate opportunities based
on thestrategic imperatives of the Group and use the KPIs to identify
and generate sustainable value for our shareholders.
Strengthening our core
Driving earnings growth
throughasset-light businesses
Operating under a strengthened
financial and sustainability
framework
Key performance indicators
8

% of 2019 capacity
Medium-term ambition +4-5% ASK growth
Gross CAPEX
(€ million)
Capacity
(ASKs billion)
For the KPIs, 2019 comparatives are shown to give a benchmark against the most recent year
before the disruption brought about by the impact of COVID-19.
1 For further detail refer to the Alternative performance measures section of the
financialstatements.
2 The 2019 and 2022 results include a reclassification to conform with the current year
presentation for the Net gain on sale of property, plant and equipment. The 2019 results include
a restatement for the treatment of administration costs associated with the Group’s defined
benefit pension schemes.
Link to strategic imperatives
Definition and purpose
Gross capex (capital expenditure) is
defined as the acquisition of property,
plant and equipment, and intangible
assets reported in the Group’s
consolidated cash flow statement and
includes fleet, customer product, IT, ETS
allowances and infrastructure, including
those assets initially purchased and then
subject to subsequent sale and
leaseback transactions and recognised
as right of use assets. We track the
planned capital expenditure through our
business planning cycle to ensure it is in
line with achieving our other financial
targets.
Performance
Gross capex for 2023 was €3.5 billion.
Fleet and fleet-related capex
represented 77% of the total capital
expenditure and included final delivery
payments related to 27 aircraft, together
with pre-delivery payments and
maintenance spend. Other spend
includes customer product, property
and IT investments, together with ETS
allowances. In addition, the Group took
delivery of seven aircraft on direct
leases, including one that was originally
planned as a delivery from the aircraft
manufacturer. Direct leases do not result
in capital expenditure for the Group.
Link to strategic imperatives
Definition and purpose
Capacity in the airline industry is
measured in available seat kilometres
(ASKs) which is the number of seats
available for sale multiplied by
thedistance flown.
Performance
The Group continued to restore its
passenger capacity, following the
significant reductions due to COVID-19,
with passenger capacity now at 95.7% of
that of 2019. Passenger load factor was
85.3%, 3.5 points higher than inthe
previous year and 0.7 points higher than
in 2019.
2019 2022 2023
4,000
3,000
1,000
500
2,000
3,500
1,500
2,500
0
3,465
3,544
3,875
2019 2022 2023
350
300
100
50
200
150
250
0
338
323
264
78.0%
95.7%
Key performance indicators continued
9

Adjusted EPS
(€cents)
1, 2
A R
Link to strategic imperatives
Definition and purpose
Free cash flow is the cash generated
inthe year, defined as the net cash flows
from operating activities less the cash
flows associated with the acquisition
ofproperty, plant and equipment and
intangible assets. It represents the
cash-generating ability of the Group to
support operations and maintain its
capital assets, and is monitored by
theGroup in making both investment
andcapital decisions.
Performance
The Group’s free cash flow for 2023 was
€1.3 billion, €0.3 billion up from 2022
driven by strong cash flows from
operating activities at €4.9 billion which
reflect EBITDA performance and gross
capex for the period €0.3 billion lower
than in 2022.
Link to strategic imperatives
Definition and purpose
Adjusted earnings per share (EPS)
represents the diluted earnings for
theyear before exceptional items
attributable to ordinary shareholders.
Performance
Adjusted earnings per share was 50.6 €
cents compared to 5.6 € cents in 2022,
driven by the strong operating
performance, with net non-operating
costs also lower by €0.4 billion
reflecting lower net interest costs and a
favourable impact of net retranslation
credits in the year driven primarily by
the weakening of the US dollar. The
number of dilutive shares fell in 2023,
reflecting the full-year impact of the
repayment of the IAG €500 million
convertible bond in 2022. From 2020
the IAG number of shares increased
from 2.0 billion to 5.0 billion as a result
of the rights issue IAG completed in
September 2020.
2019 2022 2023
80
60
70
30
10
40
50
20
0
76.4
5.6
50.6
Free cash flow
(€ million)
1
A
2019 2022 2023
2,000
1,000
1,500
500
0
979
537
1,320
Key Strategic imperatives
Measure linked to remuneration
of Management Committee
R
Alternative performance measure
A
Link to our strategic imperatives
Strengthening our core
Driving earnings growth
throughasset-light businesses
Operating under a strengthened
financial and sustainability
framework
10

Net Promoter Score
(NPS)
R
Net debt to EBITDA before
exceptional items
1, 2
(times)
A
Link to strategic imperatives
Definition and purpose
Net debt to EBITDA before exceptional
items (leverage) is calculated as
long-term borrowings (both current
andnon-current), less cash, cash
equivalents and other current
interest-bearing deposits at
31 December, which is divided by
EBITDA before exceptional items for the
year. IAG uses this measure to monitor
leverage, to assess financial headroom
against our target maximum leverage of
1.8 times over the cycle.
Performance
The Group’s leverage improved to 1.7
times from 3.1 times in 2022, driven
bystrong EBITDA before exceptional
items of €5.6 billion on net debt lower
by €1.1 billion. During the year gross debt
reduced by €3.9 billion to €16.1 billion,
driven by the repayment of €4.0 billion
of non-aircraft borrowings partially
offset by the net increase ofaircraft
lease liabilities in the period.
Link to strategic imperatives
Definition and purpose
At IAG a transactional NPS is measured:
customers respond about their likelihood
of recommending an IAG operating
carrier no more than seven days after
taking a flight. Including NPS targets in
the Group’s employee bonus scheme has
driven a stronger focus on improving the
customer experience which, together
with customer advocacy, drives
competitive advantage, leading to faster
organic growth.
Performance
In 2023, NPS increased by 0.2 points
compared to 2022. Positive impacts can
be attributed to substantial investment
in our cabins and cabin product, the
enhancement of food and drink offering,
the effort to digitalise the customer
journey, and the improvements in
customer care. On-time performance
(OTP) was negatively impacted by
disruptions, stemming from diverse
factors such as air traffic control failures,
strikes, adverse weather events, supply
chain challenges, and baggage issues
across key airports. Our operating
companies responded proactively to
these challenges through initiatives and
transformation plans aimed at improving
OTP and all baggage-related processes,
among others.
For the KPIs, 2019 comparatives are shown to give a benchmark against the most recent year
before the disruption brought about by the impact of COVID-19.
1 For further detail refer to the Alternative performance measures section of the
financialstatements.
2 The 2019 and 2022 results include a reclassification to conform with the current year
presentation for the Net gain on sale of property, plant and equipment. The 2019 results include
a restatement for the treatment of administration costs associated with the Group’s defined
benefit pension schemes.
2019 2022 2023
3.5
1
2
0.5
1.5
2.5
3
0
1.7
1.4
3.1
2019 2022 2023
30
25
10
15
5
20
0
25.8
18.6
18.4
Key performance indicators continued
11

Connecting with
our stakeholders
Our key stakeholders
We believe that IAG thrives
when the interests of our
different stakeholders are
appropriately balanced
sothat they all share in our
success. It is therefore
important that we fully
understand all
stakeholders’ priorities,
expectations andconcerns.
Our long-term commitment to
sustainability and corporate social
responsibility is embedded in all we do
ata Group and operating company level,
from our interactions with our customers
through to employees and shareholders.
We do not identify our communities
orthe environment as distinct
stakeholder groups as they are integral
tothe way in which we work. Our aim is
to be a force for good in the communities
in which we operate and, in so doing,
create value for all our stakeholders.
Moredetailed information is provided
inthe operating companies and
Sustainability sections of this report.
The nature of our business lends itself
tocontinuous dialogue with a wide group
of stakeholders, whilst considering
ourenvironmental and social impact.
Setoutbelow is an overview of our key
stakeholders, their relevance for IAG’s
business model and strategy, the manner
in which the Group has engaged, key
topics ofinterest, and the challenges as
well as outcomes of our engagement.
Our statement in relation to section172(1)
of the UK Companies Act, 2006, aswell
as further information on our
engagement with shareholders and our
workforce, is set out in the Corporate
Governance section of this report.
Stakeholder engagement
12

Customers
Key metrics Why they are important
Our customers are central to the
success of IAG. Customers choose
us primarily for our extensive
network and schedule and because
they trust our brands. We fly to five
continents. Through our wide range
of partnerships, our customers
benefit from an even larger global
network covering most countries in
the world.
NPS
18.6
+0.2 pts vly
Other metrics used to track engagement include:
• Customer satisfaction (CSAT) – rates
acustomer’s experience on key touch points
intheir customer journey
• NPS and CSAT inform business priorities
during the business planning stage, helping
toprioritise internal initiatives to drive
satisfaction improvements
• Claims and complaints – a Group consolidated
figure provides deeper insights into customer
challenges and is used to assess the
effectiveness of efforts to address concerns
• Contact centre key performance indicators –
help assess the efficiency, effectiveness and
quality of customer interactions
• Weaim to provide unrivalled customer
propositions and a portfolio of
world-class brands targeting specific
demand spaces and travel occasions
• Passenger revenues, including fares
andancillaries, are the most important
source of revenue for IAG
• Delivering outstanding customer
experience at all levels of the
businessand all brands will give
usaleading position
• Recognising our most loyal customers
through loyalty programmes, earning
rewards on a broad range of items
when flying with our airlines and
partners, creates value for both IAG
and our customers, and builds the
relationship
How we engaged Key topics
• Daily “Customer Voice” survey is sent to customers who have recently flown with us,
collecting feedback on their experience
• Customer feedback through a variety of channels (contact centres, social media, feedback
from customer-facing employees) and partners (crews, lounge colleagues and ground
handling agents) help us understand key pain points throughout the customers’ journeys
• Brand surveys are done to understand and meet the needs and expectations of our
customers
• Claims and complaints are raised through different channels and monitored to
accommodate our customers and enable action where necessary
• Contact Centre services and other digital channels, for example chat bots on
ourwebsites or WhatsApp 24/7, are used so that customers can reach out when needed
• Communicating information including latest changes in service or product enhancements
through various channels, including websites, e-mails and dynamic socialmedia accounts
• Guidance and a high standard of customer care throughout the customer journey from
bothairport and on-board colleagues
• Self-service and self-management
capabilities, particularly when there
isdisruption
• Punctuality and operational resilience
• Digitalisation of customer journey
• Sustainability
• Expansion of our partnerships
British Airways –
proactive customer care
In 2023, British Airways launched a
customer care initiative to revolutionise
our service by proactively addressing
ourcustomers' needs. Our dedicated
team focuses on identifying opportunities
for proactive interventions. Utilising
specific channels and innovative
practices, we aim to address issues
before customers are even aware or
before they feel the need to contact us.
This proactive approach has started
tobecome standard practice with
ourteam reaching out, seemingly
unexpectedly, to resolve
impendingissues.
One significant improvement is our ability
to support customers while they are
inthe air, a service we call 'Connected
Teams'. This addresses a previous gap
inour service and allows us to provide
assistance at 35,000 feet.
This new service has already supported
multiple onward passengers who risked
missing their connecting flights. Through
Connected Teams, cabin crew have been
able to request and obtain flight and gate
information for tight connections, passing
this on to passengers, and helping them
get to their new gate as efficiently as
possible on landing.
We are committed to identifying and
resolving issues before they impact the
customer experience.
Stakeholder engagement continued
13

Challenges Outcomes
• Loss of customer loyalty – dissatisfied
customers are more likely to switch
tocompetitors
• Reputation and brand equity – unhappy
customers are prone to sharing negative
experiences, which can harm the airlines’
reputation and brand image
• Decreased growth – negative reviews
may make it difficult for the airline to
attract new customers, impacting growth
• Financial risks – there are costs
associated with addressing customer
complaints, providing compensation
andmarketing efforts to repair the
brandimage
• Employee satisfaction and productivity
– poor customer experiences may affect
employee morale and job satisfaction
leading to lower productivity
• Customer experience – although our
teams work diligently to elevate
customer experience through investment
in digitalisation and customer care, we
continue to identify opportunities for
improvement and learning, particularly in
areas such as ensuring timely and
comprehensive communication to
customers about schedule changes
Feedback is key to enhancing our customer experience. IAG’s holistic approach uses
allavailable data from various channels to inform product and service strategy decisions.
Data is continuously analysed, supplementing it with additional customer research when
necessary. 2023 outcomes include those set out below:
• Digitalisation of the customer journey to improve ability to self-service. All operating
companies invested to digitalise the customer journey. Examples include Iberia’s
incorporation of GenAI to its WhatsApp and voice bot channels, and smart voice
assistance to call centres; British Airways introduced a conversational AI solution tothe
call centre system; Vueling implemented new digital disruption solutions, e.g.launch
ofself-management and the deployment of i-coupon; Aer Lingus is investing in digital
self-service and disruption management capabilities through amobile first approach
• Delivering best-in-class customer care included the formation of a new ‘Proactive
Customer Care’ team in British Airways (see example below), or the second iteration
ofIberia’s ‘Todo empieza conmigo’, a programme focused on the delivery of cultural
transformation and warm, customer-centric service. Aer Lingus and Vueling are
conducting training for cabin crew and other customer-facing employees. Vueling
streamlined its refund and compensation process
• Improved WiFi on long-haul flights through collaboration with providers to launch
newsatellites and enhance connectivity resulting in a notable improvement in
customer satisfaction
• Food and drink propositions continue to be improved including current offerings
andintroducing complimentary products
• In-flight service improvements included upgrading and significantly increasing in-flight
entertainment systems content, better quality economy headsets and a new
informative video at the start of long-haul flights to clarify the service for that flight.
Thenumber of public announcements on early morning / late night flights ('whisper
flights') were reduced resulting in improved customer satisfaction
• Baggage-related processes were improved including customer notifications about
baggage arrival or proactive delivery assistance; retrofitting of overhead bins to
address customer and crew complaints about the lack of trolley bag space on narrow-
body aircraft; enhanced communication of baggage allowances through clearer web
and email communication, targeted push notifications, and collaborating with agencies
for accurate customer information
Iberia –
WhatsApp Holistic Strategy
Iberia uses WhatsApp to improve
engagement and communication with
customers. A chat bot developed using AI
and machine learning recognises customer
intent with 95% accuracy and is prepared
to answer the most frequently asked
questions. Usage has grown 300% in the
last three years, reaching more than
850,000 sessions in 2023. For some
requests, customers prefer human contact,
and anexperienced pool of agents in the
customer centres is ready to engage when
required, and ensures a ‘fast track’ for
Business customers or anyone that has
suffered a disruption. During 2023 more
than 250,000 customers used live chat.
This year, using real-time operational data,
Iberia deployed proactive notifications to
its most loyal customers with relevant
information about their journey. Since the
launch this summer, more than 200,000
notifications were sentto customers.
Following this strategy, two new customer-
centric initiatives wereintroduced:
• WhatsApp Premium, a dedicated channel
and 100% human assisted for Top Tier
frequent flyers from the IB Plus loyalty
programme, and
• WhatsApp Crew, an agile channel for crew
to escalate customer issues and get
real-time responses for them, generating a
WOW effect while flying with proactive
communication for the customers.
14

Employees
Key metrics Why they are important
The IAG model empowers each
operating company to deliver for its
customers and people. Employee
contribution is paramount to our
strategy, prompting each company
to establish effective ways to
engage, listen and act on employee
feedback. Our employees shape our
business and are representative of
our international footprint. We are
proud of the diversity within our
operating companies and the
progress made on our journey to
making IAG more diverse and
inclusive.
Recruited over
13,500
colleagues across
ourIAG operating
companies and
platformbusinesses
Continued investment
in skills
74,282
employees trained, total
of 3,219,091 training
hours, and around an
average of 45.8 hours
per employee
1
• Our colleagues are integral to the delivery of our service,
business transformation and strategic priorities
• The Group’s key values enable us to fulfil our purpose. In
addition to this, each operating company and platform
business has its own corporate culture and values which
support its unique brand, business, customer and employee
propositions. The focus is on building and embedding the
culture needed to be competitive, achieve our transformation
agenda and provide a work environment in which colleagues
can thrive
• We continue to advance our equity, diversity and inclusion
ambition to create a diverse and inclusive culture
representative of the communities we live and work in, and the
customers we serve. We continue to make good progress
towards our ambition of 40% of senior leadership roles held by
women by 2025, and have introduced an ethnic diversity
ambition of 10% for our UK senior leaders by the end of 2027
Further metrics and details on people and equity, diversity and inclusion
can be found in the People section of this annual report
How we engaged Key topics
• Our operating companies and platform businesses use a variety
of formal and informal channels for two-way communication,
adapted to their company culture and employees’ work
environment. This includes online employee forums, internal
social networks, local cascade meetings, newsletters, workshops,
engagement surveys andsocial media
• A Group-wide Organisational Health Index (OHI) survey is
conducted in each of the operating companies and platform
businesses every six months, in addition to company specific
engagement surveys
• Employee-led network groups and communities provide valuable
channels for colleagues’ concerns and for collecting feedback on
plans and initiatives
• Local employee representatives and unions provide formal
channels for collective agreements as well as informal channels
for raising issues and concerns
• IAG European Works Council facilitates communication and
consultation between employees and management
ontransnational European matters. It includes representatives
from the different European Economic Area (EEA) countries,
meeting regularly throughout the year to be informed and
whereappropriate, consulted on transnational matters impacting
employees in two or more EEA countries
• Designated IAG Board members conduct workforce engagement
visits with colleagues across our operating companies, meeting a
variety of employees and leaders in their work context to better
understand first-hand the challenges and opportunities of the
different businesses, employee issues and levels of engagement.
More detail on workforce engagement can be found in the
Corporate Governance section of this report
• Fair and competitive reward, cost-of-living and pay conditions
• Ways of working including office/hybrid working
• Terms and conditions including flexible working practices
• Building capacity and resilience in operations and managing
operational challenges including maintenance and
third-partysuppliers
• Growth and investments in our network and fleet
• Transformation and investments in technology
• Training, development and career opportunities
• Safety and wellbeing
• Culture and engagement
• Diversity and inclusion
• Investment in facilities and work environment
• Sustainability
1 Average training hours is based on the total training hours performed per average headcount, pro-rated to Full Time Equivalent.
Stakeholder engagement continued
15

Challenges Outcomes
• IAG and each of the operating companies and platform
businesses have strengths, challenges and opportunities
related to their individual contexts. Themes of culture,
management practices and employee engagement are
reflected in the six-monthly OHI survey results and captured
through other employee communication channels, including
any company-specific engagement surveys. These outputs
contribute to the creation of company-specific people and
culture plans
• In the context of 2023, we continued to build capacity and
improve the resilience and flexibility of our operations, reflected
in increasing resourcing levels and flexibility to reflect
seasonality
• Challenges expressed by employees in 2023 included:
• opportunity to improve communication;
• desire to increase recognition of employees;
• need for greater clarity regarding the company's strategy;
• opportunity to support innovation by introducing effective
channels for sharing ideas;
• concerns about facilities and related matters; and
• building a more inclusive workplace.
• British Airways’ ‘Above & Beyond’ colleague recognition platform,
launched in 2022, received more than 100,000 recognitions in
2023 encompassing over 75% of all British Airways colleagues
• Vueling’s 'Make it Better' initiative encourages employee
contribution tonew ideas with the goal of generating savings and
increasing engagement, collaboration and innovation in the next
year. The platform generated 288 ideas, engaging 817 employees
in transforming concepts into reality
• Aer Lingus launched a new Aer Waves communication and ideas
platform in response to colleague feedback and launched a range
of development programmes, including the Supervisor
Development, Professional Development and Leadership
Development programmes
• Iberia’s 2023 Iberia Lab encouraged innovation aligned with the
five pillars of the ’Iberia Next Chapter’ strategic plan. Over 1,200
ideas were submitted by more than 800 employees, 20 finalist
ideas were selected by expert committees, with five winning
ideas being taken forward for implementation along with the
winners of the two ‘public vote’ awards
• Iberia formed a network of more than 200 Diversity
Ambassadors reflecting the engagement and commitment
ofemployees in promoting diversity and inclusion
• IAG Cargo incorporated active employee listening as part
ofitsculture plan with over 600 participants across different
shifts, directorates and continents
• Iberia Express launched English lessons in working hours for staff,
a flexible remote working scheme once a week and a new resting
room at Madrid Airport for crews
• Vueling, LEVEL, IAG Cargo and IAG Loyalty’s new offices,
designedincollaboration with employees, had a positive impact.
Facilitiesinclude new open spaces, gym, better
canteen,operations centres and space for in-house pilot and
cabin crewtraining. IAG Loyalty formed a ‘colleague squad’
withrepresentatives from across the business to engage
andleadonthe move to new offices providing valuable input
forthetransition
• IAG extended its suite of flexible benefits to include salary
sacrifice for gym membership and travel insurance as well
asarange of financial planning tools
16

Suppliers
Key metrics Why they are important
IAG is dependent on the performance
of key suppliers that provide goods
and services to our customers and
the Group including aircraft, engine,
maintenance, airport operations and
catering suppliers.
IAG Procurement, a centralised
Group function, provides a supplier
management framework to manage
individual suppliers by ensuring
consistent and compliant governance
throughout the supplychain, actively
managing keysuppliers.
16,000
individual suppliers
320
of the 582 aircraft inthe
IAG fleet were financed
using operating leases
(at end December 2023)
3,300
supplier-associated
initiatives to reduce
supplier CASK (cost per
available seat kilometre)
• Suppliers are fundamental to ensuring we meet the high
standards expected by customers and other key stakeholders,
to avoid potential impacts on operational and financial
performance, customer disruption and reputational damage
• Supply chain integrity is critical to meet customers’ needs,
ensure the reliability of our services and support IAG’s
sustainability agenda
• Suppliers adhere to the IAG Supplier Code of Conduct
whichlinks to our commitment to sustainable growth
• Collaboration brings strong reciprocal benefits – supporting
long-term working relationships, centred on clear and
proactivecontract management, shared goals and mutual
brandassociation
How we engaged Key topics
• Supplier Relationship Management principles help classify and
prioritise key suppliers and build relationships, as well as monitor
and manage supplier and contract performance
• Through the Hangar 51 accelerator programme we identified
start-up suppliers aligned to our sustainability strategy and
ourdesire to lead in innovation
• We assessed the sustainability performance of c.3,000 suppliers,
representing more than 90% ofour supplier spend through our
EcoVadis partnership. Results drive change in the supply chain,
with targeted remedial plans for identified areas for improvement
(less than 15%)
• The new Watershed partnership enabled engagement through
our carbon accounting programme, providing detailed
information about carbon emissions, allowing us to monitor
andimprove the supply chain’s environmental impact
• We became members of SEDEX, a world leader in responsible
sourcing, to support our assessment of labour, health and safety,
business ethics and environment risks across our supply chain. Its
methodology complies with EU legislation and supports UK
Modern Slavery Act compliance and will enable us to increase the
number of audits carried out to prevent anomalies in our supply
chain
• We attended a range of industry conferences across all supply
categories to collaborate with suppliers
• Engagement with aircraft and engine manufacturers occurs
atalllevels. We manage technical and operational issues through
regular contact and scheduled meetings. More senior employees
manage commercial activities and overall relationship
management up to and including the Group Chief Executive
• We have relationships with air-frame manufacturers through
regular engagement
• Engagement on lease renewals, returns and the in-service fleet
are largely managed by the Fleet teams in the operating airlines
• IAG’s Fleet and Environment teams engaged in detailed discussions
with major manufacturers to understand and influence activities
to support delivery of our environmentaltargets
• Benchmarking exercises
• RFIs, RFPs
• Resolution of commercial and contractual disputes
• Innovation programmes
• Contract Lifecycle Management
• Supplier Relationship Management
• ESG scoring and corrective action plans
• Access to more fuel-efficient aircraft with lower carbon
emissions, reduced community noise, improved local air
qualitythrough reduced NOX emissions
• Importance of positioning to take advantage of new
technology
• Role of major aircraft manufacturers to support delivery
ofenvironmental targets
• Supply chain Scope 3 emissions from suppliers’
manufacturingactivities
Stakeholder engagement continued
17

Challenges Outcomes
• Delays in the delivery of aircraft and maintenance, repair and
overhaul (MRO) activities on existing aircraft and engines from:
• supply chain issues;
• design and manufacturing capacity; and
• impact of extended regulatory certification processes
intheUS and EU.
• Supply-side limits for new aircraft through inability of aircraft
and engine manufacturers to meet demand. Although IAG is
well positioned, there are potential impacts from other airlines
on lease renewals and limiting flexibility in aircraft selection
• Suppliers must adhere to the Supplier Code of Conduct which
emphasises the importance of sustainability and fair treatment
of employees
• Prior to onboarding, and at least annually thereafter, suppliers
undergo screening for relevant compliance risks, such as
anti-bribery and corruption, export controls and trade
sanctions, and key suppliers are subject to financial risk
screening. Where necessary, mitigation plans are put in place
for suppliers identified as having potentially higher levels of risk.
Issues are flagged to the relevant risk owners within the Group
to take appropriate action
• To meet the requirements of the Supplier Code of Conduct and
legislation, including the UK Modern Slavery Act, suppliers are
subject to a risk assessment supported by a third party
(SEDEX) and if necessary, an audit process. Through SEDEX
we have accessed 38 relevant audits in 2023
• Risk-based third-party due diligence including screenings,
external reports, interviews and site visits serve to identify,
manage and mitigate bribery and corruption risks
• Ongoing assessment of sustainable performance to drive
change and improvement throughout the supply chain
• Risk of achieving environmental and social targets for Scope 1,
2 and 3 targets
• Third-party risk management is key, with a particular focus on
cybersecurity, and suppliers are required to adhere to IAG’s
security requirements
• Additional maintenance requirements for fleet using Pratt &
Whitney GTF engines. Refer to the Regulatory Environment
section for further information
• Secured access to more fuel-efficient aircraft with lower carbon
emissions, reduced community noise and improved airquality
• One of two airline groups given ’A’ rating for supplier
engagement for 2022 by the Carbon Disclosure Project (‘CDP’).
CDP stated that ‘Companies have much greater potential to
reduce global emissions when they engage with and cascade
action down theirsupply chains’. The shared carbon targets drive
levels of collaboration and innovation across IAG and IAGGBS,
key to delivering change to meet targets
• Engagement on long-term engine maintenance arrangements
with key engine suppliers mitigated the impact of supply chain
challenges on MRO operations of the Group’s airlines. Worked
closely with suppliers to protect deliveries, replan fleets to cope
with extended ground times or delivery delays
• Continued to secure access to new short-haul fleet with firm
orders and options addressing the inability of manufacturers to
meet demands. We acquired both new and used leased long-haul
aircraft where appropriate, and secured option delivery positions
for later this decade
• New risk-monitoring technologies will identify existing and future
supplier risks and enable a proactive, joint approach to anticipate
and mitigate risks through targeted action plans
• A Group-wide third-party risk management process was put in
place to integrate cybersecurity due diligence into procurement
sourcing and contracting processes, including ongoing
monitoring of the Group's top 200 suppliers. An inventory of
suppliers presenting cybersecurity, information or operational
risks enables tracking of different engagements with suppliers
throughout the Group
• A joint procurement partnership was created with another airline
for the purchase of the latest design aircraft tyres to optimise
costs, improve product quality and reduce carbon emissions from
longer lifespan tyres with less waste generated from replacement;
they are lighter, burning less fuel and reducing emissions; and
usefewer raw materials in production, reducing the
environmental impact
• Established a steering committee to consider issues arising from
the use of Pratt & Whitney GTF engines and oversee action to
mitigate operational disruption and offset cost impacts
Group Procurement breathes new life into
old uniforms
In 2023, Group Procurement supported the roll out of new
uniforms for British Airways and Iberia. As a result, we needed
asustainable solution for the responsible disposal or reuse
ofthe old uniforms. By engaging with existing suppliers and
proactively sourcing specialists in the area of fabric recycling,
Group Procurement expects to be able to give a second life to
the unneeded garments, by exploring options to turn the fabric
into customer blankets, remove logos and repurpose items to
be donated to those in need, or to fashion aircraft seat covers
from the remnant fabrics.
18

Shareholders, lenders and other financial stakeholders
Key metrics Why they are important
This includes equity andcredit
investors, credit lenders, research
analysts, credit rating agencies
andaircraft operating lessors.
Ourinvestors are looking for
astable business with a strong
balance sheet and sustainable
demand for travel. This, along with
acompetitive cost base which
allows our airlines to offer attractive
fares, will drive competitive margins
and Return on Invested Capital
greater than the Group’s cost of
capital, leading to positive free cash
flows and the opportunity for
regular shareholder returns as well
asfurther capital distributions,
alongside continued investment in
the business.
Significant shareholders
at 31 December were
Qatar Airways
25.1%
Capital Group
5.0%
Key metrics used by the
Investor Relations team
in its engagement
include:
• Number of investor and
analyst meetings held
• Consensus
management
• Share price valuation
• As the main providers of capital, this stakeholder group enables
IAG to invest inand grow the Group’s businesses. Investors,
particularly long-term shareholders, share the risk of the
business
• Strategy and business plan delivery requires:
• external funding for the substantial amount of capital
expenditure required to replace or grow our fleet; and
• efficient external capital to fund our operations and invest
inour asset base in a cost-effective manner.
• Their views are critical in supporting strategy formulation,
which drives operational and financial performance to generate
and optimise sustainable returns
• Availability and access to external capital on competitive terms
influences the financial strength and positioning of the Group
and its operating companies
How we engaged Key topics
• Active and frequent communication through open and
transparent dialogue to understand performance/concerns,
inperson or online
• Annual General Meeting and four quarterly results briefings where
shareholders, investors and equity and credit analysts could
interact with theBoard (General Meetings) and management
• Capital Markets Day (CMD) where Board members, the
Management Committee and other senior management from
across the Group engaged with investors and analysts. A wide
range of investors, credit providers and lenders were invited,
including current and previous shareholders, and sell-side equity
analysts from across Europe. For more information see the
summary of the CMD 2023 at the end of the Group Chief
Executive’s review
• Mailbox for institutional and individual shareholders
• Management attendance at investor conferences hosted
bymajor financial institutions
• Investor Relations (IR) organises and attends roadshows globally
to meet investors with diverse perspectives, with directors and/
or management depending on the focus. Road shows were held
in London, Madrid, Paris, the US, Tokyo and Hong Kong during
2023
• IR has ongoing dialogue with equity, credit and ESG research
analysts to understand investors’ views oftheGroup
• Group Treasury engages with credit analysts, global banks,
debtinvestors and credit rating agencies
• The Chairman and Remuneration Committee Chair met with
some of our larger investors inone-to-one meetings
• Impacts of potential economic recession and geopolitical issues
on consumer demand, especially Europe
• Recovery in volume of business customers, particularly at
British Airways
• Relative competitor performance, in particular their capacity
strategies
• Performance – operating results including unit revenue and
unitcosts, capacity and traffic data, gross and net debt, cash
liquidity, free cash flow generation, cash and credit facilities
• Strategic and operational issues and initiatives – Group and
operating company
• Funding – cash flows, sources, leverage, liquidity
• Capital spending and debt repayment commitments
• ESG performance, including climate change initiatives
• Long-term growth and financial targets, such as those
communicated at the CMD
• Employee negotiations on pay, cost-of-living, productivity,
competitiveness and financial performance
• M&A, industry consolidation (Air Europa)
Stakeholder engagement continued
19

Challenges Outcomes
• Successfully communicating IAG's investment case to drive
wider share ownership and share price appreciation against a
backdrop of wider macroeconomic and geopolitical
uncertainty
• Building relationships with existing and new investors to
understand their priorities and to ensure support for strategy
and management proposals
• Funding mechanisms, including dividend policy decisions, may
not suit all shareholder or financial stakeholder profiles,
requiring a balancing of shareholder and financial stakeholder
views with the corporate interest
• Increased focus on climate change and diversity has potential
reputation impacts and requires consideration of shareholder
expectations
• IAG held a CMD in November and the presentations and further
details of the day are set out in CMD page. There was a question-
and-answer session with all the members of the Management
Committee participating and further interaction between external
and internal attendees during the day
• Feedback received from investors and analysts who attended the
CMD was shared with the Board. This included recognition of
IAG’s ability to generate free cash flow, its focus on the balance
sheet and its commitment to paying dividends. This feedback has
been considered in reporting and strategic discussion
• Feedback is also collated both formally and informally after
results, investor meetings and investor events which is shared
with the Board and senior leaders
• Meetings were held with investor governance and ESG
representatives, including members of the IAG Sustainability
team, in which our sustainability policies, initiatives and targets
were explained and discussed
• A customer relationship management system records
engagement, tracks meetings, notes topics, questions and
discussions with an automatic feedback collection mechanism
basedon determined questions
Q&A session with IAG’s
Management Committee at the
recent IAG Capital Markets Day
inNovember 2023
20

Government and Regulators
Key metrics Why they are important
Due to the nature of its business,
IAG engages with a wide range of
government and regulatory
stakeholders. This includes
members of national parliaments,
ministers and officials of national
governments across multiple
departments (including transport,
trade, finance, tourism or
international affairs), MEPs and
other representatives of the
institutions of the European Union
(including at DG MOVE, and other
relevant directorates as well as
representatives of individual
member states in Brussels). This
wide stakeholder body also
encompasses civil aviation
regulators in the countries in which
our airlines are based and the
countries of destination. We also
engage with competition
authorities, including DG-COMP in
the EU, the CMA in the UK and, for
aviation alliances, the Department
of Transportation in the US.
• We use quantitative and qualitative
metrics to monitor and adjust our
engagement plan. Quantitative metrics
include the different types of
engagement, range of policies, and
seniority of engagement. Qualitative
appraisal includes assessment of policy
outcomes and tracking the evolution of
policy dossiers to ensure that the
Government Affairs function is targeted
appropriately
• We monitor quantitative metrics, which
for 2023 included:
• more than 80 contacts held with
stakeholders in EU Institutions;
• meetings with more than 70 Members
of the UK Parliament and Peers;
• five visits organised for policymakers
to British Airways and Vueling; and
• participation in 23 government-to-
government air services negotiations.
• Government policies and decisions impact
many aspects of IAG’s business across
awide range of areas including transport,
consumer rights, practical operational issues,
commercial practices, andthe environment.
We must comply withrelevant regulations
but seek to engageresponsibly to influence
policy developments to benefit our
customers andachieve our business goals
• Engagement with policymakers is essential
to understand plans and encourage
proportionate outcomes to achieve our
vision to be a world-leading airline group on
sustainability and ensure we collectively
meet our global climate goals
• Our airlines are subject to regulation by civil
aviation regulators in the countries of
registration and those of destination,
requiring frequent engagement on safety,
security, consumer rights and a variety
ofother policy and administrative issues
• Regular engagement around the world
isneeded to manage market access issues
under international air services agreements
and secure the necessary operating permits
How we engaged Key topics
• IAG’s head office Government Affairs team undertakes direct engagement with
stakeholders in all the countries in which our airlines are based as well as with EU
institutions in Brussels. It coordinates the efforts of the Government Affairs teams
of individual operating companies to ensure consistent and coordinated approaches
• We engage directly with policy, market and regulatory stakeholders on questions
ofinterest to convey IAG positions and contribute technical expertise to discussions.
This has included arranging visits to our airlines’ bases to enhance understanding of
operations and the impacts of policy proposals
• As well as direct contact, we engage through various international, regional,
andlocal trade associations as well as general business organisations
• This engagement involves senior executives including the Group Chief Executive,
Management Committee members, and senior executives from airline operating
companies where appropriate, mainly in the EU, the UK, Spain and Ireland
• IAG aims to provide a factual basis in support of its policy positions and in 2023
commissioned an extensive study on the Group’s economic impacts from PwC
andadditional research on the benefits of Sustainable Aviation Fuels
• In the field of international air services, IAG representatives joined diplomatic talks
wherever possible including those of the EU-US Joint Committee on aviation
andICAO’s Air Services Negotiation Event (ICAN) in Saudi Arabia in December
tosupport operating companies’ access to market
• Impacts of the war in Ukraine and the Middle
East and associated sanctions regimes
• Sustainability, particularly climate and
decarbonisation and all aspects of
environmental policy affecting aviation such
as availability of and support for investment
in SAF and noise impacts
• Economic impacts of aviation, including
taxpolicy and economic regulation
• Infrastructure regulation including airspace
modernisation, the Single European Sky,
airport charges and slot allocation policy
• Diversity and inclusion for employment
aswell as development of skills
• Consumer rights
• Safety, security and immigration rules
• International relations including air service
agreements and wet leasing, and
immigration policy
Stakeholder engagement continued
21

Challenges Outcomes
• External factors such as air traffic control
(ATC) strikes or geopolitical events such
as the war in Ukraine and the Middle East
can have relevant impacts on our
business
• Political upheaval presents a challenge
toconsistent policymaking. Changes
inpolitical leadership through electoral
cycles are anticipated
• With sector recovery post pandemic,
decarbonisation is a predominant area
ofinterest for our stakeholders, requiring
engagement with regulators on various
aspects of IAG’s industry position and
commitments in relation to new
technology
• Consumer rights and customer service
are of increasing interest to our
stakeholders, bringing additional interest
in operational performance from
stakeholders in the US, EU and UK
• IAG’s airlines regularly engage in
discussions with governments and
aviation authorities in their relevant
markets to respond to and mitigate
therisk that states use international air
service agreements to promote the
interests of their own airlines, given their
view that international air services and
national carriers are strategic interests
• Sustainability – From both direct meetings and joint efforts with industry and trade
associations on EU climate-related issues, relevant IAG requests were included in
therevision and development of different legislation on sustainability, for example:
• 20 million free allowances were allocated for SAF use for 2024-2030 (and could
befurther extended until 2034); and
• the recognition of price stabilisation mechanisms (contracts for difference) in view
ofthe ETS Innovation Fund or the inclusion of aviation as part of the EU Taxonomy.
In the UK, direct engagement and indirect contacts through trade associations were
instrumental in securing a legal requirement to consult on the form ofaprice support
mechanism to encourage investment in SAF plants in the UK.
Regular IAG opinion surveys of UK Members of Parliament on reputation and policy
showed increasing support for the use of SAF and other innovations, rather than
demand management to reach net zero emissions.
Refer to the Sustainability section of this report for more information
• Customer service and resilience – The European commitment to sustainability saw
afocus on improving consumer digital access and travel options. Initiatives such as the
EU proposal for digital multi-modal services, to provide greater accessibility to other
modes of transport, were postponed in line with thesector's request not to force
intermediation that could increase ticket prices forEuropean customers
Regular engagement with the UK Department for Transport’s Resilience team to
ensure a proper appreciation of operational disruptions. Forexample, understanding
the impacts of bad weather on operations atcongestedairports
• Airport charges – IAG made the casefor strong regulation of monopoly providers of
airport services so that reasonable levels of charges are set. This engagement
contributed to Spain keeping charges flat in 2023. However, due to combination of
existing adjustment mechanisms and inflation rates, an increase of 4% is expected for
2024, lower than that initially proposed by AENA. In the UK, the regulatory authorities
recognised IAG’s and other airlines’ arguments and confirmed a downward price path
for Heathrow’s charges for the remainder of the regulatory period to 2026, and denied
an additional £2 billion that Heathrow airport requested that would have been reflected
in charges to airlines. Refer to the Regulatory Environment section of the report
• Market access – IAG supported operating companies to secure the necessary market
access through engagement in international negotiations, including British Airways’
operating permits for new destinations in the Caribbean or for BA Euroflyer in North
Africa, as well as enabling new code-share partnerships, including with Indigo in India
Proposed revision of EU Slot Regulation
The existing EU Slot Regulation system enabled the EU
tobecome one of the most connected regions, benefiting
EUcitizens by providing more travel alternatives and allowing
competing business to develop. It allows airlines to plan
schedules with predictability, providing the essential stability
fornetwork airlines to build efficient hubs. Ithas also allowed
low-cost carriers to build and grow operations, increasing the
number of routes that they serve.
In 2022/2023 the European Commission explored the possibility
ofa revision of the EU Slot Regulation with the objective
offurther enhancing the EU slots system and promoting
sustainability. One of the aspects under discussion was the
80%rule: if an airline operates 80% of a slot (landing and take-off
right) at a given airport in a summer or winter season, itmaintains
the right to operate the slot again the corresponding next season.
This threshold builds in the flexibility airlines depend on to
reallocate resources and minimise the impact of unavoidable
disruption of passengers. This allows themaximum number
ofpassengers to get to their destination in atimely manner.
Forexample, an airline may take one aircraft from a route where
there are several daily flights, to replace a grounded aircraft for
adestination served by only one daily flight. Therevision of this
rule in the EU would limit the flexibility toreallocate resources,
with asubsequent negative impact forpassengers.
Through engagement, IAG demonstrated that although the
objective of an airline was to operate to its planned schedule,
inexceptional situations such as technical problems, adverse
weather, industrial actions or other unavoidable last-minute
disruption, cancellations may be necessary. During the
consultation process opened by the European Commission,
IAGshared detailed know-how and experience. IAG also
organised technical meetings between the senior experts of the
airline operating companies and the relevant decision-makers
inBrussels and Madrid. IAG also engaged directly with relevant
stakeholders at EU Institutions and at a national level in Spain and
Ireland. As it is a technically complex topic, we promoted simpler
messages through our trade associations to ensure thatthe
negative consequences of the revision of the slots regulation for
passengers could be easily understood by non-aviationexperts.
As a result of the inputs from the airline industry, the EU halted
its policy plans in this area.
22

Strengthening
our financial
performance
IAG achieved strong operating profits in
2023, as we continue to transform our
businesses to deliver world-class
operating margins and returns on
invested capital. This result led to strong
cash generation in the year, strengthening
our balance sheet, with net leverage back
within IAG’s target range and improved
credit ratings, and enabling us to invest in
improving our customer experience.
Delivering world-class operating margins and returns on
invested capital
In 2023, the Group benefited from its high-quality and
increasingly diverse revenue stream, with recovery seen in all
our businesses and with particular strength in Spain and the
North and South Atlantic. Passenger capacity operated across
the year was close to the levels operated in 2019 before the
COVID-19 pandemic and we were able to generate higher unit
revenues than in 2019, which offset higher fuel costs and
supplier cost inflation.
Nicholas Cadbury
Chief Financial Officer
Financial overview
23

The result was a strong operating profit before exceptional
items of €3,507 million compared with €1,247 million in 2022.
The shape of the recovery differed across our businesses, with
the strongest recovery in Iberia and Vueling, both of which
delivered record operating profits, with Aer Lingus and British
Airways also seeing a significant improvement on the previous
year.
The recovery has been led by leisure travel across the Group’s
networks and in all cabins, with the premium leisure segment
showing particularly strong performance. Corporate travel also
improved versus the previous year, but at a slower rate than
anticipated. We continue to grow other revenue streams,
including IAG Loyalty, which achieved an operating profit of
£280 million. Our cargo business saw increased volumes in
2023, but also reduced yields, linked to increases in global
cargo capacity, the macroeconomic conditions and the reversal
of the positive impact on yields of supply chain disruption in
2022. However, its focus on increasing its premium product
business contributed to delivering yields above 2019 levels. Fuel
costs remained volatile during the year, with the average fuel
unit cost similar to 2022, but up over 30% compared with 2019.
Non-fuel unit costs improved 4.4% compared with the previous
year, with our ongoing transformation programme partially
offsetting the impact of inflation; we also made some additional
investment in the airlines’ operations, IT and the customer
experience.
Disciplined approach to capital allocation to support
sustainable growth and margins
The Group’s financial performance and cash generation in 2023
allowed us to deliver a strengthened balance sheet, with
positive free cash flow of €1,320 million enabling a reduction in
leverage, which is now at 1.7 times net debt to EBITDA before
exceptional items, back within our target maximum of 1.8 times.
Both S&P and Moody’s increased their credit ratings of the
Group, with S&P returning IAG to investment grade. British
Airways’ separate credit ratings were also upgraded, with
British Airways’ rating now at investment grade with S&P and
Fitch.
With our strong cash generation, we took the opportunity to
rebalance our mix of gross debt and cash and in the second
half of the year we repaid €3,271 million of non-aircraft debt in
British Airways, Iberia, Vueling and Aer Lingus. These loans,
raised due to the impacts of the COVID-19 pandemic, had
floating interest rates, which had risen significantly over the last
two years, and hence were amongst the most expensive of the
Group’s debt; following the early repayment of this debt the
Group will benefit from a reduced interest expense in future
years.
At a Group level we also repaid a €500 million bond on
maturity and did not seek refinancing. These actions have
resulted in a reduction in gross debt of €3,902 million in 2023.
We retain strong liquidity, with total liquidity at 31 December
2023 of €11,624 million, including cash of €6,837 million and
committed and undrawn general and aircraft facilities of €4,787
million.
Our free cash flow of €1,320 million was after capital
expenditure of €3,544 million. We continue to invest in our
strategy and are rebuilding capacity with a more modern, fuel-
efficient fleet. We also invested in our infrastructure, customer
experience and sustainability. In addition to organic growth, we
are also pursuing inorganic growth opportunities where they
offer a good strategic fit. In February 2023, we agreed with
Globalia the acquisition of the remaining 80% of equity in Air
Europa, subject to regulatory approval in 2024.
It is pleasing to finish 2023 having achieved the objective we
set down in these pages in last year’s report: to return the
Group to historical levels of profit and to continue to
strengthen the balance sheet. We are aware of the
uncertainties we face as we enter 2024, including geopolitical
events outside of our control. We will continue to strengthen
our balance sheet, transform our businesses and apply
discipline to how and where we allocate capital, in order to fulfil
our objective to deliver sustainable shareholder returns.
Nicholas Cadbury
Chief Financial Officer
24

In the commentary below, references are made in selected
places to variances versus 2019 to aid understanding, due to the
significant reductions in capacity the Group’s airlines made due
to the impact of the COVID-19 pandemic in the period from
2020 to 2022. It is anticipated that 2023 will be the last year for
which analysis versus 2019 is required.
IAG capacity
In 2023, passenger capacity operated, measured in available seat
kilometres (ASKs), rose by 22.6% versus 2022. For the year,
capacity operated was 95.7% of 2019 levels and capacity was
almost fully restored to 2019 levels by the end of the year,
reaching 98.6% of 2019 levels in the final quarter.
Capacity operated by region
Year to 31
December 2023
ASKs
higher/
(lower)
v2022
ASKs
higher/
(lower)
v2019
Passenger
load factor
(%)
Higher/
(lower)
v2022
Higher/
(lower)
v2019
Domestic
7.8 % 8.4 % 89.5 4.0pts 2.3pts
Europe
15.4 % (3.1) % 85.9 4.4pts 2.3pts
North
America
23.0 % 3.2 % 82.9 3.6pts (1.2)pts
Latin America
and
Caribbean
18.8 % (1.7) % 87.6 2.5pts 1.2pts
Africa, Middle
East and
South Asia
32.2 % 1.1 % 83.3 2.2pts 0.3pts
Asia Pacific
258.0 %
(59.7) % 88.4 4.4pts 2.6pts
Total network
22.6 % (4.3) % 85.3 3.5pts 0.7pts
Whilst capacity was fully restored to most of IAG’s markets, the
recovery in the Asia Pacific region was slower, linked to later
easing of COVID-19 restrictions in the region.
Capacity operated by airline
Year to 31
December 2023
ASKs
higher/
(lower)
v2022
ASKs
higher/
(lower)
v2019
Passenger
load factor
(%)
Higher/
(lower)
v2022
Higher/
(lower)
v2019
Aer Lingus
20.3 % 4.4 % 80.6 3.7pts (1.2)pts
British
Airways
28.1 % (9.9) % 83.6 3.8pts 0.0pts
Iberia
18.5 % 3.2 % 87.2 3.0pts 0.0pts
LEVEL
33.1 % (32.8) % 93.4 3.7pts 9.5pts
Vueling
10.5 % 8.5 % 91.4 4.2pts 4.5pts
Group
22.6 % (4.3) % 85.3 3.5pts 0.7pts
In 2023, British Airways had only restored 90.1% of its total 2019
capacity, as the substantial majority of the Group’s capacity to
the Asia Pacific region in 2019, for which recovery following
COVID-19 has been slower, was operated by British Airways.
Capacity for British Airways was also impacted by the
accelerated retirement of its Boeing 747-400 fleet during the
COVID-19 pandemic and further restoration of capacity is
planned for British Airways in 2024 and 2025. The reduction in
LEVEL versus 2019 relates to the discontinuation of operations
from Paris Orly in 2020, with the capacity of LEVEL’s operation
in Barcelona up 32.4% versus 2019.
Domestic and Europe
Capacity and passenger numbers in IAG’s Domestic markets,
which are predominantly within mainland Spain and to the
Canary and Balearic Islands, increased in line with strong leisure
demand, with capacity 7.8% higher than 2022, and with a higher
passenger load factor of 89.5%, which was up 4.0 points versus
the previous year. Capacity and the passenger load factor were
also higher than in 2019, up 8.4% and 2.3 points respectively.
The Group’s capacity in Europe was 15.4% higher than in 2022,
also boosted by the demand for leisure travel. Aer Lingus began
services to Brindisi, Kos and Olbia. British Airways expanded the
flying undertaken by its subsidiary launched at London Gatwick
airport in 2022, BA Euroflyer, with new routes including Corfu,
Mykonos, Innsbruck, and Fuerteventura. Vueling’s new routes
include a service from Barcelona to Rovaniemi (Finland) and the
airline added an extra aircraft at its Bilbao base, with six new
routes launched. Passenger load factor for the region was up 4.4
points versus 2022 to 85.9% and was up 2.3 points versus 2019.
North America
The Group’s airlines launched new routes and increased services
to North America, one of the Group’s core profit pools, with
capacity 23.0% higher than in 2022 and 3.2% higher than in 2019.
Aer Lingus started flights to Cleveland and resumed its route to
Hartford, Connecticut, together with additional frequencies to
Los Angeles, Seattle, Orlando, and Washington DC. The airline
will resume its service to Minneapolis and launch a new route to
Denver in 2024. British Airways launched services from London
Heathrow to Cincinnati and from London Gatwick to Vancouver,
a destination already served from its London Heathrow hub. The
airline plans further increases in 2024, including doubling its
services to San Diego in the summer. Iberia increased its
recently-launched routes to Dallas and Washington to year-
round services. LEVEL increased its capacity to North America
by 23.8% in 2023 and in 2024 will increase further, with a new
route from Barcelona to Miami and significant capacity increases
to Boston, Los Angeles and New York, JFK. Passenger load
factor for the region was up 3.6 points versus 2022 to 82.9% and
was down 1.2 points versus 2019.
Financial review
25

Latin America and Caribbean (LACAR)
IAG’s other core international profit pool is the Latin America
and Caribbean region, including Iberia’s network of 20 daily
flights to the region and British Airways flights to the Caribbean.
British Airways launched flights from London Gatwick to Aruba
and Guyana. Iberia increased its capacity to primary cities such
as Bogotá, Lima, Mexico City, Montevideo and Quito. LEVEL
increased its route to Santiago de Chile to operate as a year-
round service, with LEVEL’s capacity to the region up 45.4%
versus 2022. IAG’s capacity in LACAR grew 18.8% versus 2022,
although was still down 1.7% on 2019, linked to the retirement of
aircraft following the COVID-19 pandemic, with further long-haul
aircraft due for delivery in 2024. Passenger load factor for the
region at 87.6% increased 2.5 points versus 2022 and was up 1.2
points versus 2019.
Africa, Middle East and South Asia (AMESA)
Capacity to this region was up 32.2% on 2022 and up by 1.1%
versus 2019. BA Euroflyer launched a service from London
Gatwick to Sharm El Sheikh. British Airways began flights from
London Gatwick to Accra and the airline will resume flights to
Abu Dhabi in 2024. Iberia started services to Cairo and launched
a new route to Doha, which will serve to develop its network
with partner Qatar Airways. Vueling’s new routes from Barcelona
included Luxor and Sharm El Sheikh. Passenger load factor for
the region was up 2.2 points versus 2022 to 83.3% and was up
0.3 points versus 2019.
Asia Pacific
During 2023, the Asia Pacific continued to be the least
recovered region from COVID-19, as restrictions linked to the
pandemic were lifted later than in other markets and industry
recovery has been slower. British Airways services to Shanghai
and Beijing resumed in the summer 2023 travel season and
during the year the airline increased frequencies to Hong Kong
and Tokyo Haneda. Iberia will re-open its route to Tokyo in
October 2024. The increases during 2023 led to capacity 258.0%
higher than 2022 but still 59.7% lower than 2019, with the
passenger load factor for the region up 4.4 points versus 2022
to 88.4% and up 2.6 points versus 2019.
Basis of preparation
In its assessment of going concern over the period of at least 12
months from the date of approval of this report (the ‘going
concern period’), the Group has prepared extensive modelling,
including considering a severe but plausible downside scenario.
Having reviewed these scenarios and sensitivities, and the
Group’s aircraft financing requirements, the Directors have a
reasonable expectation that the Group has sufficient liquidity to
continue in operational existence over the going concern period,
and hence continue to adopt the going concern basis in
preparing the consolidated financial statements.
Summary
The Group was able to substantially restore its capacity
compared with 2019 and saw recovery in all its businesses, with
particular strength in Spain and the North and South Atlantic.
Fuel costs were substantially higher than in 2019 and the Group
also faced higher supplier cost inflation. The Group was able to
successfully offset both of these challenges through its high-
quality and increasingly diverse revenue stream, and through
continued transformation of its businesses. The net result was an
Operating profit for the year of €3,507 million, versus an Operating
profit of €1,278 million in 2022. The Profit after tax for the year
was €2,655 million, versus a profit of €431 million in 2022.
Profit for the year
Statutory results
€ million 2023 2022
1
Higher/
(lower)
vly
Operating profit 3,507 1,278 2,229
Profit before tax 3,056 415 2,641
Profit after tax 2,655 431 2,224
1 The 2022 results include a reclassification to conform with the current
year presentation for the Net gain on sale of property, plant and
equipment within Operating profit. Accordingly, for the year to 31
December 2022, the Group has reclassified gains of €22 million from
Other non-operating credits to Expenditure on operations. There is no
impact on the Profit before or after tax.
26

Summary of exceptional items
The Group uses Alternative performance measures (APMs) to
analyse the underlying results of the business excluding
exceptional items, which are those that in management’s view
need to be separately disclosed by virtue of their size or
incidence in understanding the entity’s financial performance.
There were no exceptional items in 2023. During 2022, the
Group recorded exceptional credits relating to the partial
reversal of a fine issued to British Airways in 2010 and the
reversal of the impairment of certain aircraft returned to service
in 2022.
A summary of the exceptional items relating to 2022 is given
below, with more detail in the Alternative performance measures
section, including a breakdown of the exceptional items by
operating company.
Income statement
line
Exceptional item
description
Credit/(charge) to the
Income statement
€ million
2023 2022
Property, IT and
other costs Reversal of fine – 23
Depreciation,
amortisation and
impairment
Impairment reversal
of fleet and
associated assets – 8
Tax
Tax on exceptional
items – (2)
The Operating profit before exceptional items for 2023 of
€3,507 million was €2,260 million better than the Operating
profit before exceptional items of €1,247 million for 2022, driven
by the increased capacity and higher revenues, net of higher
operating costs, as explained further below. The Profit after tax
and before exceptional items was €2,655 million, €2,253 million
higher than the 2022 profit of €402 million.
Alternative performance measures (before
exceptional items)
€ million
2023 2022
1
Higher/
(lower)
vly
Operating profit 3,507 1,247 2,260
Profit before tax 3,056 384 2,672
Profit after tax 2,655 402 2,253
1 The 2022 results include a reclassification to conform with the current
year presentation for the Net gain on sale of property, plant and
equipment within Operating profit. Accordingly, for the year to 31
December 2022, the Group has reclassified gains of €22 million from
Other non-operating credits to Expenditure on operations. There is no
impact on the Profit before or after tax.
Revenue
€ million 2023
Higher/
(lower)
vly
Higher/
(lower)
vly (%)
Passenger revenue 25,810 6,352 32.6 %
Cargo revenue 1,156 (459) (28.4) %
Other revenue 2,487 494 24.8 %
Total revenue 29,453 6,387 27.7 %
Total revenue increased €6,387 million versus 2022, after
adverse foreign exchange rate movements of €490 million,
mainly due to the translation of British Airways’ and IAG
Loyalty’s results from pound sterling into euro, which resulted in
an adverse variance of €379 million versus 2022.
Passenger revenue
The increase in Passenger revenue of €6,352 million, or 32.6%,
was ahead of the increase in passenger capacity of 22.6%, driven
by higher yields and higher load factors than in 2022. The
growth in Passenger revenue was linked to the reopening of
markets, strong leisure demand, together with increases in ticket
prices to reflect higher fuel prices and supplier price inflation.
The recovery in corporate travel was slower than that of leisure
travel, with the Group’s premium leisure segment continuing to
perform strongly.
The passenger load factor for the year of 85.3% was 3.5 points
higher than in 2022 and 0.7 points higher than in 2019.
Passenger yields, measured as passenger revenue per revenue
passenger kilometre (RPK) were 3.8% higher than in 2022 and
up 19.0% on 2019. The resulting passenger unit revenue
(passenger revenue per ASK) for the year was 8.2% higher than
in 2022 and 20.1% higher than in 2019.
Cargo revenue
Cargo revenue, at €1,156 million, was 28.4% lower than in 2022.
Cargo volumes, measured in cargo tonne kilometres (CTKs),
were 17.2% higher than the previous year, as the Group’s airlines
further restored their operations, leading to an increase in both
passenger and cargo capacity. Cargo yields, measured as cargo
revenue per cargo tonne kilometre, were 38.9% lower than in
2022, reflecting the substantial growth in global cargo capacity
across the industry, together with softer market demand,
reflecting the macro-economic conditions. In 2022, cargo yields
had benefited from disruption to global supply chains, and
disruption to shipping, particularly in the first half of the year.
Cargo yields benefited from a growth in premium products,
enabled by the opening of a new premium cargo facility at
London Heathrow. At Madrid, IAG Cargo’s investment in a
perishable goods handling facility was completed, further
boosting cargo handling capacity.
Cargo revenue increased by €39 million, or 3.5% versus 2019.
The increase was primarily driven by a 23.8% increase in cargo
yields compared with 2019, which included the impact of
transformation initiatives. The higher cargo yields more than
compensated for a decline in volumes, which were 16.4% lower
than in 2019, mainly due to weaker market demand and reduced
cargo capacity, particularly from the Asia Pacific region.
Financial review continued
27

Other revenue
One of the Group’s strategic imperatives is to drive earnings
growth through asset-light businesses, with the growth of IAG
Loyalty a particular priority. The impact of the growth in IAG
Loyalty contributes both to the airlines’ Passenger revenue and
to Other revenue, through both the issuance and redemption of
its loyalty currency, Avios. IAG Loyalty delivered another strong
year of growth in the number of members collecting Avios,
including through its partnership with American Express. IAG
Loyalty’s Other revenue was up 61% versus 2022 to €524 million.
The largest Other revenue streams for the Group are BA
Holidays and Iberia’s maintenance, repair and overhaul (MRO)
business. BA Holidays grew revenues in line with the continued
increase in flying activity and holiday and hotel services revenue
increasing by €133 million to €938 million. Iberia’s MRO business
saw increased engine maintenance activity for third-party
airlines, with revenues from maintenance and overhaul services
up €155 million to €683 million. Revenue from ground handling,
at €195 million, was flat versus 2022. After a competitive tender
process for ground handling contracts, the final resolution in
September 2023 resulted in the loss of third-party handling
contracts at eight airports for Iberia and as a result Iberia will see
a reduction in ground handling activity and revenues in 2024.
Overall for the year, Other revenue was up 24.8% versus 2022 to
€2,487 million, 29.5% higher than in 2019.
Operating costs
Total operating expenditure rose from €21,788 million in 2022 to
€25,946 million in 2023, linked to the higher volume of flights
and passenger numbers and after favourable foreign currency
movements of €408 million, of which €351 million were due to
the translation of the operating costs of British Airways and IAG
Loyalty from pound sterling into euros.
Employee costs
€ million 2023
Higher/
(lower)
vly
Higher/
(lower)
vly (%)
Employee costs
5,423 776 16.7 %
The rise in Employee costs of €776 million or 16.7% versus 2022
reflected the continued restoration of the Group’s capacity and
the related increase in employee numbers, as well as the
investment in British Airways’ London hub to improve
operational performance. Average headcount for the year was
69,762, up 9,962 or 16.7% versus 2022. The Group agreed pay
deals with the substantial majority of its bargaining groups and
employees during 2023.
On a unit basis per ASK, Employee costs were down 4.8%
versus 2022.
Fuel, oil costs and emissions charges
€ million 2023
Higher/
(lower)
vly
Higher/
(lower)
vly (%)
Fuel, oil costs and emissions
charges 7,557 1,437 23.5 %
Fuel, oil costs and emissions charges were up €1,437 million
versus 2022, principally reflecting increased flying volumes. In
2022, the impact of the significant increase in commodity fuel
prices, following the Russian invasion of Ukraine in February of
that year, was mitigated by the Group’s fuel hedging
programme. In 2023, whilst average spot fuel prices linked to
fuel purchase contracts were 17% lower than in 2022, the impact
of hedging was neutral, with the result that the Group’s effective
fuel price after hedging was similar to the previous year. Foreign
exchange movements accounted for only €6 million of the
increase, with the impact of a weaker US dollar against the euro
and pound sterling offset by translation exchange between the
pound sterling and euro. Within Fuel, oil costs and emissions
charges, the cost of complying with emissions trading schemes
was €238 million, up from €134 million in 2022, reflecting both
the higher level of capacity flown, market prices under such
schemes, and the reduction in free allowances issued across the
EU and UK.
On a unit basis per ASK, Fuel, oil costs and emissions charges
were up 0.7% versus 2022.
Jet fuel price trend ($ per metric tonne)
Dec 17
Mar 18
Jun 18
Sep 18
Dec 18
Mar 19
Jun 19
Sep 19
Dec 19
Mar 20
Jun 20
Sep 20
Dec 20
Mar 21
Jun 21
Sep 21
Dec 21
Mar 22
Jun 22
Sep 22
Dec 22
Mar 23
Jun 23
Sep 23
Dec 23
0
200
400
600
800
1,000
1,200
1,400
1,600
28

Fuel hedging
The Group seeks to reduce the impact of volatile commodity
prices by hedging prices in advance. The Group’s current fuel
hedging policy was approved by the Board in May 2021 (and has
been regularly reviewed for appropriateness by the Audit and
Compliance Committee subsequently) and is designed to
provide flexibility to respond to both significant unexpected
reductions in travel demand or capacity and/or material or
sudden changes in jet fuel prices. The policy allows for
differentiation within the Group, to match the nature of each
operating company, and the use of call options for a proportion
of the hedging undertaken. The policy operates on a two-year
rolling basis, with hedging of up to 60% of anticipated
requirements in the first 12 months and up to 30% in the
following 12 months, and with flexibility for low-cost airlines
within the Group to adopt hedging up to 75% in the first 12
months. For all Group airlines, hedging between 25 and 36
months ahead is only undertaken in exceptional circumstances.
Fuel consumption
The Group continued to benefit from reduced fuel consumption,
associated with the investment in new fleet, with 35 newer-
generation and more fuel-efficient aircraft entering service in the
year. Increased passenger load factors versus 2022 also
contributed to reduced carbon intensity, measured as grammes of
CO
2
per passenger kilometre, which was down 3.6% versus 2022.
Supplier costs
€ million 2023
Higher/
(lower)
vly
Higher/
(lower)
vly (%)
Handling, catering and other
operating costs 3,849 878 29.6 %
Landing fees and en-route
charges 2,308 418 22.1 %
Engineering and other aircraft
costs 2,509 408 19.4 %
Property, IT and other costs
1
1,058 108 11.4 %
Selling costs 1,155 235 25.5 %
Currency differences 26 (115) (81.6) %
Total Supplier costs 10,905 1,932 21.5 %
1 For 2022 includes an exceptional credit of €23 million related to the
partial reversal of the historical fine, plus accrued interest, initially issued
by the European Commission to British Airways for involvement in cartel
activity and recognised as an exceptional charge in 2010. Further
information is given in the Alternative performance measures section.
Total Supplier costs rose by €1,932 million, or 21.5% to €10,905
million, slightly below the increase in capacity. Supplier costs
were impacted by continued high levels of inflation and
disruption costs, although the impact was partially mitigated by
the Group’s procurement and transformation initiatives.
Supplier costs include a €26 million currency differences charge
in 2023 versus a €141 million currency differences charge in the
previous year; 2022 had been impacted by a significant
strengthening of the US dollar against both the pound sterling
and the euro versus 2021. Total foreign currency impacts on
Supplier costs, including currency differences, were €298 million
favourable versus 2022, including a favourable impact of €163
million related to translating British Airways’ and IAG Loyalty’s
supplier costs from pound sterling into euro and the €141 million
favourable currency differences charge outlined above.
On a unit basis per ASK, Supplier costs were down 1.1% versus 2022.
Ownership costs
Ownership costs include Depreciation, amortisation and
impairment of tangible and intangible assets, including right of
use assets, and the Net gain on sale of property, plant and
equipment.
€ million 2023
Higher/
(lower)
vly
Higher/
(lower)
vly (%)
Depreciation, amortisation and
impairment 2,063 (7) (0.3) %
Net gain on sale of property,
plant and equipment (2) 20 (90.9) %
Ownership costs
1
2,061 13 0.6 %
1 For 2022, includes an exceptional credit of €8 million related to the
partial reversal of an impairment relating to fleet assets that were
previously stood down in 2020. Further information is given in the
Alternative performance measures section.
The increase in ownership costs versus 2022 is mainly driven by
the increase in the Group’s fleet of aircraft, linked to the restoration
of capacity and 34 deliveries of new aircraft in the year. The Net
gain on sale of property, plant and equipment was €2 million,
reflecting the disposal of aircraft withdrawn from service and
related spare parts. On a unit basis per ASK, Ownership costs were
down 18.2% versus 2022, mainly reflecting the restoration of
capacity and improvements in aircraft utilisation.
Financial review continued
29

Aircraft fleet
In 2023, the in-service fleet increased by 24 aircraft: 37 aircraft
entered service and 13 aircraft were retired. Of the aircraft
entering service, five re-entered service having previously been
stood down and two were delivered in late 2022. In total, 34
aircraft were delivered in the year, of which four aircraft entered
service early in 2024.
Number of fleet
Number of fleet in-service 2023 2022
Higher/
(lower)
vly
Short-haul 389 381 2.1 %
Long-haul 193 177 9.0 %
582 558 4.3 %
In addition to the in-service fleet, there were a further nine
aircraft not in service, made up of five aircraft held by the Group
pending disposal or lease return and four aircraft delivered late
in 2023 and not in service by 31 December 2023.
Exchange rate impact
Exchange rate impacts are calculated by retranslating current
year results at prior year exchange rates. The reported revenues
and expenditures are impacted by the translation of currencies
other than euro to the Group’s reporting currency of euro,
primarily pound sterling related to British Airways and IAG
Loyalty. From a transaction perspective, the Group’s
performance is impacted by the fluctuation of exchange rates,
primarily exposure to the pound sterling, euro and US dollar. The
Group typically generates a surplus in most currencies in which it
does business, except the US dollar, for which capital
expenditure, debt repayments and fuel purchases typically
create a deficit which is managed and partially hedged. The
Group hedges its economic exposure from transacting in foreign
currencies but does not hedge the translation impact of
reporting in euro.
Overall, in 2023 the Group operating profit before exceptional
items was reduced by €82 million due to adverse exchange rate
impacts.
Exchange rate impact before exceptional items
€ million
Favourable/(adverse)
2023
Translation
impact
Transaction
impact
Total
exchange
impact
Total exchange impact
on revenue (379) (111) (490)
Total exchange impact
on operating
expenditures 351 57 408
Total exchange impact
on operating profit (28) (54) (82)
€ million
Favourable/(adverse)
2022
Translation
impact
Transaction
impact
Total
exchange
impact
Total exchange impact
on revenue 97 685 782
Total exchange impact
on operating
expenditures (129) (975) (1,104)
Total exchange impact
on operating profit (32) (290) (322)
The exchange rates of the Group were as follows:
2023 2022
Higher/
(lower)
vly
Translation - Balance sheet
£ to € 1.16 1.14 1.8 %
Translation - Income statement
(weighted average)
£ to € 1.15 1.17 (1.7) %
Transaction (weighted average)
£ to € 1.15 1.17 (1.7) %
€ to $ 1.09 1.05 3.8 %
£ to $ 1.26 1.23 2.4 %
30

Total net non-operating costs
Total net non-operating costs for the year were €451 million,
versus €863 million in 2022. Finance costs of €1,113 million were
€96 million higher than in 2022, although they fell in the fourth
quarter by 16.3% or €48 million, linked to the early debt
repayments described in ‘Early repayment of debt raised in 2020
and 2021’ below and in note 3 to the Group financial statements.
Finance income was up €334 million, reflecting the Group’s
strong cash balances and the higher interest rates earned on
deposits. The other main movement was for net currency
retranslation, with a credit of €176 million in 2023 versus a
charge of €115 million in 2022, principally reflecting the
weakening of the US dollar.
The Net change in the fair value of financial instruments of €11
million reflects fair value adjustments at 31 December 2023 of
IAG’s €825 million convertible bond maturing in 2028.
Other non-operating credits of €8 million in 2023 (2022: credit
of €110 million) mainly represent net gains or losses on derivative
contracts for which hedge accounting is not applied, together
with a net gain of €10 million in 2023 on the sale of investments.
Tax
The tax charge on the Profit for the year was €401 million (2022:
tax credit of €16 million), and the effective tax rate was 13.1%
(2022: negative 3.9%).
The substantial majority of the Group’s activities are taxed where
the main operations are based: in the UK, Spain and Ireland,
which had statutory corporation tax rates of 23.5%, 25.0% and
12.5% respectively for 2023. The expected effective tax rate for
the Group is determined by applying the relevant corporation
tax rate to the profits or losses of each jurisdiction.
The geographical distribution of profits and losses in the Group
results in the expected tax rate being 23.5% for the year to 31
December 2023. The difference between the actual effective tax
rate of 13.1% and the expected tax rate of 23.5% is primarily due
to the recognition of previously unrecognised tax losses in the
Group’s Spanish companies.
The Profit after tax for the year was €2,655 million (2022:
€431 million).
On 3 March 2021, the UK Chancellor of the Exchequer
announced that legislation would be introduced in the Finance
Bill 2021 to set the main rate of corporation tax at 25% from April
2023. On 24 May 2021, the Finance Bill was substantively
enacted, which has led to the remeasurement of deferred tax
balances and will increase the Group’s future current tax charge
accordingly. As a result of the remeasurement of deferred tax
balances in UK entities, a charge of €13 million (2022: €17 million
credit) is recorded in the Income statement and a credit of €3
million (2022: €10 million charge) is recorded in Other
comprehensive income.
The Group is monitoring the OECD’s proposed two-pillar
solution to address the tax challenges arising from the
digitalisation of the economy. This reform to the international tax
system is designed to ensure that multinational enterprises with
consolidated worldwide annual turnover exceeding €750 million
will be subject to a minimum 15% effective tax rate, and also
proposes to address the geographical allocation of profits for
the purposes of taxation. On 15 December 2022, the Council of
the European Union formally adopted the EU Pillar Two
Directive. On 22 December 2022, the EU Minimum Tax Directive
was published.
On 11 July 2023, the UK enacted Finance (No. 2) Act 2023 which
introduced the Multinational Top-up Tax and the Domestic Top-
up Tax with effect for accounting periods beginning on or after
31 December 2023. These taxes are the UK’s adoption of the
income inclusion rule and domestic minimum top-up tax rule
referenced in the OECD’s Pillar Two reform.
On 18 December 2023, Ireland enacted Finance (No. 2) Act 2023
which, pursuant to the EU Minimum Tax Directive, provided for
the introduction of a new minimum effective rate of tax for
certain businesses. These rules provide for a Qualified Domestic
Top-Up Tax where an in-scope group’s Irish operations have an
effective rate of tax of less than 15%. They come into force for
accounting periods beginning on or after 31 December 2023.
On 19 December 2023, Spain’s Council of Ministers approved a
draft law to implement the EU Minimum Tax Directive. This is to
be subject to consultation, prior to being sent to Parliament.
For 2023, the predominant jurisdiction in which the Group
operates with an effective tax rate of less than 15% is Ireland
through Aer Lingus. While the impact on the Group of the
adoption of Pillar Two is not yet reasonably possible to estimate,
for indicative purposes, in 2023 Aer Lingus recorded a current
tax expense of €24 million relating to its Irish operations,
representing an effective tax rate of 12.8%. Had the effective tax
rate applied by Aer Lingus to its Irish operations been 15%, the
current period tax expense would have increased by €4 million
to €28 million, which would have increased the overall Group
effective tax rate from 13.1% to 13.3%.
On 18 January 2024, the Tribunal Constitucional (Constitutional
Court) in Spain issued a ruling that the amendments to
corporate income tax arising from the introduction of Royal
Decree-Law 3/2016 were unconstitutional and accordingly
revoked. The Group has not adjusted the financial statements for
this revocation, but expects to recognise a tax receivable,
excluding interest arising, from the Spanish tax authorities of
approximately €191 million and an associated deferred tax
charge of approximately €58 million.
Financial review continued
31

Operating profit performance of airline operating companies
Aer Lingus
€ million
British Airways
£ million
Iberia
€ million
Vueling
€ million
Statutory 2023
Higher/
(lower)
vly 2023
Higher/
(lower)
vly 2023
Higher/
(lower)
vly 2023
Higher/
(lower)
vly
Passenger revenue 2,209 530 12,668 3,453 5,262 1,220 3,181 597
Cargo revenue 55 (25) 757 (303) 275 (72) – –
Other revenue 10 – 898 143 1,421 299 17 3
Total revenue 2,274 505 14,323 3,293 6,958 1,447 3,198 600
Fuel, oil costs and emissions charges 639 100 3,825 896 1,496 183 907 168
Employee costs 471 78 2,577 477 1,284 123 399 29
Supplier costs 789 143 5,475 880 2,827 543 1,240 152
Ownership costs
1
150 16 1,015 (66) 411 47 256 50
Operating profit 225 168 1,431 1,106 940 551 396 201
Operating margin 9.9% 6.7 pts 10.0% 7.0 pts 13.5% 6.4 pts 12.4% 4.9 pts
Alternative performance measures
2
Passenger revenue 2,209 530 12,668 3,453 5,262 1,220 3,181 597
Cargo revenue 55 (25) 757 (303) 275 (72) – –
Other revenue 10 – 898 143 1,421 299 17 3
Total revenue before exceptional items 2,274 505 14,323 3,293 6,958 1,447 3,198 600
Fuel, oil costs and emissions charges 639 100 3,825 896 1,496 183 907 168
Employee costs 471 78 2,577 477 1,284 123 399 29
Supplier costs 789 143 5,475 861 2,827 543 1,240 152
Ownership costs
1
150 16 1,015 (66) 411 47 256 42
Operating profit before exceptional items 225 168 1,431 1,125 940 551 396 209
Operating margin before exceptional items 9.9% 6.7 pts 10.0% 7.2 pts 13.5% 6.4 pts 12.4% 5.2 pts
1 Ownership costs reflects Depreciation, amortisation and impairment, and the Net (gain)/loss on the sale of property, plant and equipment.
2 Further detail is provided in the Alternative performance measures section.
The Iberia numbers in the table above are presented on the same basis as in note 5 to the consolidated financial statements and exclude LEVEL Spain.
32

Review by operating company
All of the airline operating companies saw a significant increase
in profitability in 2023, with Iberia and Vueling achieving record
levels of operating profit, reflecting strong passenger yields,
which were able to offset the impacts of higher effective fuel
prices and inflation.
British Airways operated the lowest passenger capacity relative
to 2019, with ASKs at 90.1% of 2019, partly linked to the delayed
restoration of its capacity to the Asia Pacific region, which saw
COVID-19 restrictions continue longer than the rest of IAG’s
markets. Aer Lingus operated at 104.4% of 2019 capacity,
including the impact of its new UK base at Manchester Airport
opened in October 2021. Iberia and Vueling both increased
capacity versus 2019, operating at 103.2% and 108.5% of 2019
levels respectively.
Operating profit before exceptional items
2023 2022
1
2019
1, 2
Aer Lingus (€ million) 225 57 276
British Airways (£ million) 1,431 306 1,893
Iberia (€ million) 940 389 498
Vueling (€ million) 396 187 241
IAG Loyalty (£ million) 280 240 176
1 The 2019 and 2022 results include a reclassification to conform with the
current year presentation for the Net gain on sale of property, plant and
equipment within Operating profit.
2 The 2019 results have been restated for the treatment of administration
costs associated with the Group’s defined benefit pension schemes.
IAG Loyalty showed significant growth in its non-airline partner
revenue streams, together with benefiting from the recovery in
the Group’s airlines, leading to a second successive year of
record operating profits, with operating profit before
exceptional items of £280 million (€321 million), up from £240
million (€282 million) in 2022. IAG Loyalty’s operating margin for
2023 was 21.7%, with the reduction of 6.7 points from 28.4% in
2022 due to the increased level of Avios redemption activity as
well as the mix of Avios issued between the Group’s airlines and
other partners.
Capital expenditure
In 2023, the Group continued to invest in its aircraft fleets,
customer products and services, IT infrastructure and
sustainability, as the business continued to recover and restore
capacity. Capital expenditure, measured as the Acquisition of
property, plant and equipment and intangible assets from the
Cash flow statement, was €3,544 million, compared with €3,875
million in 2022, with the reduction of €331 million due to the
profile of fleet deliveries and pre-delivery payments, with
investment in IT higher than in 2022, as the Group continues to
invest in its IT estate and transformation projects. In 2023, the
Group took delivery of 34 aircraft: ten for British Airways, 14 for
Iberia, six for Vueling, two for Aer Lingus and two for LEVEL. Of
these deliveries, 28 were aircraft acquired from Airbus and
Boeing and six were leased directly from aircraft lessors (2022:
25 aircraft acquired from Airbus and Boeing and two leased
directly from aircraft lessors). One of the aircraft acquired from
Airbus in 2023 was novated to a lessor immediately prior to the
point of delivery as part of a sale and leaseback arrangement,
which resulted in the final delivery payment for the aircraft being
made by the lessor, rather than by the Group as capital
expenditure; the Group also received a refund of the pre-delivery
payments it had made in advance of the delivery date in respect
of that aircraft.
Aircraft deliveries 2023 2022
Airbus A320ceo 2 –
Airbus A320neo family 19 12
Airbus A330 2 –
Airbus A350 9 12
Boeing 787-10 2 3
Total 34 27
Financial review continued
33

Aircraft orders
During 2023, the Group converted ten A320neo options to firm
deliveries in 2028, as replacement aircraft for its short-haul
network. A new order was placed for British Airways for six
Boeing 787-10 aircraft, and one new Airbus A350-900 aircraft
was ordered for Iberia; the aircraft represented by these new
orders will be delivered in 2025 and 2026. In addition to these
orders from Airbus and Boeing, the Group entered into leases
directly with lessors for two Airbus A350-900 aircraft for Iberia,
two Airbus A330-200 aircraft for LEVEL and two A320ceo
aircraft for Vueling, all of which were delivered during the year.
The table below includes three further A320ceo aircraft for
Vueling, for which leases were signed prior to 31 December
2023, with the aircraft to be delivered in 2024.
The Group anticipates introducing eight further A320ceo aircraft
for Vueling in 2024 through operating leases, to cover aircraft
availability linked to additional maintenance requirements for
aircraft with Pratt & Whitney ‘GTF’ engines.
Aircraft future deliveries at 31 December 2023 2022
Airbus A320ceo 3 –
Airbus A320neo family 82 91
Airbus A321XLR 14 14
Airbus A350 3 12
Boeing 737 50 50
Boeing 777-9 18 18
Boeing 787-10 11 7
Total 181 192
In addition to those committed future deliveries shown above, at
31 December 2023, the Group held options to acquire a further
235 aircraft from Airbus and Boeing.
Capital commitments
Capital expenditure authorised and contracted for at 31
December 2023 amounted to €12,706 million (2022: €13,749
million), with the decrease attributable to the net of the aircraft
deliveries and the new orders described above. Most of these
commitments are denominated in US dollars.
The Group has certain rights to cancel commitments in the event
of significant delays to aircraft deliveries caused by the aircraft
manufacturers. No such rights had been exercised as at 31
December 2023.
Working capital
The net movement in working capital saw a cash outflow of €142
million in 2023, compared with a significant cash inflow of €1,884
million in 2022. The year 2022 had seen a significant restoration
of airline capacity by the end of the year, with significant related
increases in bookings for future travel (Deferred revenue), net of
trade receivables, together with an increase in Trade and other
payables, linked to the increase in the Group’s flying
programmes and the related increase in operating expenditure.
By contrast, in 2023, working capital had returned closer to a
steady-state position. Inventories increased by €141 million to
€494 million, partially linked to engine purchases to meet
maintenance requirements. Trade receivables were up by €229
million to €1,559 million, related to higher passenger numbers
and yields, together with some timing differences related to
certain receipts due from the Spanish government.
At 31 December 2023, total Deferred revenue, which includes the
Group’s loyalty schemes, was €8,023 million, an increase of €379
million versus €7,644 million at 31 December 2022. Deferred
revenue at 31 December 2023 includes €645 million in respect of
unredeemed vouchers, including associated taxes (2022: €911
million). The unredeemed voucher balance includes: flight
vouchers issued to customers at their election to provide the
flexibility to change their destination and/or date of travel (a
policy introduced in 2020 and still in operation) and loyalty-
related companion vouchers (referred to as ‘non-disrupted
vouchers’); vouchers issued due to COVID-19 flight cancellations
(referred to as ‘disrupted vouchers’); certain other flexible fare
options; and other gift vouchers. The outstanding balance of
disrupted vouchers at 31 December 2023 was €139 million, with
the remaining €506 million relating to ongoing commercial
policies, which the Group expects to continue to be offered in
the future.
34

Funding and debt
IAG’s long-term objectives when managing capital are: to
safeguard the Group’s ability to continue as a going concern and
its long-term viability; to maintain an optimal capital structure in
order to reduce the cost of capital; and to provide sustainable
returns to shareholders. In November 2018, S&P and Moody’s
assigned IAG long-term investment-grade credit ratings with a
stable outlook; IAG’s credit ratings remained investment-grade
up until the outbreak of COVID-19. In 2023, due to the
improvement in the Group’s profitability, cash generation and
balance sheet, both S&P and Moody’s raised their credit ratings
of IAG in the fourth quarter of the year. The Group’s current
ratings (at 28February 2024) are: S&P: BBB- (investment
grade), Moody’s: Ba1. British Airways has separate credit ratings,
which were also increased to BBB- (investment grade) by Fitch
and S&P; Moody’s rating of British Airways is Ba1.
Early repayment of debt raised in 2020 and 2021
During 2020 and 2021, the Group’s airlines required additional
liquidity, due to the significant adverse impact of COVID-19, and
all entered into special COVID-19-related financing
arrangements, partially or fully guaranteed by the governments
in their home countries. This debt was based on floating rate
arrangements and agreed at margins that reflected the condition
of the financial markets and the Group’s airlines at the time; this
debt was among the most expensive of the Group’s debt to
service. As a result of the Group’s profitability and cash
generation in 2022 and 2023, and expected continued strong
cash generation over the foreseeable future, in the second half
of 2023, the Board agreed that the remainder of this debt should
be repaid ahead of its scheduled maturity, which was between
2024 and 2026. The total amount repaid early was €3,271 million:
£2,000 million (€2,312 million) for British Airways, partially
guaranteed by the UK Export Fund (UKEF); €644 million and
€223 million for Iberia and Vueling respectively, partially
guaranteed by Spain’s Instituto de Crédito Oficial (ICO); €42
million of other non-aircraft debt for Iberia; and €50 million to
the Ireland Strategic Investment Fund (ISIF) for Aer Lingus.
These early debt repayments will result in a reduction in interest
costs in future years.
Following these early repayments, and the repayment of IAG’s
€500 million bond in July 2023, the maturity profile of the
Group’s debt as of 31 December 2023, aside from aircraft
financing payments, includes two €500 million IAG bonds due in
2025 and 2027, respectively, IAG’s €825 million 2028 convertible
bond and a €700 million IAG bond due in 2029.
Debt and capital
The Group monitors leverage using net debt to EBITDA before
exceptional items, in addition to closely following measures used
by the credit ratings agencies, including those based on total
borrowings (gross debt).
In 2019, the Group set a target of net debt to EBITDA before
exceptional items below 1.8 times, which broadly corresponded
to investment grade with the credit ratings agencies. At its
Capital Markets Day in November 2023, the Group confirmed
this target remains appropriate.
As at 31 December 2023, net debt to EBITDA before exceptional
items had reduced to 1.7 times, compared with 3.1 times in 2022,
reflecting the strong recovery in profitability and the related
cash generation, with capital expenditure €331 million lower than
the previous year.
Net debt
€ million 2023 2022
Higher /
(lower)
Debt 19,984 19,610 374
Cash and cash equivalents and
interest-bearing deposits (9,599) (7,943) (1,656)
Net debt at 1 January 10,385 11,667 (1,282)
Decrease/(increase) in cash net of
exchange 2,762 (1,656) 4,418
Movements in total borrowings
Net cash outflow repayments of
borrowings and lease liabilities (5,999) (2,505) (3,494)
Net cash inflow new borrowings 1,001 1,436 (435)
Non-cash impact of new leases 1,315 1,017 298
Decrease in net debt from regular
financing (3,683) (52) (3,631)
Exchange and other non-cash
movements (219) 426 (645)
Net debt at 31 December 9,245 10,385 (1,140)
Net debt reduced by €1,140 million, principally due to the
recovery in profitability and operating cash flow generation,
partially offset by the capital expenditure of €3,544 million.
Gross debt reduced by €3,902 million during the year to €16,082
million. Repayments exceeded new borrowings by €4,998
million, mainly due to the early repayments of non-aircraft debt
outlined above, the repayment on maturity of a €500 million IAG
bond, and scheduled repayments of aircraft financing exceeding
new aircraft financing raised during the year. The Group also
raised financing by way of sale and leaseback transactions and
extended existing leases, which together added €1,315 million to
gross debt. The Group’s gross debt is subject to foreign
exchange translation movements, as the majority of the Group’s
aircraft debt is denominated in US dollars. Over the course of
2023, the euro and pound sterling strengthened against the US
dollar leading to a decrease in gross debt of €361 million. The
remainder of the variance in gross debt versus 2022 is mainly
due to the increase in the fair value of IAG’s €825 million
convertible bond due in 2028.
Financial review continued
35

Cash
Cash, cash equivalents and interest-bearing deposits
€ million 2023 2022
Higher/
(lower)
Aer Lingus
1
356 375 (19)
British Airways 1,361 2,877 (1,516)
Iberia 1,890 2,389 (499)
Vueling 452 766 (314)
IAG Loyalty 1,374 993 381
IAG and other Group companies 1,404 2,199 (795)
Cash and cash equivalents and
interest-bearing deposits 6,837 9,599 (2,762)
1 At 31 December 2023 Aer Lingus held €31 million of restricted cash
(2022: €33 million) within interest-bearing deposits maturing after
more than three months to be used for employee-related obligations.
British Airways, Iberia, Vueling, Aer Lingus and IAG Loyalty all
experienced significant positive operating cash flow in the year.
The reduction in the balance of cash, cash equivalents and
interest-bearing deposits in IAG and other Group companies
principally reflects the early repayment of floating rate
unsecured debt in all the airlines, and the repayment of the IAG
€500 million 2023 bond on maturity.
Debt
Long-term aircraft financing was drawn for 31 aircraft during 2023,
including five aircraft that were delivered in 2022 to British
Airways and for which funding was committed at 31 December
2022. The Group also secured committed funding of €375 million,
to be drawn in 2024, for three British Airways aircraft, including
two delivered in 2023; this committed funding is included in
committed and undrawn aircraft financing facilities at 31 December
2023. Linked to its strong cash generation, Iberia did not seek
financing for three new A321neo aircraft delivered in 2023, with
these aircraft held unencumbered at 31 December 2023.
Equity
No equity was raised or repaid during the year, nor in 2022.
Liquidity facilities
During the year, the Group exercised a one-year extension to the
availability of its Revolving Credit Facility (RCF), which now has
committed availability until March 2026. The available amount
will remain at $1,755 million (€1,605 million) until March 2025 and
reduce to $1,655 million (€1,513 million) for the final 12 months to
March 2026. The facility was originally agreed and executed with
a syndicate of banks in 2021, with availability for three years, plus
two consecutive one-year extension periods, at the discretion of
the lenders. The facility is available to Aer Lingus, British Airways
and Iberia, each of which has a separate borrower limit within
the overall facility. Any drawings under the facility would be
secured against eligible unencumbered aircraft assets and/or
take-off and landing rights at London Heathrow or London
Gatwick airports. This facility was undrawn at 31 December 2023.
The Group also added a new £1,000 million (€1,159 million)
committed credit facility for British Airways, partially guaranteed
by the UKEF, which was agreed upon the repayment of British
Airways’ £2,000 million (€2,312 million) loan in September 2023
and which matures in September 2028. This is in addition to the
existing £1,000 million (€1,159 million) committed credit facility
for British Airways, partially guaranteed by the UKEF, which was
agreed and executed in 2021 and matures in November 2026.
Both facilities were undrawn at 31 December 2023.
Aer Lingus has a €350 million credit facility with Ireland’s ISIF,
which is available until March 2025. This facility was undrawn at
31 December 2023. At 31 December 2022 €50 million was drawn;
this €50 million was repaid in the first half of 2023.
The Group also has certain other committed and undrawn
general and overdraft facilities, bringing total committed and
undrawn general and overdraft facilities at 31 December 2023 to
€4,412 million (2022: €3,284 million).
The Group also holds €375 million of committed and undrawn
aircraft financing facilities (2022: €1,116 million). The committed
amount at 31 December 2023 represents financing for three
British Airways aircraft to be drawn in 2024. The committed and
undrawn aircraft financing facilities at 31 December 2022
included committed financing for five aircraft for British Airways
that was drawn in 2023 and certain backstop financing
arrangements, which have now expired. The Group’s aircraft
deliveries continue to be successfully financed on regular long-
term financing arrangements as required, and hence no drawing
on these backstop arrangements was necessary.
In total, the Group had €4,787 million of committed and
undrawn general and aircraft facilities as at 31 December 2023
(2022: €4,400 million).
The facilities values above do not include the balance of certain
shorter-term working capital facilities available to the Group’s
operating companies.
Dividends
No dividends were proposed or paid in 2023 (2022: nil).
Liquidity and cash flow
Total liquidity, measured as cash, cash equivalents and interest-
bearing deposits of €6,837 million and committed and undrawn
general and aircraft facilities of €4,787 million, was €11,624 million
at 31 December 2023. This represented a decrease of €2,375
million versus total liquidity of €13,999 million at the end of 2022,
linked mainly to the Group’s decision to repay certain of its debt
raised in 2020 and 2021 in advance of its scheduled maturity.
36

Cash flow
The Group saw strong cash flow generation in 2023, mainly
linked to its strong profit performance; the strong cash
generation in turn allowed the Group to rebalance the mix of
gross debt and cash by undertaking the early debt repayments
outlined above.
Free cash flow
In 2023, the Group adopted Free cash flow as an Alternative
performance measure, replacing Levered free cash flow. Free
cash flow is defined as Net cash flows from operating activities
less Acquisition of property, plant and equipment and intangible
assets. See Alternative performance measures section for further
details.
€ million 2023 2022 Variance
Net cash flows from operating
activities 4,864 4,854 10
Acquisition of property, plant and
equipment and intangible assets (3,544) (3,875) 331
Free cash flow 1,320 979 341
In 2023, Free cash flow was €1,320 million, up €341 million versus
2022, driven by similar Net cash flows from operating activities,
but lower capital expenditure, as outlined above. In 2022, whilst
the Operating profit was significantly lower, Net cash flows from
operating activities benefited from the restoration of capacity
and the associated positive impact on working capital, mainly
from the rebuilding of advanced ticket sales.
Condensed cash flow summary
€ million 2023 2022
1
Variance
Net cash flows from operating
activities
4,864 4,854 10
Net cash flows from investing
activities
(3,423) (3,463) 40
Net cash flows from financing
activities
(5,194) (56) (5,138)
Net (decrease)/increase in cash
and cash equivalents
(3,753) 1,335 (5,088)
Net foreign exchange differences
(2) (31) 29
Cash and cash equivalents at 1
January
9,196 7,892 1,304
Cash and cash equivalents at year
end
5,441 9,196 (3,755)
Interest-bearing deposits maturing
after more than three months
1,396 403 993
Cash, cash equivalents and other
interest-bearing deposits
6,837 9,599 (2,762)
1 The 2022 results include reclassifications to conform with the current
year presentation. Further information is given in note 2 and note 37.
Many of the significant cash flow items are already explained
above, including in the sections covering operating costs, non-
operating costs, capital expenditure, working capital and other
initiatives and funding. Further detail of the other main
movements is provided below.
Cash flows from operating activities
€ million 2023 2022
1
Variance
Operating profit 3,507 1,278 2,229
Depreciation, amortisation and
impairment 2,063 2,070 (7)
Net gain on disposal of property,
plant and equipment (2) (22) 20
Pension contributions net of service
costs (30) (5) (25)
Increase in provisions 237 463 (226)
Unrealised currency differences 51 19 32
Other movements 111 76 35
Interest paid (1,005) (817) (188)
Interest received 365 42 323
Tax paid (291) (134) (157)
Movement in working capital (142) 1,884 (2,026)
Net cash flows from operating
activities 4,864 4,854 10
1 The 2022 results include reclassifications to conform with the current
year presentation. Further information is given in note 2 and note 37.
In December 2022, British Airways agreed the valuation of its
main defined benefit pension scheme, the New Airways Pension
Scheme (NAPS), with the scheme’s Trustee, which resulted in a
deficit as at the valuation date of 31 March 2021 of £1,650 million
(€1,887 million). As at 31 December 2023, the scheme was over
100% funded on the 2021 valuation basis and an overfunding
protection mechanism agreed with the NAPS Trustee had the
effect that no contributions were due in 2022 or 2023. Deficit
contributions could resume should the funding level fall in the
future. The pension cash flows shown above represent payments
to various smaller schemes within the Group. The valuation of
the main British Airways pension schemes also showed a surplus
on the IAS 19 accounting basis, which does not impact
contributions due to the schemes. Total Employee benefit assets
at 31 December 2023, of which the principal element is the NAPS
accounting surplus, were €1,380 million; the reduction of €954
million versus 31 December 2022 was predominately due to the
impact of the fall in AA corporate bond yields applied in
discounting scheme liabilities, leading to higher liabilities at the
same time as the market value of assets fell, mainly due to the
increase in UK government bond yields.
Financial review continued
37

Provision and other non-cash movements mainly relate to
restoration and handback provisions for leased aircraft and ETS
allowances. Provisions for ETS allowances are charged to Fuel,
oil costs and emissions charges as they are built up through the
year, with the cash payment for ETS credits acquired by the
Group’s airlines to meet the requirements of the various
emissions trading schemes accounted for as capital expenditure.
Provision and other non-cash movements also include
restructuring payments of €82 million, mainly relating to
redundancy programmes in Iberia agreed prior to 2020.
The increase in interest paid in 2023 reflects higher interest
rates, partially mitigated in the fourth quarter by the early
repayment of €3,271 million of floating rate debt outlined above.
After including the impact of hedging, 13% of the Group’s total
debt at 31 December 2023 was on floating rate arrangements.
Cash flows from investing activities
€ million 2023 2022 Variance
Acquisition of property, plant and
equipment and intangible assets
(3,544) (3,875) 331
Sale of PPE, intangible assets and
investments
1,091 837 254
Increase in other current interest-
bearing deposits
(985) (351) (634)
Payment to Globalia for convertible
loan
– (100) 100
Other investing movements
15 26 (11)
Net cash flows from investing
activities
(3,423) (3,463) 40
The €1,091 million of cash inflow from the Sale of property, plant
and equipment, intangible assets and investments is mainly due
to the aircraft sale and leaseback transactions discussed in the
Funding and debt section above, together with the disposal of
assets, principally aircraft being retired from service. The
increase from 2022 reflects the number and type of aircraft
financed through sale and leaseback transactions in 2023
compared with 2022.
In March 2022, IAG entered into a convertible loan with Globalia
for €100 million, convertible into an equity stake in Air Europa
Holdings of 20%; the conversion option was exercised in August
2022, with the equity stake treated as an equity investment.
Cash flows from financing activities
€ million 2023 2022 Variance
Proceeds from borrowings
1,001 1,436 (435)
Repayment of borrowings
(4,268) (1,050) (3,218)
Repayment of lease liabilities
(1,731) (1,455) (276)
Settlement of derivative financial
instruments
(119) 1,036 (1,155)
Acquisition of treasury shares and
other financing movements
(77) (23) (54)
Net cash flows from financing
activities
(5,194) (56) (5,138)
Proceeds from borrowings reflect the cash inflows from aircraft
financing as described in the Funding and debt section above.
Aside from the additional liquidity facilities described in
‘Liquidity facilities’ above, there was no new non-aircraft
financing raised in 2023 (2022: nil).
Settlement of derivative financial instruments relates to
settlements of foreign exchange instruments taken out to hedge
long-term debt payments, including US dollar lease payments.
The outflow in 2023 relates to the weakening of the US dollar
versus the euro and pound sterling. In 2022, the significant
inflow related to the strengthening of the US dollar versus the
euro and pound sterling.
The Acquisition of treasury shares and other financing
movements includes the purchase of 27 million shares in 2023
related to the Group’s intended acquisition of the remaining
shares in Air Europa Holdings, as part of the consideration is
required to be delivered as IAG shares, together with 15 million
shares related to employee incentive schemes. In 2022, 15 million
shares were purchased related to employee incentive schemes.
38

Engagement context
The strong recovery in demand for
travel during 2023 was accompanied by
the usual close scrutiny by regulators
and policy-makers with additional
challenges created by the geopolitical
background. Political dynamics in Spain
and forthcoming elections in the UK and
for the European Parliament mean that
policymakers have tended to focus on
shorter-term priorities which is a
challenge for an industry with long
investment cycles.
With this overall context, IAG continued
to engage with policymakers in the
institutions of the European Union and in
the countries in which its operating
airlines are based or serve, to promote
the economic and social benefits of
aviation and explain the impacts of
policy proposals on our business. We
continue to encourage aviation
regulators to adopt measured policies
that recognise the competitive nature
ofinternational aviation (including
proposals to amend airport slot
allocation rules in the EU or the UK)
andto promote a greater balance of
therisk and reward in the regulation
ofmonopoly airports and Air Navigation
Service Providers (ANSPs), given
thesignificant cost to airlines of
theirservices.
In addition to direct engagement
withpolicymakers, IAG worked through
tradeassociations, notably Airlines
4Europe (A4E) and the International
AirTransport Association (IATA), as
wellasnational industry and business
associations, to put its case to
governments and institutions such
asthe International Civil Aviation
Organisation (ICAO) on issues of
importance to the Group and its
customers, especially in sustainability.
Geopolitical instability
The far-reaching impacts of the Russian
invasion of Ukraine in 2022 on the world
also had immediate practical effects on
airlines by preventing European and UK
airlines from operating through Russian
airspace, a situation which, along with
the war, endured throughout 2023. IAG’s
operating companies adapted by
routing aircraft to and from Asia away
from Russian airspace with the resultant
increase in flying time driving more
complex planning and a need for
additional crew.
At various times in 2023, military coups
and other conflicts in West Africa and
the Sahel region resulted in further
temporary restrictions to airspace.
Although the risks to smooth operations
from such events can usually be
managed and are isolated in their
geographical impact, they also
exacerbate industry-wide challenges.
A further impact of the war in Ukraine
was seen in 2023 with the extension of
sanctions on Russia by the EU and the
UK to prohibit, from the end of
September, the import of Russian iron
and steel products processed in a third
country. The additional requirements to
scrutinise the origins of steel and the
location of manufacture have slowed
procurement of aircraft parts adding
topressure on the global supply chain.
Engagement for the
benefit of our industry
The conflict in Israel from 7 October
andthe subsequent escalation of
military action in Israel and Gaza meant
that IAG’s airlines ceased operations to
Israel. There are immediate commercial
impacts of being unable to operate to
the country and further signs of impact
on markets in the immediate conflict
area. We continue to monitor the wider
economic impacts on the world
economy of this and other conflicts.
The global supply chain has not yet
returned to normal from the disruption
caused by the COVID-19 pandemic,
having the practical effect of putting
pressure on maintenance and
engineering resources affecting fleet
availability. Both Airbus and Boeing have
seen delivery schedules for new aircraft
slip behind their original plan and the
distribution of replacement parts
continues to take longer than it did in
2019, increasing maintenance times for
many airlines. The problems that
emerged during the year for airlines
operating Airbus aircraft with the Pratt
&Whitney PW1100G ‘GTF’ engines
meant significant additional numbers
ofaircraft in the global airline fleet
required additional maintenance at the
end of 2023. While the impacts for IAG’s
own aircraft are limited and manageable,
the pressure on maintenance facilities
increased during 2023 since other
airlines took up capacity to solve this
issue and will continue to do so in the
coming years. IAG engaged with
regulators to explain the potential
difficulties for customers that this
pressure could cause.
Sustainability
Much of IAG’s advocacy and
engagement in 2023 was concerned
with the issue of sustainability. IAG
continues to play a leading role in
developing industry plans for reaching
net zero carbon emissions and the
Group’s strategic approach and practical
actions to reaching our targets
areexplained in detail in the
Sustainabilitysection.
“IAG continues to play a
leading role in developing
industry plans for
reaching net zero carbon
emissions.”
Regulatory environment
39

In our ongoing activities to explain our
position, the Group and its operating
airlines continued to engage with
representatives of the institutions of
theEU and the governments of Spain,
Ireland and the UK. We have long
advocated the development of
Sustainable Aviation Fuels (SAF) which
reduces lifecycle CO
2
emissions by 80%
as the solution, not just to the near-term
need to drive down industry emissions,
complementing the deployment of
moreefficient aircraft, but also to enable
sustainable long-haul aviation alongside
the development of carbon capture
technology and future generation e-fuels.
In Europe, high-level engagement
continued on the most relevant of
theEU’s Fit for 55 policies including
theaviation SAF blending mandate
(ReFuelEU aviation) and the revision
ofthe Emissions Trading System (ETS)
Directive for Aviation. IAG welcomed
theEU’s commitment of 20 million
freeSAF allowances to encourage SAF
uptake between 2024 and 2030 and the
increase to the ETS innovation fund
budget to help deploy net zero
andinnovative technologies. In 2023,
aviation was also included in the
EUTaxonomy as one of the sectors
thathas the potential to contribute
significantly to climate change mitigation.
While the Group continues to support
the principles and approach of the EU’s
Green Deal we maintained our
opposition, aligned with other airlines,
tothe proposed removal of the jet
fueltax exemption since it will reduce
the sector’s ability to invest in more
effective measures and to enable
acompetitive European aviation sector.
IAG’s technical experts and senior
executives engaged with relevant
officials at the European Commission,
the Representations of Member
StatesinBrussels as well as Members
oftheEuropean Parliament, and with
complementary contacts with the
relevant authorities in the respective
EUhubs, in Madrid, Dublin and Barcelona.
In the UK, IAG engaged with cabinet
ministers and officials at all levels
toencourage support for a UK SAF
industry that can provide thousands
ofnew jobs and see plants built in the
regions of the UK. IAG advocates the
use of free allowances from future
revenues that airlines will pay into the
UK ETS (mirroring the EU approach),
tosupport the purchase of advanced
SAF and encourage SAF production
asseen in the US and Europe. We look
forward to providing input to the
UK’sconsultation on a price support
mechanism for SAF production
whichisan essential requirement
tosecuringinvestment.
Aviation policy issues
Potential changes considered by the
EUand the UK to the global system
used to allocate takeoff and landing
slots at congested airports were
animportant focus of government
engagement throughout 2023.
IAG supports the use of the Worldwide
Airport Slots Guidelines (WASG) system,
formulated by IATA, since it provides
astable, internationally accepted system
(reflected in the relevant EU Slot
Regulation and UK laws) that
encourages competition but also
supports reliable, established networks.
In 2023, the EU considered but halted
changes to this system and the UK
announced that it would consult on
potential new approaches during 2024.
We note that no system of allocation
can solve the problem of a lack of
capacity, and these should not be
conflated. We therefore continue to
impress on policymakers the benefits
ofa global system that supports new
market entrants and allows network
airlines to plan their complex schedules
in advance so that they can offer
customers a wide range of destinations
and connections while also managing
operational disruption effectively.
40

Some alleviations from the elements of
slot rules that require airlines to operate
any one slot 80% of the time to retain
itin the following year have remained
inplace around the world during 2023.
IAG welcomed such alleviations as they
recognise the continuing uncertainty
that global supply chain issues and
short-term uncertainty in demand in
individual markets have caused. As we
have seen in the Middle East, in the last
quarter of 2023 there are continued
pressures on airlines which are often
prevented from operating individual
flights. We continue to advocate a
pragmatic approach by airport slot
coordinators to recognise the reality of
factors outside airlines’ control and that
justify retaining slots forthe longer-term
benefit of airlines and their customers.
Since around one third of flights
inEurope operate through French
airspace, the very frequent strikes
byairtraffic controllers in France put
further pressure on operations. IAG
continues tomake representations with
other airlines and A4E, to encourage
EUand French government action to
allow freemovement of traffic flying
over France during industrial action,
apolicy alreadyadopted by several
other EUMemberStates.
Aviation regulators’ concern for the
consumer interest is understandable
following the disruption of 2022 and
inthe light of external factors, and there
were related developments in different
jurisdictions for IAG’s operating airlines.
In the EU, national authorities responded
to the industry recovery and high
consumer demand in different ways,
ranging from proposals to cap airfares
inone EU Member State, to proposals
toestablish minimum fares in another.
IAG engaged with policymakers
toexplain the benefits to consumers
ofthechoice available to them in the
competitive aviation market in the EU.
In the UK, IAG engaged with the Civil
Aviation Authority (CAA) on plans to
introduce an accessibility framework
forairlines, to mirror its existing system
that grades airports on the quality of
their provision of wheelchairs. IAG’s
operating airlines encourage support
forpassengers with additional needs
and believe that cross-industry
engagement and communication to
improve customer service will have
better results for passengers affected
than regulation. The UK also consulted
on potential rules to restrict ‘drip pricing’
during online sales to ensure customers
have all the relevant information at the
appropriate point of purchase. Canada
also introduced new requirements for
airlines to set out their accessibility
policies and consulted on proposals
toincrease passenger protection.
Similarly, the US published notices
ofproposed rulemaking in several
areasincluding to improve the provision
ofrefunds to customers. At the end
of2023, the European Commission
presented a proposal on multimodal
passenger rights with a focus on
passenger rights for access to tickets
covering different transport modes.
IAG responded to relevant consultations
and engaged directly and through our
trade associations to inform regulators,
propose balanced regulation and avoid
introducing additional rules that hamper
the competitiveness of the industry.
TheSpanish Presidency of the EU
in2023 gave an additional opportunity
toengage in Madrid and Brussels.
Economic regulation of monopoly
infrastructure
Aviation infrastructure and price
regulation was another area of focus
in2023. In Ireland, the DAA appealed
against the Irish Aviation Authority’s
December 2022 decision on the
maximum level of airport charges at
Dublin Airport for the period 2023-2026.
This decision, which takes account of the
impact that the COVID-19 pandemic had
onthe aviation industry, also provides
for acapital investment allowance of
approximately €3 billion. IAG was
broadly supportive of the IAA’s final
determination of charges and has joined
the appeal proceedings as a notice party.
In Spain, IATA and Spanish airline
association ALA opposed AENA’s
proposal to increase charges for 2024
that would break the cap in the airport
regulation document (DORA II) that
setsAENA’s airport charges scheme
for2022-2026. IAG broadly supports
theassociations’ objections.
In October, the UK Competition and
Markets Authority confirmed through
itsconsideration of airline and airport
appeals that it was essentially satisfied
with the CAA’s economic review of
London Heathrow airport’s charges.
Itispositive that charges in 2024 will be
lower in nominal terms than in 2023 and
then essentially flat for the remainder of
the regulatory period to 2026. However,
the very significant increase permitted
in2022 and 2023 (despite not allowing
most of the London Heathrow airport
“IAG maintained close
engagement with
regulators in key markets
around the world to
ensure positive relations
and to ensure the
benefits of its operations
are understood.”
Regulatory environment continued
41

torecoup revenues not earned due to
thepandemic) means that London
Heathrow airport’s charges remain
among the highest in the world and
arenot competitive. IAG seeks to work
with the CAA and the Department
forTransport to improve the regulatory
framework for the future.
The importance of aviation infrastructure
to airlines and their customers was
highlighted by the failure of the UK’s
National Air Traffic Services (NATS)
on28 August due to a software failure.
Although services recovered on the
same day, an almost complete outage
ofservice for several hours resulted
inconsiderable cost to IAG’s operating
airlines, not only in managing the outage
but also providing customers with the
necessary duty of care, accommodation,
communication and travel costs. IAG’s
airlines recognise the need to look after
their customers in this way but
encourage the reform of consumer
regulation EU261 and the UK equivalent
to recognise that ANSPs and airports
should equally be responsible for the
costs incurred where their actions are
the cause of delays and cancellations.
This unfortunate NATS incident came
during the regulator’s consideration
ofits regulatory price review, the results
of which see a 25% increase in average
unit rate in nominal terms compared
with 2022. This increase is driven by the
fact that the regulatory system includes
a traffic risk-sharing system that
effectively allows NATS to recover
thelost revenue from the pandemic.
Thedecision does however include
reductions in NATS En Route Limited’s
underlying cost base through to 2027
and provides a balance of efficiency
andeffective service provision.
Through A4E, IAG also engaged
indiscussions with the European
Commission’s Performance Review
Body, aiming to encourage improved
efficiency, better value for money and
enhanced operational performance
fromANSPs in Europe. IAG supports
theimplementation of the Single
European Sky to deliver environmental
and economic benefits over the
longerterm.
International relations
IAG maintained close engagement
withregulators in key markets around
the world to ensure positive relations
and to ensure the benefits of its
operations are understood. This includes
monitoring developments in
international air service agreements
andcontributing to government talks,
where appropriate, between the states
in which IAG’s operating airlines are
based and states representing important
markets around the world.
For example, in November this included
attending the special meeting of the
EU-US Joint Committee on air transport
that explored the US’ complaint
againstthe EU relating to the reduction
incapacity imposed at Amsterdam
Schiphol airport. Along with other
airlines, IAG contends that any such
questions of capacity should be resolved
with reference to the ICAO Balanced
Approach that considers the benefits
and negative aspects of aviation activity
fairly. We welcomed the Government
ofthe Netherlands’ decision in October
to halt its plans and continue to
advocate the continued use of all
available capacity at Amsterdam
Schiphol airport and to address
environmental concerns through
othermeasures.
42

10.0%
Operating margin before
exceptional items
+7.2 pts vly
-9.9%
ASK change
vs 2019
86.2
gCO
2
/pkm
Carbon intensity
-3.3% vly
“We continue to rebuild
our airline, putting
alaser focus on
transformation across
the whole business,
toensure we deliver
for our customers,
ourinvestors and
ourpeople.”
Sean Doyle
Chairman and Chief Executive
Officer of British Airways
British Airways
foreveryone
Business overview
In 2023 we continued to focus on
ourrecovery and the transformation
ofourbusiness to create a better
BritishAirways for our customers
andourcolleagues. We delivered
astrong operating profit, continued
tostrengthen our balance sheet and
materially reduce our debt, enabling
usto supercharge our transformation
through a £7 billion investment into
ourcustomer and colleague experience
over the next three years.
While we have seen a large number of
customers flying with us this year and
demand for travel approaching pre-
pandemic levels, we recognise business
travel continues to recover at a slower
pace than anticipated, with incremental
improvements throughout the year,
offset by a continued strong leisure
performance. There is no denying
wecontinued to experience a number
ofheadwinds throughout the year,
manyof which were outside our control
and caused disruption to our customers’
travel plans. This included air traffic
control constraints, the August Bank
Holiday National Air Traffic Services
(NATS) outage, an increase in adverse
weather conditions and ongoing supply
chain issues. We worked hard to
alleviate thefactors within our control
and put arenewed focus on building
amore robust operation, punctuality
and investment in our customer
experience, our people and in our
sustainability commitments as part
ofour BA Better World programme.
Our people
We know our people are key to our
success and we’re extremely grateful
fortheir continued hard work and the
outstanding contributions they make
toour business. We’re focused on
improving pride and trust with our
colleagues and creating a culture that
makes them feel valued and empowered
to do the right thing for our customers.
Wecompleted the roll out of our
newuniform, designed by Savile Row
tailoring expert Ozwald Boateng, to our
30,000 uniform-wearing colleagues and
began investment in transforming our
workspaces, unveiling new colleague
rest areas at our airports and hangars
and collaborative workspaces in our
offices. We’re taking positive action
todrive inclusion across our airline, but
we don’t shy away from the fact that
there is more work to be done. We
continue to champion and encourage
our colleague-led networks and
celebrate different perspectives,
backgrounds and experiences.
Welaunched an industry-leading
fully-funded cadet pilot training
programme, making the profession
accessible to everyone. Throughout the
year we recruited 7,500 new colleagues
into the business and continued to build
more constructive relationships with the
trade unions that represent our people
and enhanced our staff travel policies.
Our recent colleague survey results
show increased levels of engagement
that indicate we’re making progress in
rebuilding trust with our people.
Our customers
We continue to invest for our customers
and remain focused on improving
thecustomer experience and our
NetPromoter Score. In 2023 we took
delivery of 10 new fuel-efficient aircraft,
continued to fit our business cabin seat,
the Club Suite, onto our existing
long-haul fleet and are providing our
engagement centre colleagues with
more tools and new technology to
better assist our customers.
We’ve also ramped up our extensive
transformation programme, which
includes innovation across every area
ofour business between 2024 and 2026.
We have more than 600 initiatives
underway which range from trialling
biometrics on selected international
flights to speed up the boarding
process, to using artificial intelligence
and situational awareness tools
toimprove our operational efficiency
andenhance the customer experience.
We continue to connect Britain with
theworld and the world with Britain,
andin 2023 launched new routes to
Cincinnati, Riga, Belgrade and Cologne
from Heathrow and services to Aruba,
Guyana, Accra, Fuerteventura
andSharmEl Sheikh from Gatwick.
Following athree-year period
ofsuspended operations due to
theCOVID-19 pandemic, we resumed
operations tomainland China and
announced wewillbe returning
toAbuDhabi in summer2024.
We also continue to improve our
Executive Club loyalty programme
and,in conjunction with IAG Loyalty,
launched Avios-Only flights to a number
of short-haul destinations across our
network, where every seat is exclusively
British Airways
43

New aircraft. In 2023 British Airways
took delivery of 10 new fuel-efficient
aircraft including the Airbus A320 and
A321neo, A350-1000 and Boeing
787-10 Dreamliner.
British Airways unveiled its
new uniforms
British Airways
New Club Suites
available for purchase using the loyalty
currency. As part of this proposition,
weannounced we will operate our first
long-haul Avios-Only flight to Dubai
inlate 2024.
Our planet
We remain fully committed to reducing
the impact flying has on our planet and
sustainability has continued to be front
and centre of our business strategy.
All flights departing from London
Heathrow now fly with a small amount
ofSustainable Aviation Fuel (SAF)
andwe continue to work closely with
industry and government to scale up
development, which is urgently needed.
Through partnerships in the UK andUSA,
we continue to invest in SAF. Recently
Project Speedbird, ourpartnership with
Nova Pangaea Technologies and
LanzaJet, secured £9 million in funding
from the Government’s Advanced Fuels
Fund. We’re also empowering our
customers to address their emissions,
viaour CO
2
llaborate platform, where
customers can choose to purchase
carbon removal credits or SAF before,
during or after their flight.
In 2023, we celebrated raising more than
£28 million for Flying Start, our charity
partnership with Comic Relief, since our
partnership began in 2010, and 10 years of
partnership with the Disasters Emergency
Committee (DEC). Through our BA Better
World Community Fund, our customers
and colleagues helped toraise more than
£5 million in funding to support more than
170 charities across the UK.
Looking forward
We remain committed to operating
astrong and stable schedule and
delivering for our customers and
colleagues by running an airline of which
they can be proud, whilst managing our
costs and ensuring we’re operating
safely and efficiently. As we transform
our business, we continue to modernise
our fleet with the delivery in 2024 of
more than 14 next generation fuel-
efficient aircraft, invest in our customer
and colleague experience, and consider
our environmental impact at every stage
as we work together with our people
tocreate a better British Airways for
everyone.
44

“In 2023, we achieved an
historic operating result
in terms of absolute
profit and operating
margin. We have
benefited from a positive
industry environment
and continue to deliver
onthe transformation
we have been executing
for over a decade.”
Fernando Candela
Chairman and CEO of Iberia
Delivering on our
transformation
Business overview
In 2023, we saw a strong financial
performance that has allowed us to
make an early repayment of debt, which
was guaranteed by Spain’s Instituto de
Crédito Oficial (ICO). These results have
been possible due to a favourable
macroeconomic environment, and the
improvement of inbound tourism to
Spain, which has seen an increase in the
number of tourists and levels of
consumer spending.
Iberia has continued to be ahead of its
competitors during 2023 in terms of
capacity, which, along with the supply-
demand imbalance we are seeing in the
industry, has been a key driver of our
remarkable results.
We added six Airbus A350-900, three
A320neo and six A321neo aircraft to the
Iberia and Iberia Express fleets, which
are at the core of our transition towards
a more sustainable aviation industry. We
have expanded our network by opening
new routes such as Doha and Cairo, and
increased frequencies to important
destinations such as Bogotá and Lima.
As part of our commitment to develop the
connectivity and competitiveness of the
Madrid hub, we continue to make
progress on our proposed acquisition of
Air Europa. The acquisition remains
subject to securing the required approvals
and is expected to take place between 18
to 24 months after our announcement of
the transaction in February 2023.
In September, we lost the handling
licences at eight Spanish airports,
including Barcelona and Palma de
Mallorca; however, we have won and
maintained the licence to operate other
major airports such as Madrid Barajas.
Our people
Once again Iberia's employees have been
the company's greatest asset. Team effort
is what makes it possible to achieve the
highest standards of quality every day.
In 2023 we reaffirmed our unwavering
commitment to creating and maintaining
stable and high-quality employment, and
to do so we have improved the working
conditions and salaries of our entire
workforce.
At Iberia contractual agreements are
being implemented across our
businesses as a sign of our commitment
to the wellbeing and professional
development of our team.
At Iberia Express, we reached collective
bargaining agreements with our pilots
and cabin crew until 2025.
In addition, 164 pilots, 512 cabin crew
and 222 maintenance staff joined Iberia’s
workforce.
Our customers
Operational excellence and punctuality
are key factors for our customers. Iberia
and Iberia Express have been the most
punctual airlines in Europe and Iberia
fifth globally, according to the 2023
Cirum On-Time Performance Review.
Also, we have reached historic levels in
both NPS and customer satisfaction, by
improving our engagement culture and
all customer communications.
In 2023, we continued to roll out our new
business cabin, thanks to the arrival of
four new latest-generation Airbus
A350-900s, together with two leased
A350-900s. The aircraft have
contributed not only to operational
improvements, but also provide greater
comfort in all cabins, with enhanced
privacy, increased space and new
lighting environments. These aircraft
offer state-of-the-art connectivity and
in-flight entertainment so passengers
can enjoy their experience to the fullest.
We redesigned the in-flight meals
throughout our network. We renewed
our offering in the economy and
premium economy cabins on long-haul
flights by introducing a between-meals
service, while our business cabin now
includes healthy products, such as fresh
fruit, as part of the on-board meals.
All these improvements have allowed us
to retain our 4 Skytrax stars this year.
Our planet
In 2023, we continued working on the
development of our sustainability
strategy, to drive forward the transition of
the industry. Iberia and Repsol joined
forces in March to offer the purchase of
Sustainable Aviation Fuel (SAF) to our
corporate clients, allowing them to reduce
the emissions of their business trips.
13.5%
Operating margin
before exceptional items
+6.4 pts vly
+3.2%
ASK change
vs 2019
68.5
gCO
2
/pkm
Carbon intensity
-4.4% vly
Iberia
45

In September, we presented ‘All4Zero’, a
unique industrial innovation hub formed
alongside ArcelorMittal, Holcim and
Repsol, created to promote disruptive
technologies around sustainable fuels. In
November, Iberia Express obtained
IATA’s IEnvA environmental certification
for the airline’s commitment to
sustainability and in December, Iberia
implemented the IAGOS system on an
Airbus A330-200 to record the
composition of the atmosphere for the
subsequent development of more
accurate weather and climate models.
This year we reduced our carbon
intensity by 13.0% compared to 2019,
bringing us ahead of our 2025 target.
Looking forward
During 2024 we will continue improving
our long-haul operation with the delivery
of our first A321 XLR allowing us to
address long-haul destinations with
anew and more flexible aircraft.
On handling, after the outcome of the
tender for licences, we have been
progressing to reach a solution both
from the business perspective and for
the people in affected airports.
Our operational excellence, our improved
revenue performance and our cost
model will allow Iberia to look forward to
2024 with optimism, even if the current
macroeconomic and supply-demand
imbalance tailwinds will be a challenge.
In 2023, we improved the
working and salary conditions
of our entire workforce.
46

12.4%
Operating margin before
exceptional items
+5.2 pts vly
+8.5%
ASK change
vs 2019
78.9
gCO
2
/pkm
Carbon intensity
-5.4% vly
“Our transformation
ispositioning Vueling
among the
top-performing
European low-cost
carriers, thanks to
thegreat efforts of
our4,700 colleagues.”
Marco Sansavini
Chairman and Chief Executive
Officer of Vueling
Connecting
people andplaces
Business overview
The Vueling mission statement talks
about our love of connecting people and
places, and in 2023 we did so morethan
ever: we flew almost 37 million
passengers, a Vueling record.
We achieved strong operating profits,
supported by one of the best-
performing operations in Europe.
Notonly are we taking advantage
ofthestrong recovery in demand,
butwe areemerging from the pandemic
crisisstronger.
When we talk about our transformation,
there are some examples that say it all:
• our punctuality placed us among the
top European airlines: 80% of
flightsdeparted within 15 minutes
ofschedule, 4.7 points above 2019.
Forour customers, we are now
atanother level;
• our line maintenance allows ustohave
half as many aircraft grounded for
technical reasons, compared to2019;
• we drastically reduced our seasonality.
In 2019 we had 40% moreactivity in
summer than in winter. In2023 we
reduced this difference byhalf,
allowing us to bemuch more efficient.
We operated 8.5% more available seat
kilometres in2023 than in 2019, driven
bythissuccessful increase in
wintercapacity;
• our ancillary revenues doubled
compared to 2019; and
• our load factor reached 91.4%,
4.5points higher than in 2019.
Like many airlines, Vueling was
impactedin 2023 by Pratt & Whitney
geared turbofan engine issues.
Wemitigated these impacts by
optimising our fleet plan, re-balancing
capacity across months, wet leases,
andothermeasures.
Our people
All this has been possible thanks to
theefforts of everyone at Vueling,
managing day-to-day operations and
supporting our transformation at the
same time.
Reflecting the responsibility and care that
we have for our people, and as part of
our transformation plan, we continued
improving our work environment.
Forexample, we launched a new
programme for our people’s health
andwellbeing, which we call ‘Make It
Healthy’, and we organised a number
ofoutside-of-work opportunities for
people to connect, including our
inaugural Vueling family and friends day.
In 2023, we achieved a critical milestone:
we signed a new collective labour
agreement with our cabin crews and
office team in Spain, which recognises
and rewards their dedication while
maintaining a sustainable cost structure.
Our aim remains to reach a sustainable
agreement with our pilots in Spain,
enabling us to unlock our growth
potential.
We set down a manifesto to make clear
our commitment to diversity, equity and
inclusion. This commitment is reflected
in the equity plan that we signed with
our unions and in the Vueling
Management Committee.
Our customers
We know that customers have a choice
when they fly, so we are fully
focusedonproviding an experience
thatdifferentiates Vueling from other
low-cost carriers.
In addition to delivering one of the
moston-time operations in Europe,
weupgraded the Vueling customer
experience in other ways too.
Weenhanced the use of biometric
technology at Barcelona, Madrid, Palma
de Mallorca, Ibiza and Menorca airports,
implemented a new social media
platform to make our case management
more efficient, and partnered
withindustry-leading technology
organisations to digitalise our customer
care and disruption management.
In recognition of our outstanding
customer service, Sotto Tempo
Advertising gave Vueling the award
forServicio de Atención al Cliente
delAño (Customer Service of the Year)
in the airlines category, based on
independent market research.
Our planet
Increasing Sustainable Aviation Fuel (SAF)
supply and adoption is essential for
reaching Vueling and IAG’s net zerocarbon
emissions target. Vueling engaged public
institutions and potential SAF producers
through workshops and roadshows, to
communicate the benefits that SAF
production can create for theenvironment,
employment and theeconomy. We
Vueling
47

Top: New generation aircraft reduce
fuel burn and CO
2
emissions by 20%
with respect to their predecessors.
Bottom left: Vueling introduced a
Honeywell fuel efficiency app to all its
pilots, with the purpose of sharing
operational and best practices data to
enhance decision-making in their
day-to-day duties.
Bottom right: Vueling is the very first
commercial airline in Europe and the
first low-cost carrier to be awarded the
Top Employer certification.
Looking forward
We are proud of the progress we are
making, yet we are aware that we are
still just halfway through the journey
toreaching our full potential – to be
theleading low-cost carrier in all the
markets we choose to serve. On this
journey, we will overcome industry
challenges such as geared turbofan
engine issues. We need to reach a
sustainable agreement with our pilots in
Spain as a necessary condition for
investment in Vueling’s growth and fleet.
We will continue the many other
transformation initiatives that are
delivering measurable results.
In short, the transformation continues.
Itis how we are ensuring Vueling’s
long-term competitiveness, and it is what
will allow us to do even more of what we
love: connecting people and places.
engaged our customers through a new
online CO
2
calculator that allows them to
estimate their carbon footprint before
deciding whether to pay for SAF and
carbon capture. We engaged all Vueling
employees to elicit creative ideas onhow
we can further promote SAFdevelopment.
We also take seriously our commitment
to society. Airlines are uniquely
positioned to facilitate humanitarian
aidafter natural disasters, and Vueling
operated humanitarian missions
toTurkey after the earthquakes in
February, Tenerife after the wildfire
inAugust, and Morocco after the
earthquake in September. We also
collaborated with Make-A-Wish, Lovaas
Foundation and Save the Children to
support children in vulnerable situations,
and we celebrated our tenth year of
collaboration with the Spanish
Organización Nacional de Trasplantes
(National Transplant Organisation).
48

9.9%
Operating margin before
exceptional items
+6.7 pts vly
+4.4%
ASK change
vs 2019
82.6
gCO
2
/pkm
Carbon intensity
-3.6% vly
“Our largest summer
schedule delivered
apeak performance
underpinning
ourprofitability.”
Lynne Embleton
Chairman and Chief Executive
Officer of Aer Lingus
Building
astronger
Aer Lingus
Business overview
The year 2023 saw growth, in both
capacity and profit, supported by
investment in digital transformation
andenhanced customer experience.
Strong demand for leisure travel led
toan exceptional summer, delivering
ourhighest-ever third-quarter profits.
Business travel recovery continues to
lagthat of leisure, which has put
pressure on profitability in the off-peak
months and exacerbated the seasonality
of Aer Lingus’ results. We built our North
Atlantic leadership position; we now
have the fourth largest number of direct
destinations from Europe into the US.
We expanded into secondary cities,
leveraging the geography and US
preclearance facility at our Dublin hub,
adding a new route to Cleveland which
performed really well in its first year.
Onour European network, demand
formajor sun destinations and new
Mediterranean routes was exceptionally
strong, while the resurgence in demand
for European city breaks also
contributed to a strong summer.
Afocuson operational performance
ledto process improvements and quick
recovery from disruption events such
asthe UK’s aircraft control (NATS)
outage in August. Nevertheless,
thesummer operation was challenging,
most notably due to aircraft availability
and to ongoing Air Traffic Control issues
in Dublin, the UK and France.
We started 2023 with a new brand
advert and tagline “You’re very
welcome” showcasing the warmth of our
service and our people. This was
underpinned by ‘customer first’ training
for over 2,500 colleagues. The strength
of ourbrand and the improvements in
customer experience were reflected in a
higher Net Promoter Score.
Our customers
We delivered a significant
transformation in our Customer Contact
Centre following the difficult post
COVID-19 restart, and we are now
providing a vastly improved service
tocustomers. Technology investment,
workflow change, process redesign
andbot automation collectively have
brought average wait times to
consistently below two minutes, with
90% of calls directed to the appropriate
agent. Overall customer satisfaction
rates are now 30% higher than in 2022.
Our investment in digital improvements
isalso making a difference to our
customers, with additional information
and functionality on our app, resulting
inabetter ‘day of travel’ experience.
Ourability to continue improving the
customer experience has been greatly
advanced with the introduction of
Salesforce, allowing us deeper insights
into our customers and enabling us
tooffer a personalised and digital-led
experience throughout their travel journey.
Recognising loyalty is also important
tocustomers. We have continued
towork closely with IAG Loyalty
toenhance our offers and services
toAerClub members, an effective
partnership that has seen us expand
ourAerClub membership to 2.4 million
customers, a 28% increase from 2022.
Our people
Our people go above and beyond every
day to deliver for our customers. They
are the people who make what we do
possible. In 2023, we continued to
improve communication and
engagement with our colleagues. Our
ambition is to create an inclusive
environment, where our people are
aligned with our strategy
andrecommend Aer Lingus as a place
to work. We want everyone to feel
empowered to own the brand promise
“We are simply people who do
everything we can for the people who
fly with us.” We launched a new digital
communications platform
company-wide, AerWaves. After only
three-months, over two-thirds of our
colleagues have signed up. This enables
us to share knowledge while fostering
asense of belonging and teamwork
inthe airline. In response to feedback,
we have also created an Idea Hub,
whereemployees can contribute
suggestions for continuous
improvement across the company.
We have also made significant progress
in industrial relations starting with a new
pay deal with Dublin Ground Handling
staff and then with cabin crew based
inboth Ireland and Manchester.
Importantly we reached a pay
agreement with our line maintenance
engineers which will help us retain
andattract talent, while providing
Aer Lingus
49

growth by Aer Lingus out of Dublin. The
airline has also supported the relaxation
ofnight-flight restrictions at the airport.
Both issues are currently going through
the Irish planning process and the timing
and manner of resolution is uncertain.
TheAer Lingus transformation
programme iswell underway, and many
more projectsare in the pipeline for 2024
–encompassing hub development,
deepening partnerships, modernising IT,
increasing data and digitalisation, and
investment in our people.
We are committed to developing
Aer Lingus asagrowing, profitable,
customer-centric airline, with a strong
brand and a great place to work.
betterwork coverage to support
ouroperations.
Following the rejection by pilots of a pay
tribunal recommendation, Aer Lingus
and the pilots’ representative
organisation (IALPA) commenced
further discussions in the Workplace
Relations Commission (Ireland’s
employment conciliation service).
As part of our mission to improve
diversity and inclusion at Aer Lingus
wehave placed much focus on female
pilot recruitment. Aer Lingus ranks third
in the world in terms of the proportion
offemale pilots (11% of our total) and
weare determined to increase this,
starting with the significant jump
weachieved in female applications for
ourFuture Pilot Programme in 2023.
Our planet
Further steps were made in our
commitment to sustainability,
andwewere pleased to attain IATA's
Environmental Assessment (IEnvA)
Stage 2 certification.
In 2023, Aer Lingus became the first
airline flying into Ireland to segregate and
recycle on-board waste. We now recycle
waste from over 90% of short-haul flights
into Ireland and have completed trials
onlong-haul routes, with a target to
recycle 20% of on-board waste by 2024.
Other important steps in our sustainability
journey in 2023 were the investment in
two new Airbus A320neo aircraft, and the
introduction of hydrotreated vegetable oil
(HVO) to replace diesel use in our airside
ground vehicles at Dublin Airport.
Looking forward
In 2024 we will maintain our North
Atlantic leadership from Dublin whilst
continuing tooffer an attractive
schedule for European leisure travel.
Dublin Airport has lodged a planning
application to increase the passenger
capat the hub airport from 32 million to
40 million passengers per year. Aer Lingus
has supported the application and is
engaging with relevant stakeholders on
what is required to accommodate future
Above: Celebrating Irish pride as an
Official Sponsor ofthe Irish Rugby
Team.
Right: In June 2023, Aer Lingus flew
ourpartner Special Olympics
TeamIreland to the World Games. 73
Team Ireland athletes and a 36-strong
support team travelled to Germany for
one of the biggest inclusive sports
events in the world.
50

21.7%
Operating margin before
exceptional items
-6.7 pts vly
81.0%
External billed revenue
+1.0 pt vly
142.8
billion
Total Avios issued
+36% vly
“In 2023 our business
reached new heights
once again. More Avios
were issued and
redeemed than
everbefore.”
Adam Daniels
Chairman and Chief Executive
Officer of IAG Loyalty
A record-breaking
year, with more
tocome
Business overview
In 2023, we again saw record-breaking
performance as we both materially
improved our core customer proposition
and expanded our business in
newdirections.
We have seen record growth in both
collection and redemption of Avios,
driven by new opportunities we are
creating for our customers. We are
alsoin theprocess of transforming
IAGLoyalty’s data capabilities, which
represents amajor opportunity to drive
our business forward by unlocking
opportunities to better target potential
customers. External partners continue
toaccount for over 80% of our billed
revenue. With the return of collection
from flying and higher redemptions, our
operating margin continues to normalise
to pre-COVID-19 levels, and now stands
at 22%. We are developing Avios to be
aglobal currency, and a new partnership
with Finnair willsee the airline adopting
Avios as its currency from 2024. Our
newest retail venture, The Wine Flyer,
saw strong revenue growth this year.
Weremain committed to launching
another newbusiness in 2024, under the
direction of our new Chief growth officer.
Our people
Our commitment to a compelling people
proposition continued to support IAG
Loyalty's success in 2023. Anchored
inour people plan – encompassing
talentdevelopment, people experience
andculture – we continued to focus
onattracting, growing and retaining
engaged talent to fuel our ambitious
growth plans. We remain grateful to
ourcolleagues for all their hard work
thisyear.
As part of our people-centric strategy,
we formed colleague squads, dedicated
to missions like Charity, Equity, Diversity
and Inclusion (EDI) and our recent
workspace relocation. These missions
empower colleagues to deepen their
connection to IAG Loyalty and play their
part in enhancing the overall experience.
Highlights include the selection of a new
charity partner – Winston's Wish – for
which we have raised almost £50,000
so far, and a calendar of EDI events and
moments that matter that drive a strong
sense of belonging.
Our colleague listening indicators show
that IAG Loyalty colleagues have
astrong sense of belonging and feel
empowered to contribute to the success
of the business in multiple ways. As we
look forward to 2024, the people plan will
remain integral to IAG Loyalty's growth.
Our customers
In 2023, our programme saw significant
growth in member engagement
compared to our previous highs in 2019.
For example, members are earning 29%
more Avios and redeeming 35% more
Avios on average than they did in 2019.
In 2023, we launched Avios-only flights
with British Airways, with 100% of seats
available exclusively to Executive Club
members redeeming with Avios. We also
launched Avios Balance Booster, which
allows customers to pay to multiply the
Avios they have recently collected by
one times, two times, or three times. We
have been delighted with our customers’
response to both products.
We also completed the transition of
allthe IAG airlines’ loyalty programmes
to a spend-based model when earning
Avios. This system is simpler and fairer,
and we expect member engagement
toincrease further as a result.
We continue to add collection partners
to our ecosystem, as well as growing
ourrelationship with newer partners like
Uber. We launched six new partnerships
this year, giving our customers the
ability to earn Avios with new retailers
and financial services providers across
multiple countries. Total billings on our
British Airways American Express
co-brand credit card grew more than
19% this year. Spend across our UKcard
portfolio is now the equivalent value of
more than 1% ofUKGDP.
Our planet
2023 has seen continued growth
ofmember donations to charity. Iberia
Plus members, through Avios Solidarios,
have donated generously to support
their choice of non-governmental
organisation. British Airways Executive
Club members have continued to
support causes through the BA Better
World Community Fund using Avios.
This initiative was launched in November
2022, with over £200,000 raised
through acombination of members’
Avios donations and match funding
provided by IAG Loyalty.
IAG Loyalty
51

From November 2023, British Airways
Executive Club members can choose
tocontribute to British Airways’
Sustainable Aviation Fuel fund using
their Avios onboard short-haul flights
viathe High Life Café.
We will continue to expand the ways
inwhich loyalty can be used for good
byproviding more ways to give back
and recognising and rewarding
customers who choose to do so.
Looking forward
We will continue to grow our core
business in 2024 by evolving our
customer proposition and growing
opportunities for our members to collect
and spend Avios on rewarding
experiences. We will also be investing
inexpansion into new areas. We expect
this growth to bring new operational
challenges, as we work to manage a
business that is increasingly complex.
Our focus is maintaining strong margins
at the same time we seek to deliver
double-digit growth, and to be a central
part of overall Group profitability.
Top: Incentivising members with the
world’s best experiences. More
availability, more choice and easier
than ever before – the reward options
with Avios are growing in all directions
for members.
Bottom left: The Wine Flyer is an online
wine delivery business available
toloyalty programme members.
Bottom right: Chief commercial officer,
Rob McDonald, spoke onstage at
Skift's flagshipevent.
52

“Our transformation
journey in 2023
wasallabout our
customers and our
team. We made
substantial progress,
continually improving
our customer
experience and
fostering a workplace
where talent thrives.”
David Shepherd
Managing Director of IAG Cargo
Turning vision into
transformation
Business overview
Our strategy has undoubtedly been put
to the test during 2023, but increased
premium handling capacity, improved
productivity in our operations and
astrong transformation programme
have combined to deliver a robust
performance, relative to market. I would
like to thank all our colleagues around
the world for their hard work and
contribution to us achieving this result.
The anticipated supply-side growth
driven by the rebound of global
passenger capacity, combined with a
greater-than-expected decline in
demand, has resulted in the softest
global air cargo market since the 2009
global financial crisis. The resulting
decline in prices from peak pandemic
levels has been seen globally, although
they have not receded to pre-pandemic
levels.
We have delivered revenues 3.5% higher
than pre-pandemic 2019 levels on 14.4%
lower available tonne kilometres (ATKs),
despite a detrimental network mix
relative to 2019 with Asian flying
hindered by longer flying hours due to
the Ukraine conflict. We have continued
to deliver our ambitious strategy
oftransformation, opening our new
premium operation at London Heathrow
which improves our pharmaceutical
offering in particular, whilst reconnecting
with customers and improving both
productivity and product quality.
Our people
Making IAG Cargo a great place to work
continues to be a top priority. In 2023,
we invested in our people in a number
ofways: refreshing facilities, improving
training delivery and continuing to build
on a culture change founded in our
corevalues.
We launched our new flagship
development programme, Leading
theWay, supported by a brand-new
learning hub at our headquarters.
Over500 colleagues from 13 countries
attended the course in person in 2023.
We launched Pride in Our People, IAG
Cargo's first people awards programme
that recognises the dedication of six
individuals delivering on the themes
ofour values, of determined attitudes,
collaborative actions, curious minds and
heartfelt pride, with two special awards
for rising star and leading the way.
We are making significant progress
inour commitment to Equity, Diversity,
andInclusion (EDI) by advancing gender
parity in an industry where it has
traditionally been more difficult to do so.
This includes our supporting the 2023
everywoman in Transport and Logistics
Awards. We took second-place position
in the Lead5050 Equity Index 2022/23,
and we were finalists in two categories
at the Multicultural Apprenticeship
Awards 2023.
Our customers
During 2023, our network expanded: we
welcomed China back after almost two
years, opened Cincinnati, an important
hub for ecommerce, added a new
service between Doha and Madrid, and
increased capacity to Accra. Through
our Partner Ready programme, we
partnered with other carriers to sell
routings on a more connected interline
basis, growing ournetwork and offering
new routings to our customers,
improving their marketchoice.
We invested significantly in our cargo
handling capabilities, opening a semi-
automated state-of-the-art Premium
cargo facility at London Heathrow,
over10,000m
2
which has allowed us
todouble the volume of express,
pharmaceutical and specialist products
we manage every day. Sales of our
product for the transportation of
temperature-sensitive cargo, which is a
key focus area for IAG Cargo, saw an
17.9% increase versus 2022.
At our Madrid hub, a €1 million
investment for perishable goods was
completed, expanding our handling
capacity. We introduced dynamic spot
rates in 2023. This capability uses
artificial intelligence (AI) and predictive
analytical technology to ensure that our
pricing remains relevant and optimal at
all points of sale. We have grown our
distribution channels and increased
digital bookings throughout the year,
and our continued development in
thisarea will move us toward a more
complete digital distribution capability.
Our planet
We are proud to be a socially
responsible business with a real
commitment to having a positive impact
in the communities in which we operate.
In 2023, we initiated a humanitarian
emergency response supporting
severalcharities to deliver aid to Turkey
IAG Cargo
53

following the devastating earthquake.
Our ‘Day to Make a Difference’ initiative,
now in its second year, saw colleagues
support a range of community projects,
from revamping neglected community
gardens to supporting a children’s
NGOin India.
We collaborated with London’s Natural
History Museum to transport the cast
and fossils of one of the world’s largest
dinosaurs from Buenos Aires to London
for its educational exhibition ‘Titanosaur:
Life as the biggest dinosaur’.
We broadened our electric and hybrid
vehicle testing programmes with the goal
of replacing all existing diesel vehicles
across our campus. Additionally, we
enhanced our commitment to the
necessary infrastructure by expanding the
availability of electrical charging stations
for our customers, colleagues and visitors.
In 2023, we supported several
customers to reduce their Scope 3
carbon emissions by over 90,000
tonnes through the purchase of
Sustainable Aviation Fuel. We are
accelerating the digitalisation of all
documents across our business,
supporting customers to transition to
e-Airway Billing (eAWB) with an
ambition toget to 100% as quickly as
possible. The digitalisation of
documentation isnot only positive for
the environment but offers a more
seamless end-to-end service for
customers, improving messaging and
data quality by reducingthe chance of
human error.
Looking forward
Our performance in 2023 is a
demonstration of resilience amidst
challenging economic and market
conditions. We will continue to drive
forward our ambitious transformation
programme as we create a more modern,
digital and agile business. By staying
focused on these priorities, I am confident
that we can strengthen our position,
creating a workplace community that
isideally positioned and committed to
delivering for our customers, to ensure
weare their preferred choice for air cargo
transportation.
Top: Our new warehouse at London
Heathrow improves our
pharmaceutical offering.
Bottom left: IAG Cargo launches its
internal Pride in Our People awards.
Bottom right: Making IAG Cargo a
great place to work continues to be
a top priority.
54

“By focusing on
improving performance
through automation
andstandardisation,
wehave optimised
processes to bring
greater efficiency to our
core platform and push
forward the Group’s
sustainability ambitions.”
Jorge Saco
Chief Information, Procurement,
Services and Innovation Officer
Driving automation,
process optimisation
andsustainability
Business overview
In 2023, IAG GBS continued to work
inpartnership with the Group, providing
best-in-class services, solutions and
insights, driven by data, innovation
andtechnology.
By leveraging our unique position as
adata hub within the Group, we have
continued to generate value and provide
solutions, to enable IAG and all our
operating companies to thrive.
Our people
Our people are at the heart of
everything we do, and we are thankful
to have such a professional and
dedicated team in IAG GBS.
We have continued to attract, engage,
develop and retain experts to further
improve our high-performing team.
Weenhanced our Learning Academy,
with bespoke training and development
for our people.
We introduced a Mental Health
FirstAiders framework across our
locations, providing support for our
people; as well as our BeWell Programme,
sharing awareness and providing
support on emotional, physical,
financialand environmental wellbeing.
We have launched new leavepolicies
toprovide flexibility andpromote better
work-life balance.
We strive to produce agile and efficient
services to deliver an exceptional
colleague experience, underpinned
byaculture of engagement, innovation
andambition.
Our customers
IAG GBS has moved forward with
enhancing and automating finance
systems and business processes,
todeliver further value to the Group,
providing greater transparency and
efficiency as well as improved contract
management and control. We have
continued to leverage our data and
insights to optimise our processes
andprovide greater value for money,
both intransactional and reporting
activities for the Group.
We have focused on maximising and
driving supplier cost savings across
theGroup, implementing transparent
and granular reporting of supplier
costperformance. We continue to
digitalise procurement processes with
new end-to-end systems and more
efficient tracking systems, using data
and analytics to deliver more cost-
saving opportunities.
Our planet
IAG GBS continues to support delivery
of IAG’s Scope 3 commitment. Working
with EcoVadis, we have focused on
driving Group suppliers to improve their
sustainable performance, to ensure the
Group is on track to deliver net zero
emissions by 2050 for all products
andservices provided to IAG.
We are implementing a carbon
accounting tool to provide fact-based
data that calculates our carbon
footprintand that of our supply chain.
We have been at the forefront of
sustainability innovation within the
airline industry, designing and delivering
solutions such as purchasing Sustainable
Aviation Fuel, and trialling the use
ofautonomous vehicles to innovate
ground handling operations.
Looking forward
2023 has started the journey of
maturing AI and automation capabilities
to rethink and transform each area of
the business. Our platform of services,
leveraging common data, technologies
and processes will bring further
operational and financial insights
tomaximise value across the Group’s
operating companies.
IAG GBS
55

capabilities to support our operations
across the Group, particularly data
scientists and engineers, welcoming
114new hires to IAG Tech.
In addition, we provided further training
and development for our people,
including support and coaching for
maintaining personal resilience during
peak operational periods.
None of the progress we made in 2023
would have been possible without the
commitment and professionalism of our
people.
Our customers
We made significant investments to
further improve our airlines and Loyalty
customer platforms with new
functionality that delivers real value.
Forexample:
• we continuously reviewed and
improved the cybersecurity controls
we use to protect our data and
infrastructure from cyberattack;
• we are transforming our commercial
platforms to provide better
andcustomised offerings and
experiences to our customers
whilealso investing in operations
optimisation and IT efficiencies
andenablers; and
• we continued to invest in our
infrastructure to support fast,
reliable, and secure services for
ourcustomers.
We continued to refresh mobile devices
across front and back-office
employeesto take further advantage
ofdigitalisation and better support
ouroperations and customers.
Our planet
Our innovation teams continued
tolookfor new ways to improve our
environmental sustainability, partnering
across the organisation on rapid
prototyping, testing and scaling up
successful solutions that can provide
thebiggest impact. Our Hangar 51
Ventures team completed several
Business overview
During 2023, we significantly increased
the resilience and operational efficiency
of our IT systems, ensuring they were
available when our customers needed
them, which resulted in a more stable
peak summer period than in 2022,
withreduced incidents of disruption.
We invested significantly in cybersecurity
tooling and expertise to keep our data
and IT estate secure. We continued to
build for the future by further modernising
our IT estate and remediating
obsolescence, making steady progress
with our migration to the cloud, moving
toward completion in 2024. We increased
our investment in IT transformation for
our commercial platform and customer
journey, as well as operations optimisation,
and IT efficiencies and enablers.
We also invested in our Artificial
Intelligence (AI) capabilities, and data
andanalytics. We brought together a new
IAG.ai team and launched a new London
Lab to promote and strengthen our
innovation and venture capital ambitions.
Our people
We continued to evolve our IT operating
model to respond to changing business
needs and new ways of working while
continuing to deliver value for the
Group. By using agile methodologies
and product-led teams we can increase
the pace of digital innovation and
delivery for our customers.
We welcomed a new intake of graduates
to our teams this year, while our cohort
from 2022 continued to gain invaluable
experience through their chosen postings.
Our 2021 graduate cohort completed
their programme, and we areproud that
13 out of 14 of them found permanent
roles within the Group. In addition, all
our apprentices from 2021 completed
their programmes and found roles in
IAGTech.
We recruited talent to further strengthen
our teams and ensured we have the right
transactions with start-ups developing
new technologies for Sustainable
Aviation Fuel (SAF), hydrogen-powered
vehicles and airport operations to
reduce waste.
With the development of our Group-
wide data and analytics capabilities,
weare equipping business decision-
makers with tools and insights on flight
efficiency and maintenance optimisation
to enable emissions reduction.
We have committed to using AI in an
ethical and sustainable way, with active
governance to ensure we adhere to
theseprinciples. Our aim is to become
an industry leader in responsible AI to
increase productivity, transform customer
experience, streamline operations and
remove manual toil. Through AI, we want
people to be valued for their curiosity
and creativity, and notfor their ability
tomimic robots.
We continue to look at ways to reduce
the carbon footprint and energy costs
ofour IT estate, including through the
decommissioning of legacy systems and
migration to the cloud.
Looking forward
We will continue to invest in cybersecurity
to build on the work already done and
keep pace with the evolving cyber
threats we face. As wecontinue to
remove obsolescence, we will increase
our investment in transformation over
the next few years. We will mature our
AIand automation capabilities and use
data and analytics to deliver insights
that will better support all areas of our
business, accelerate innovation and
improve fact-based decision making.
Powered byVenture Capital investment,
our technology and innovation will push
current boundaries in sustainability,
automation and customer experience.
Strengthening our
operations and innovating
for the future
IAG Tech
56

“We continue growing
as a company and
making Barcelona’s
intercontinental
connectivity stronger.
Our commitment has
allowed us to become
the leading long-haul
airline in Barcelona.”
Fernando Candela
Chief Executive Officer of LEVEL
Growing our long-
haul proposition
inBarcelona
Business overview
In 2023, LEVEL was the leading
long-haul airline at the Josep Tarradellas
Barcelona – El Prat Airport. This
confirms our strong commitment to
thedevelopment of Barcelona’s airport
as a hub and the strengthening of the
intercontinental connectivity through
the sustained growth of our routes,
which connect Barcelona to the
Americas without stopovers. We
increased our capacity by 33.1% versus
the previous year, which is equivalent to
an extra 183,000 seats. Thisincrease in
capacity has also been possible thanks
to the addition of a fifth aircraft to our
fleet.
During 2023, we carried 40.5% more
customers than in 2022, with an average
punctuality within 15 minutes of 87.3%.
LEVEL provided more than a quarter of
the seats between Barcelona and the US
and almost half of the seats to South
America. We are the only operator
inthemarket in five of the six
destinations to which we fly.
Our people
On our sixth anniversary in June 2023,
we launched our new uniforms. The
project was a collaborative effort across
all areas, including LEVEL’s crew, in
partnership with the Barcelona School
ofDesign, as a sign of our commitment
to Barcelona. The uniforms are entirely
manufactured locally. The result reflects
the airline’s value proposition ‘Fly your
Way’, that provides a tailor-made
experience according to every
customer’s needs. Once again, LEVEL
demonstrates that the commitment
ofits team is at the heart of all
itsdecisions.
Our customers
We listen to our customers, and we
continue to enrich and improve the
on-board experience through brand
newentertainment content such
aswellbeing, mindfulness and yoga.
Inaddition, we improved our WiFi
connection system, which now provides
a free messaging service to all our
passengers. In 2023 we have renewed
our menu offering which includes nods
to the local gastronomy of all the
destinations to which we operate.
In2023, almost 45% of our passengers
used this platform and two out of three
people who had a meal included in
theirflight personalised theirmenu.
Our planet
We deploy technology to further
ourefficiency and contribute to our
sustainability objectives. Personalisation
allows us to optimise the cargo on-
board, reducing not only the weight and
waste generated, but also food waste.
We recalculate fuel needs 30 minutes
before each flight’s departure based
onthe final load of the aircraft and
anupdated weather forecast, which
hasled to a reduction of 3% of our CO
2
emissions, which represents a 9.8%
improvement compared to the target
initially planned for 2023.
Looking forward
LEVEL has initiated the procedures
toobtain its own Air Operator
Certificate (AOC) and a fleet expansion
plan that envisions reaching up to eight
aircraft by 2026. We will continue to
stimulate growth through the
strengthening and expansion of our
offering and through our number of
destinations, to consolidate our
leadership in Barcelona. And with all of
this, LEVEL will continue to give support
and to promote alliances with strategic
partnerships in Barcelona, our centre of
operations, to continue exporting the
talent of the city.
LEVEL
57

Sustainability
supporting
our purpose
2023 has been another
very important year on our
journey to be both a
leader in the industry in
sustainability and towards
our primary ambition to
achieve net zero emissions
by 2050.
The summary below outlines key
highlights from across IAG’s
sustainability programme in 2023, which
includes emphasis on increasing our use
and forward supply of Sustainable
Aviation Fuels (SAF), building our
sustainability governance around key
initiatives and enhancing our
sustainability reporting and disclosures.
Contents of this section
A. Planet
This section includes: Performance
highlights, Task Force on Climate-related
Financial Disclosures (TCFD) summary,
transition plan, metrics and progress,
emissions reduction initiatives, scenario
analysis, risks and opportunities,
stakeholder engagement, waste, noise
and air quality initiatives.
B. People and prosperity
This section includes: Key metrics and
progress, health, safety and wellbeing,
human rights and modern slavery,
diversity, equity and inclusion,
community engagement and
charitablesupport.
C. Principles of governance
This section includes: Sustainability
strategy, governance frameworks,
workforce governance, supply chain
governance, ethics andintegrity, ESG
risk management, reporting and data
governance and alignment with GRI and
SASB standards.
The full contents of this sustainability
report are included in the IAG
Non-Financial Information Statement
(NFIS) which is independently verified
by a third-party to limited assurance
standards in line with ISAE3000
(Revised) standards.
IAG’s most material environmental
metric – Scope 1 emissions – receives
additional verification each year as part
of the EU, Swiss and UK Emissions
Trading Schemes (ETS) and the
international Carbon Offsetting and
Reduction Scheme for International
Aviation (CORSIA), within six months of
the issuance of this report. Any material
changes are restated in future reports.
Compliance with specific frameworks
and standards is listed under relevant
section headings and summarised in
section C.8. While IAG does not align
with the Global Reporting Initiative (GRI)
Core or GRI Comprehensive standards, it
aligns with selected GRI standards based
on compliance with Spanish Law 11/2018
and chooses to voluntarily align with
other GRI standards on material issues.
SAF investments Carbon intensity Governance Supply chain
$1 billion 80.5
gCO
2
/pkm
7,500+ 100%
total investment in SAF
asof31 December 2023,
ofwhich 86% is in future
commitments
1
-3.6% vly, and on track
toexceed our 2025 target
of80gCO
2
/pkm
senior executives and
managers with climate-
related annual incentives
of suppliers screened
forsustainability risks
1 Based on an assumed jet fuel price of $800 per metric tonne and contracted margins for SAF production.
Introduction to sustainability
58

is to be a world-leading
airlinegrouponsustainability
is to pursue nine sustainability leadership
KPIsaslisted in section C.1 Principles
ofSustainabilityGovernance
Our material issues and initiatives
IAG takes a holistic approach to sustainability
1
• Reducing our climate impact
• Influencing and shaping policy
• Engaging with employees
• Building a diverse and inclusive
workplace
• Investing in the future
• Planning for climate-resilient operations
• Working with suppliers
A. Planet B. People and prosperity C. Principles of governance
• Environmental sustainability policy • Equity, Diversity and Inclusion (EDI)
policy
• Modern slavery and anti-trafficking
statement
• Code of Conduct
• Supplier Code of Conduct
• Anti-bribery and corruption policy
• Whistleblowing policy
• Policy on disclosure of corporate
information and engagement
withshareholders
Key policies
• Flightpath Net Zero strategy
• Climate-related remuneration
• Policy advocacy for low-carbon
solutions
• Leadership in trade associations
• Organisational Health Index (OHI)
surveys (every six months)
• EDI and engagement initiatives
• Community giving and fundraising
• Developing a social roadmap
• Accelerator programme and ventures
• Supply Chain Sustainability Programme
• Task Force on Climate-related Financial
Disclosures (TCFD) scenario analysis
1 The above pillars align with the World Economic Forum ‘Measuring Stakeholder Capitalism’ report in 2020. ‘Running a profitable business’ and
‘Pleasing our customers’ are material issues relevant to Prosperity which are covered in other sections of the Non-Financial Information Statement.
Board-level oversight IAG Management
Committee oversight
Operating company
oversight
Cross-Group alignment
• Safety, Environment and
Corporate Responsibility
Committee (SECR)
• Audit and Compliance
Committee
• Chief People, Corporate
Affairs and Sustainability
Officer (CPCASO)
• Management committees
oversee tailored sustainability
programmes
• Group sustainability strategy
• Group sustainability
team updates
• Working groups for key
sustainability initiatives
Annual initiatives
Key material issues
Key UN Sustainable Development Goals
Our governance
Our vision Our strategy
• Net zero Scope 1, 2, and 3
emissions across our
fulloperations and
supplychain
• Carbon removals for any
residual emissions
• 11% reduction in carbon
intensity, to 80gCO
2
/pkm
• ‘5 by 2025’ waste targets
• 40% of senior leadership
roles held by women
• 10% SAF use
• 20% drop in net Scope 1
emissions, to 22m tonnes
• 20% drop in net Scope 3
emissions, to 6.6m tonnes
2019
2025
2030
2050
Targets
Target baseline
Sustainability at a glance
59

Towards more sustainable journeys
Our sustainable products and services for customers
helpthemto reduce their carbon emissions and support
widersustainability goals. We continue to trial new offers.
1 All airlines. 2 British Airways. 3 Iberia. 4 Vueling. 5 IAG Cargo.
Pre-flight services at airports Ground transport at airports On-board impacts
• Renewable electricity in lounges
1
• Vegan menus in lounges
2,3
• Pre-ordering meal service to reduce
food waste
3
• Trialling electric buses
forpassengers
2,4
• Electric Mototoks to pull aircraft
torunways
2,3,4
• Trialling electric trucks
5
• Renewable electricity to power
aircraft on the ground
1
• Opportunity for customers to
contribute towards carbon removal
projects
1
• Voluntary SAF for customers
2,4
• Use of SAF supported by IAG
investment
1
• Vegan food
2,3
• Recycling on board
1
First
alcohol-to-jet SAF plant in the world
opens, the LanzaJet Freedom Pines
project, in a signed partnership with IAG
$1 billion
total investment in SAF as of
31 December 2023, of which 86% is in
future commitments
Based on an assumed jet fuel price of
$800 per metric tonne and contracted
margins for SAF production.
A-
CDP rating in 2023, the fourth
consecutive year of achieving a
leadership rating for our climate action
80.5 gCO
2
per passenger kilometre, a 3.6% annual
improvement in carbon intensity, and on
track to achieve our 2025 target
100%
of IAG airline senior executives
have climate-related remuneration
157.1k
tonnes of CO
2
saved from SAF use in
2023, an increase of 418% year-on-year
and representing 0.6% of our annual
emission reductions
Planet highlights
71,794
people employed across the
Group in 77 countries
4
meetings of the Board
SECR Committee
87%
of staff covered by collective
bargaining agreements
3.2+ million
training hours completed in
2023
9%
increase in our workforce
versus 2022
100%
of suppliers screened
for legal and financial risks
36%
of senior leadership roles
held by women
90%
of suppliers, by spend,
completed ESG scorecards
People and prosperity highlights Governance highlights
60

A.1.1. TCFD summary
IAG was an early adopter of the Task Force on Climate-related Financial Disclosures (TCFD) guidance and first carried out
TCFD-aligned scenario analysis in 2018, ahead of the UK requirement – Listing Rule 9.8 – which defines the information to be
included in a company’s annual report and accounts.
Descriptions of TCFD recommendations are on the TCFD website. IAG has applied the TCFD Guidance for All Sectors to the
disclosures in this report. An internal review of compliance with the 11 core TCFD recommendations identified no material gaps or
material changes from last year.
Governance Strategy Risk management Metrics and targets
Disclose the organisation’s
governance around climate-
related risks and
opportunities
(a, b)
Disclose the actual and
potential impacts of climate-
related risks and
opportunities on the
organisation’s businesses,
strategy and financial
planning where such
information is material
(a, b, c)
Disclose how the
organisation identifies,
assesses and manages
climate-related risks
(a, b, c)
Disclose the metrics and
targets used to assess
andmanage relevant
climate-related risks and
opportunities where such
information is material
(a, b, c)
Relevant disclosures in this report
a. See C.2., C.6.
b. See A.1.5., C.2., C.6., Risk
management and principal
risk factors section
a. See A.1.6.
b. See A.1.6., C.6., Risk
management and principal
risk factors section
c. See A.1.5.
a. See A.1.5., A.1.6., C.6., Risk
management and principal
risk factors section
b. See above
c. See above
a. See A.1.3., A.1.5., Report
ofRemuneration Committee
b. See A.1.3., A.1.6.
c. See Sustainability
ataglance, A.1.2., A.1.6.
Current activities
Board oversight via SECR
Committee and Audit and
Compliance Committee;
robust governance;
2021 materiality assessment
will be updated in 2024
Delivering against Flightpath
Net Zero strategy and nine
leadership KPIs;
sustainability-linked loans for
British Airways and Iberia;
TCFD-aligned scenario
analysis; one- and three-year
financial and business plans
integrate sustainability
aspects; new sustainability
contract clause for suppliers
Sustainable aviation risks are
treated as a principal risk and
regularly reviewed within
Enterprise Risk Management
(ERM) processes; risk
disclosures and risk
management processes
received an ‘A’rating from
the Carbon Disclosure Project
Clear metrics and targets for
2025, 2030 and 2050 (see
‘At a glance’); climate-related
remuneration for senior
executives and managers
Planned future activities
Review assurance, double
materiality assessment to be
completed in 2024, process
and control changes to
achieve reasonable assurance
by 2026
Ramp up of SAF
procurement, ongoing
scenario analysis, reviewing
guidance and evidence on
pathways to support
1.5°Ctransition
More detailed work on risk
impacts to 2030 and 2040,
actions to maximise climate
resilience, and risk
mitigationKPIs
Delivery against existing
targets, review 2030 targets
in line with latest evidence
on1.5°C-aligned transitions
A.1. Planet – climate change
Carbon intensity
80.5
gCO
2
/pkm
-3.6% vly
CO
2
saved from SAF use in 2023
157.1k
tonnes
Sustainability continued
61

Sustainable Aviation Fuels (SAF) are chemically almost
identical to kerosene.
The feedstocks for these fuels – currently waste materials such
as municipal waste or waste wood – absorb CO
2
in their growth
cycle before this carbon is recycled into fuel and then emitted
during the flight.
There are eight certified pathways to making SAF based on
useof specific technologies and feedstocks. These processes
are certified tointernational standards to ensure the fuels are
safe to use. SAF can be used in existing aircraft and airport
fuelling infrastructure.
IAG also ensures its SAF complies with strict sustainability
certification schemes, to ensure the feedstocks come from
sustainable sources, and that the production processes
conserve water and energy and have minimal wider impacts.
Leading our industry in SAF projects
1 Based on an assumed jet fuel price of $800 per metric tonne and
contracted margins for SAF production.
SAF is a key solution in IAG’s transition plan to net zero
(Section A.1.2.). It reduces carbon emissions on a greenhouse
gas lifecycle basis, typically by 80% or more compared with the
fossil jet fuels it replaces.
In 2021, the Group set a target of using one million tonnes
ofSAF a year by 2030, dependent on appropriate government
policy support.
As of 31 December 2023, our total investment in SAF reached
$1 billion, of which 86% is future commitments.
1
This is the
largest disclosed commitment to SAF by any airline globally.
In 2023, Group airlines used more than 53,000 tonnes of SAF,
an increase of 417% versus 2022, and one of the highest
volumes globally. Thissaved around 157.1 ktCO
2
, accounting
for0.6% ofemission reductions.
IAG remains on track to deliver a 100-fold increase in its SAF
volumes between 2022 and 2030, and expects to use SAF
for70% of total fuel in 2050.
IAG continues to make direct investments in new and innovative
SAF production capacity, catalysing the wider development of
the SAF market. These investments are typically coupled with
SAF purchase agreements, which are critical to the financial
viability of the new SAF production capacity.
The Group uplifts jet fuel in multiple locations, including the US
andEurope, and therefore is exploring projects in multiple regions.
IAG is working with technology developers to establish a range
ofSAF supply options, including the projects listed in this section.
We aim to be a leader in supporting developed SAF production
pathways that achieve the greatest life-cycle emission reductions
and can accelerate our efforts to decarbonise.
In February 2024, IAG signed its largest-ever SAF purchase
agreement with Twelve, a SAF project based in Washington,
which produces advanced power-to-liquid SAF made from CO
2
,
water and renewable energy. This means we have secured
one-third of the SAF required to meet IAG’s 10% SAF by 2030
target.
For SAF produced from other pathways, the Group is also
working to support projects which remove carbon or capture
and store it.
What is Sustainable Aviation Fuel?
Role in IAG transition plan
Supporting advanced SAF pathways
Delivering on our commitment
62

Advocating for appropriate SAF policy
IAG recognises that policies designed to support the development of SAF globally are currently fragmented and take different
forms. The Group is therefore working closely with policymakers and industry to support the development of appropriate SAF
policies needed to provide a strong investment signal and to scale up supply to meet sector demands.
We welcome the decision made by ICAO and its Member States at the third ICAO Conference on Aviation Alternative Fuels
(CAAF/3), to strive to achieve a global aspirational vision to reduce CO
2
emissions in international aviation by 5% by 2030 through
the use of SAF, low-carbon alternative fuels (LCAF) and other aviation clean energies.
In key markets, such as the US, EU and UK, our policy advocacy has focused in 2023 on the following areas below.
US EU UK
Policy overview
SAF supply is currently incentivised in the
US under state-level programmes, which
offer producers tax credits for their
production. These programmes currently
operate in states such as California, Illinois,
Minnesota, Washington and Oregon.
The Inflation Reduction Act, signed in
August 2022, also provides federal tax
credits for SAF producers (for SAF
dispensed in the US).
IAG 2023 activity
IAG continues to explore and sign
purchase agreements for SAF from
projects in the US which will be eligible
toclaim tax credit incentives. Please
seeour key SAF partnerships table
formore details.
Policy overview
The EU has legislated under its Fit for
55package a new ReFuelEU policy
thatwill set a SAF mandate from 2025.
The mandate will require a minimum
volume of SAF in the EU, starting in 2025
at 2% and reaching 6% by 2030,
with1.2%of the 2030 volume to be met
through use of advanced SAF pathways,
such as Power-to-Liquid (PtL) SAF.
Also within the Fit for 55 package,
theEUhas agreed to amend the Emissions
Trading System (ETS) Directive, and
introduce an incentive for aircraft
operators to increase SAF uplift through
the EU ETS from 2024. This will make
itpossible for aircraft operators to claim
ashare of 20 million allowances set aside
by the European Commission to cover
some of thedifference in the price paid for
SAF compared to jet kerosene, on EU ETS
compliant routes. SAF continues to be
zero-emission rated under the EU ETS,
which also incentivises use by aircraft
operators to reduce annual carbon cost
exposure.
IAG 2023 activity
We support the legislative changes made
by the EU to support the development
ofSAF supply in Europe.
We are now engaging with policymakers
on technical details concerning the
monitoring, reporting and verification
(MRV) of SAF use, alignment of new
legislative requirements with existing EU
ETS reporting frameworks and geographic
scope. We have also responded to public
consultations on the implementation of
these policies in Member States.
Policy overview
The UK has set a SAF target of 10% by
2030, and a target to commence the
construction of five SAF plants by 2025.
In2023, following advocacy efforts by
industry, the UK Government agreed
todevelop a revenue certainty mechanism
for SAF producers, that should be in
forceby 2026.
Under the UK ETS, SAF is zero-emission
rated, but there currently is no incentive
comparable with policy provided under
theEU ETS.
IAG 2023 activity
IAG responded to the UK’s consultation
onits SAF mandate in 2023. We continue
to engage with policymakers on ways
toincentivise SAF use in the UK,
includingthe UK ETS.
As a member of the Jet Zero Council, IAG
has engaged with the UK Government and
supported industry calls for a revenue
certainty mechanism for UK SAF
producers. We continue to engage through
the Jet Zero Council to support the
development of this mechanism as
quicklyas practicable, to accelerate
SAFproduction in the UK.
IAG also engages with Heathrow airport
onits financial incentive scheme to support
SAF uplift.
SAF governance in IAG
SAF is a key solution in IAG’s transition plan to net zero emissions. In 2023, IAG enhanced its governance framework suitable
foraccelerating our engagement with SAF investments and policy. This included establishing a SAF Management Group, comprised
of colleagues from IAG sustainability, Group finance and each operating company. The SAF Management Group reports to the SAF
Steering Group. Please refer to ‘Principles of sustainability governance’ for moreinformation.
Supporting emissions reductions for our customers
IAG offers corporate customers the opportunity to purchase the emission reductions from SAF to support their own Scope 3
emission reductions. In total, Group airlines sold more than 150,000 tonnes of CO
2
to customers last year. IAG also allocated around
150 tonnes CO
2
towards internal activities, including emissions associated with travel to senior leadership conferences.
Sustainability continued
A. Planet
63

Key SAF partnerships
Producer Production location Anticipated supply start Technology
BP Europe; China Supplying since 2021 HEFA
Neste Finland; Singapore Supplying since 2021 HEFA
Phillips 66 Humber, UK Supplying since 2021 HEFA
Repsol Cartagena, Spain Supplying since 2022 HEFA
Cepsa Huelva, Spain Supplying since 2023 HEFA
LanzaJet Georgia, USA 2024 Alcohol-to-jet
Twelve Washington, USA 2025 Power-to-Liquid
LanzaJet/Nova Pangaea
1
North East, UK 2027 Alcohol-to-jet
Aemetis California, USA 2027 HEFA
Gevo Minnesota, USA 2028 Alcohol-to-jet
LanzaTech South Wales, UK 2028 Alcohol-to-jet
Velocys
1
Immingham, UK
Mississippi, USA
2029 Fischer-Tropsch
1
Includes carbon capture and storage.
Project Speedbird – Developing SAF
in the UK
In June 2023, British Airways, LanzaJet
andNova Pangaea Technologies signed
anagreement that will accelerate Project
Speedbird, an initiative created by the
companies in 2021 to develop cost-effective
SAF for commercial use in the UK.
Twelve
In February 2024, IAG signed its largest-ever
SAF purchase agreement with Twelve,
aSAFproject based in Washington which
produces advanced Power-to-Liquid SAF
made fromCO
2
, water and renewable energy.
This means we have secured one third of the
SAF required to meet IAG’s 10% SAF by
2030target.
LanzaJet: Freedom Pines
Supported by investment by British
Airways in 2021, on 24 January 2024,
LanzaJet opened the first production
plant dedicated to low-carbon ethanol
SAF in Georgia, USA.
Key SAF partnerships
64

A.1.2. Transition plan
Overview
IAG is targeting net zero emissions
by2050 across its Scope 1, 2
and3emissions.
‘Net zero’ means any residual emissions
from IAG operations in 2050, or by the
manufacture and transport of goods
supplied to the Group, will be mitigated
by an equivalent amount of CO
2
removed
from the atmosphere via carbon removals.
IAG is on track to deliver its 2025, 2030
and 2050 climate targets (see below)
bycarrying out emission-reduction
initiatives, working in collaboration
withkey stakeholders and proactively
advocating for supportive government
policy and technology development.
IAG is also driving internal action by
using climate-related annual incentives
for over 7,500 senior executives
andmanagers.
Key measures to reduce emissions are
fleet modernisation, SAF usage, market-
based measures, including the UK and
EU ETS and CORSIA, and carbon
removals.
Less than 10% of the emissions
reductions between 2019 and 2050
areexpected to come from offsets.
Roadmap to net zero
IAG was the first airline group in the world
to commit to net zero emissions, and has
been publishing updates to its roadmap
tothis goal every year since 2019.
2050204520402035203020252015 2020
Demand growth
New aircraft and operations
ETS/CORSIA and offsets
SAF
Carbon removals
IAG net zero target
2019 baseline emissions
Percentage CO
2
reductions
(SAF is 70% of fuel in 2050)
41%41%
42%42%
17%17%
Gross emissions
Net emissions
IAG interim targets: 11% improvement in fuel efficiency 2019-2025, 20% drop in net Scope 1 and 3 emissions 2019-30, 10% SAF in 2030, net zero by 2050.
8
31
27
Pillar of carbon roadmap Delivery plans Venture investments/key innovation partners
New aircraft
and operations
• €12 billion investment between 2024 and 2028
for 178 new, efficient aircraft
ZeroAvia (hydrogen aircraft manufacturer)
I6 (fuel management software)
NAVflight services (flight planning services)
Honeywell Forge (fuel efficiency software)
SAF
• As of 31 December 2023, our total investment in SAF
reached $1 billion, of which 86% is future commitments,
based on assumed energy prices
LanzaJet (sustainable fuels producer)
Nova Pangaea
Carbon removals • Refining the IAG carbon removals roadmap, and
supporting the inclusion of carbon removals in the global
CORSIA scheme, and UK and EU ETS
Heirloom (carbon capture start-up)
CUR8 (carbon removal platform)
Market-based
measures and offsets
• Support for the global CORSIA scheme to limit
netemissions from aviation
• Continue advocacy to strengthen CORSIA
CHOOOSE (customer offsetting platform)
Supply chain • 90% of suppliers by spend have submitted scorecards
onESG performance
• Supplier contract clause on sustainability
EcoVadis (business sustainability ratings)
Watershed (emissions reporting platform)
Latest IAG roadmap to net zero
million tonnes CO
2
(MT)
The version below is a core Group
scenario which assumes continued
policy support for aviation
decarbonisation, an overall recovery
to2019 levels of passenger demand
by2024 and annual demand growth
aligned with the long-term growth
forecasts disclosed in notes 4 and 17 of
the financial statements.
Changes to our roadmap in 2023 focus
on increasing the use of SAF in our
operations in the short term, and our
investment in carbon removals before
2030. Beyond 2030, it maintains an
assumption that hydrogen aircraft will
be introduced tothefleet from 2040,
and a 5% emissions saving from airspace
modernisation will be achieved by 2050.
Sustainability continued
A. Planet
65

Future carbon intensity
Delivery of IAG’s current decarbonisation
plans, dependent on appropriate policy
support, is expected to enable the
following changes versus 2019:
Gross carbon emissions (MT CO
2
):
• 2030 – 15% lower
• 2050 – 73% lower
Gross carbon intensity (gCO
2
/pkm):
• 2025 – 12% lower
• 2030 – 27% lower
• 2035 – 39% lower
• 2050 – 83% lower
Carbon removal solutions extract CO
2
already in the
atmosphere and store itinbiological or geological ways.
Examples of carbon removal include:
• Nature-Based Solutions (NBS) –include creating new forests
andpeatland;
• BioEnergy Carbon Capture and Storage (BECCS) – capturing
biogenic carbon from industrial facilities and storing it in, e.g.
underground aquifers;
• Carbon Capture and Storage (CCS) with SAF production – as
above and including the use of byproducts which can absorb
CO
2
; and
• Direct Air Capture (DAC) – absorbingCO
2
directly from the
air using acatalyst.
IAG sees carbon avoidance projects asakey transitional
solution en route tofull use of removals. Carbon removal
projects differ from carbon avoidance projects, which prevent
the future release of CO
2
.
IAG expects to use carbon removals tomeet an increasing share
of its CORSIA obligations between 2024 and 2035, conditional on
appropriate policy, and supports wider guidance on how
totransition to removals such as the Oxford Offsetting Principles.
The Group continues to advocate forpolicies that will accelerate
global uptake of carbon removals, via the Coalition for Negative
Emissions and other trade associations listed in A.1.7., and
supports the inclusion of removals in the EU, Swiss and UK ETS.
Group airlines have offered customers the opportunity to make
a financial contribution to support carbon removals projects
since 2022. British Airways customers have supported removals
projects including mangrove restoration in Pakistan and a
biochar project in Oregon, USA.
By 2050, IAG will only use carbon removals to mitigate any
residual emissions from its operations.
IAG will only work with suppliers who do the same, as part of
meeting the Group’s Scope 3 commitment. IAG is already
encouraging suppliers to transition from offsets to removals as
part of a new supplier contract clause which is being rolled out
across its supply chain.
IAG is committed to supporting a variety of innovative carbon
removals solutions and is considering projects that are
immediately available and independently verified today, as well
as more innovative technology solutions.
Ourinvestment in Greenhouse Gas Removal (GGR) technologies
involves a combination of forward delivery procurement and
project financial support, facilitating the scale-up ofGGR
technologies alongside relevant government support.
When IAG or its operating companies choose to voluntarily
invest in carbon avoidance and removal projects, they work in
collaboration with key partners, carry out due diligence to
select reputable providers and select projects carefully to meet
and align with verifiedquality standards, such as GoldStandard,
Puro Standard and Verified Carbon Standard (VCS).
In 2023, British Airways worked in partnership with CUR8 (a
UK-based company dedicated to building the global market for
carbon removals), UNDO (a world-leading carbon dioxide
removal project developer specialising in enhanced rock
weathering), and Standard Chartered, representing financial
institutions, to launch a first-of-a-kind financing pilot designed
to help scale-up the carbon removals market.
The pilot aims to support the scale-up of the carbon removals
market by creating a blueprint to enable carbon removal
suppliers to access capital in the form of debt financing via
advanced purchase agreements. British Airways has committed
to purchase more than 4,000 tonnes of carbon removal credits
delivered by UNDO through enhanced rock weathering, and
Standard Chartered is looking to be the banking partner.
Carbon removals
Introduction Advocacy for carbon removal policy
Role in IAG transition plan
Investing in carbon removals
IAG supports the inclusion of carbon
removals in industry decarbonisation
pathways, and in external assessments
of support for the 1.5°C global ambition.
IAG’s short- and long-term targets have
been independently assessed by the
Transition Pathway Initiative (TPI)
as1.5°C-aligned and its mid-term target
assessed as well-below-2°C-aligned. The
TPI assessment compared the
milestones in the 2021 IAG roadmap
withan industry-wide pathway modelled
bythe International Energy Agency
(IEA), taking removals commitments
into account.
IAG began investing in ZeroAvia in
2020, a leading developer of
hydrogen-electric, zero-emission
aviation. IAG increased its
investment in 2022, to advance
ZeroAvia's 2-5 MW hydrogen-
electric powertrain development
programme.
66

205020452040203520302020 2025
CCS with SAF production
DAC
BECCS
8
Total
NBS
Blue Carbon Mangrove project
The Blue Carbon Mangrove project in the
Indus Delta area in Pakistan is a nature-based
carbon removal project (where plants absorb
carbon from the atmosphere through
photosynthesis). The project will support
greenhouse gasremoval by reforestation
andrevegetation of approximately
225,000hectares of degraded tidal wetlands
with mangrove and other species to absorb
carbon dioxide, stabilise the area andprotect
the coastal area andcommunities.
Freres Biochar project
The Freres Biochar project in Oregon, USA,
involves a biomass power production plant that
produces biochar, a carbon-rich, charcoal-like
material that is created when agricultural and
wood waste is used as fuel. The process feeds
carbon into the soil and prevents it from
naturally decaying, locking carbon away and
keeping it out of the atmosphere for several
hundred years.
Key carbon removal projects
Carbon removals within our 2050 roadmap
MT CO
2
Based on the latest roadmap, the Group expects to use approximately 100 MT of carbon removals between 2022 and 2050
tomitigate Scope 1 emissions and could potentially be removing 2 MT annually in 2030, conditional on clear and globally
agreedverification and quality standards for removals, inclusion of removals in ETS schemes, and stable policy support.
Sustainability continued
A. Planet
67

A.1.3. Metrics and progress
Overview
IAG’s transition plan focuses on reducing
CO
2
from jet fuel use, as this represents
over 99% of Scope 1 emissions.
TheGroup measures its full carbon
footprint and tracks multiple metrics
each quarter to ensure progress
ontackling climate change.
2023 saw strong progress against
thekey metric of carbon efficiency.
With a 3.6% annual improvement to 80.5
gCO
2
/pkm, the Group is on track to
deliver our carbon efficiency target of
80.0 gCO
2
/pkm by 2025, accounting
foremissions reductions achieved
fromSAF.
Scope 1
Scope 2
Scope 3
Total
32,212,000
100%
Scope 2
12,000
0.04%
Scope 3
6,526,000
20.26%
Scope 1
25,674,000
79.70%
Total
6,526,000
100%
Fuel and
energy-related
activities
83%
Capital goods
2%
Franchises
7%
All other Scope 3
categories
8%
Calculation methodology
Emissions are calculated by multiplying
fuel and energy use by appropriate
conversion factors that are aligned
withthe Intergovernmental Panel on
Climate Change (IPCC) Fourth
Assessment Report. 2023 UK
Government conversion factors are
applied across the Group as these are
deemed to be the most robust available.
Other factors such as International
Energy Agency emissions factors are
used in specific cases as described in the
IAG statement of non-financial
information.
2023 emissions (tonnes CO
2
e)
1,2
Scope 3 emissions (tonnes CO
2
e)
1,2
Scope 1
Scope 2
Scope 3
Scope 2
20,000
0.05%
Scope 3
8,265,000
21.18%
Scope 1
30,744,000
78.77%
Total
39,029,000
100%
2019 emissions (tonnes CO
2
e)
1
Our carbon intensity calculation includes
CO
2
emission reductions achieved from
SAF. SAF reductions arecalculated
using actual life cycle analysis (LCA)
carbon intensity values for SAF fuel
uplifted by airlines in the Group, and
subtracting the achieved emission
reductions from our total CO
2
footprint.
IAG discloses methane (CH
4
) and nitrous
oxide (N
2
O) as Scope 1 non-CO
2
greenhouse gases (GHGs), in line
withthe UK conversion factors.
In 2023, emissions of CH
4
were 18,009
tonnes and N
2
O were 216,542 tonnes.
A detailed Scope 3 emissions
breakdown is available in the IAG
statement of non-financial information.
1 Rounded to the nearest '000 tonnes CO
2
e.
2 Please refer to details in this section regarding Scope 3 emissions data
collection. Data for Scope 3 emissions reported using existing
methodology, and does not include revised values for Scope 3.1
emissions as identified following a proof-of-concept trial between IAG
GBS and Watershed in 2023.
68

Key emission metrics
Key carbon footprint metric GRI standard Unit vly v2019 2023 2022 2021 2020 2019
Scope 1 CO
2
e 305-1 MT CO
2
e 22% (16%) 25.67 21.13* 10.92 11.02 30.74*
Net Scope 1 CO
2
e MT CO
2
e 19% (15%) 22.82 19.10* 10.50 10.85 26.95*
Scope 2 location-based 305-2 kt CO
2
e 11% (24%) 56.5 51.1 39.2 48.2 74.6*
Scope 2 market-based 305-2 kt CO
2
e 6% (37%) 12.4 11.7 8.4 9.3 19.7*
Scope 3
1
305-3 MT CO
2
e 19% (21%) 6.53 5.48 3.32 3.66* 8.27*
Key emission reduction metric GRI standard Unit vly v2019 2023 2022 2021 2020 2019
Flight-only carbon intensity
(exclusive of SAF CO
2
reductions)
2
305-4 gCO
2
/pkm (3%) (10%) 81.0 83.6 94.5 106.2 89.8
Flight-only carbon intensity
(inclusive of SAF CO
2
reductions)
2
305-4 gCO
2
/pkm (4%) (10%) 80.5 83.5 94.5 106.2 89.8
GHG reduction initiatives 305-5 ktCO
2
e 5% 12% 86.7 82.4 59.7 17.2 77.4
Emissions covered by ETS
(UK, EU, Swiss) MT CO
2
e (1%) (26%) 5.68 5.74 2.71 2.32 7.66
Net reduction (SAF uplift) ktCO
2
418% n/a 157.1 30.3 6.5 n/a n/a
Net reduction (ETS
3
) ktCO
2
e 45% (18%) 2,604 1,796 219 0 3,182
Net reduction (offset projects) ktCO
2
e 17% n/a 246 229 196* 168 n/a
Average fleet age years >1% 6% 12.0 11.9 11.2 10.6 11.4
Other metric GRI standard Unit vly v2019 2023 2022 2021 2020 2019
Scope 2 carbon intensity 305-4 gCO
2
/pkm (12%) (19%) 0.18 0.20 0.34 0.47 0.22*
Revenue per tonne CO
2
e €/tonne CO
2
e 5% 38% 1,145 1,088 771 705 827
Jet fuel 301-1 MT fuel 22% (16%) 8.11 6.64 3.42 3.45 9.65
SAF kt fuel 417% n/a 53.3 10.3 2.4 nr nr
Electricity 302-1 ‘000 MWh 1% (19%) 217.0 213.7 189.0 200.1 267.7
Energy 302-1 Mn MWh 24% (15%) 100.7 81.5 42.1 41.9 119.7
Renewable electricity
4
% 0pts 9pts 81% 81% 86% 86% 72%
Renewable energy % 0.5pts 0.7pts 0.9% 0.4% 0.5% 0.4% 0.2%
Descriptions and commentary on other metrics are available in the Additional Disclosures section of the IAG statement of non-financial information.
Note: ‘nr’ means ‘not reported’. * means restated using the latest data and assumptions.
1 Please refer to details below regarding Scope 3 emissions data collection. Data for Scope 3 emissions reported using existing methodology,
anddoesnot include revised values for Scope 3.1 emissions as identified following a proof-of-concept trial between IAG GBS and Watershed in 2023.
2 pkm means ‘passenger-km’. The passenger-km used for this calculation is 273,607 million, which excludes no-show passengers. The cargo-tonne-km
used is 4,386 million, which excludes cargo carried on other airlines or trucks. The jet fuel used excludes fuel for franchises and engine testing.
3 2020 emissions were below the EU ETS sector cap for aviation so no net reductions were delivered.
4 For completeness, Scope 2 emissions cover electricity use at airports and overseas offices, which are partly outside IAG’s operational control.
As part of complying with the UK Streamlined Energy and Carbon Reporting regulation, 58% of Group energy use was UK energy use, based onScope
1 emissions and Group electricity use in UK-based offices, up from 56% in 2022.
Scope 3 emissions calculations
IAG Scope 3 emissions accounted for approximately 20% of total emissions in 2023. Our target is to achieve a 20% drop in net
Scope 3 emissions compared to the 2019 baseline, from 8.3 MT to6.6 MTby 2030. In 2023 IAG Scope 3 emissions were 6.5 million
tonnes CO
2
e.
IAG GBS operates a supply chain sustainability programme which includes ESG scorecards and supplier risk screening.
In 2023, IAGGBS ran a proof-of-concept trial with Watershed to improve Scope 3.1 emissions reporting across the Group. In
previous measurements, IAG reported Scope 3.1 emissions based on emissions calculated from water usage only. Under the trial with
Watershed, a spend-based methodology for Scope 3.1 emissions was applied, combining IAG GBS supply chain spend data with
Watershed’s emissions database. This improved reporting accuracy as emissions factors could be associated with the location and
business activities of each supplier, including supplier-specific emission factors for those with CDP disclosures. The results of this trial
are provided alongside previous emissions data captured in our Scope 3 emissions submission.
IAG is expanding this research across ourScope 3 activities in 2024, to improve our data collection across all Scope 3 emission categories.
Sustainability continued
A. Planet
69

Other metric
GRI
standard Unit
% of Scope
3 emissions v2019 2023 2022 2021 2020 2019
Fuel and energy-related
activities (Scope 3.3) 305-3 tCO
2
e 83% (15%) 5,424,914 4,399,985* 2,266,587* 2,284,992 6,371,621
Franchises (Scope 3.14) 305-3 tCO
2
e 7% (44%) 449,848 475,576 369,718 235,167 810,334
Capital goods (Scope 3.2) 305-3 tCO
2
e 2% (77%) 128,000 232,000 424,000 912,000 568,000
Purchased goods/
services (Scope 3.1) 305-3 tCO
2
e >1% (70%) 204 268 229 525 689
(Scope 3.1 emissions data
following Watershed
proof-of-concept trial) (2,762,833) (2,028,326) (1,172,771) (1,398,858) (2,731,217)
All other Scope 3
categories 305-3 tCO
2
e 8% 2% 523,501 387,579 264,457* 227,033 514,618
Total Scope 3 emissions 305-3 tCO
2
e N/A (21%) 6,526,467 5,495,408* 3,324,992 3,659,717 8,265,262
Descriptions and commentary on other Scope 3 category metrics are available in the Additional Disclosures section of the IAG statement of non
financial information.
Note: Data from Watershed trial is not included in Total Scope 3 emissions. * means restated using the latest data and assumptions.
Carbon footprint calculation methodologies
The Group’s airlines offer passengers the ability to calculate their emissions footprint associated with their flights. This emissions
footprint is estimated using a carbon calculator, which determines a volume of CO
2
emissions that an aircraft emits per passenger
over a defined flight route and cabin.
Additionally, some airlines offer customers the opportunity to offset or mitigate part of their emissions through investing in carbon
removals projects and/or SAF.
IAG continues to develop the carbon calculation methodology that underpins our passenger emission calculators used by the Group,
and advocates for an industry-wide standard that provides transparency and simplicity for customers.
Key developments in 2023 include:
• Aer Lingus continues its partnership with charity Pure Leapfrog to help passengers contribute towards mitigating some of the
emissions generated from their flights;
• British Airways continues to collaborate with the CHOOOSE platform that enables customers to understand their flight emissions
and take steps to address their climate impact before or after their journey, or directly from their seat on board. This includes
carbon removals from the ‘case study’ projects listed in section A.1.2.;
• Iberia has certified its carbon footprint calculator methodology with AENOR (third-party verification entity); and
• Vueling offers its customers the opportunity to make a contribution to the supply of SAF. Vueling matches its customers’
contributions, doubling the amount of SAF supplied. Almost 197,000 passengers have contributed 246 tonnes of SAF purchased
since the initiative started in 2022. Passengers can also mitigate flight emissions by contributing towards the purchase of carbon
removals though the collaboration with CHOOOSE.
Non-CO
2
effects
IAG is supporting the ongoing research and development of mitigations for the non-CO
2
effects of aviation. This includes
participating in the UK Jet Zero Council’s non-CO
2
working group, and supporting research by the Rocky Mountain Institute (RMI).
The Group’s airlines already participate in several non-CO
2
research projects.
• British Airways and Iberia are collaborating with Breakthrough Energy to identify which of our flights’ trajectories pass through
Ice Super-Saturated Regions (ISSR) and may contribute to non-CO
2
climate effects;
• Iberia participates in the IAGOS* project, which combines the knowledge of scientific institutions with the civil aviation
operations to obtain essential data on atmosphere and air quality conditions for the subsequent development of more accurate
climate models. New IAGOS equipment has been installed in an Airbus A330-200 which mainly operates routes across the
Atlantic, providing atmospheric data from a valuable climate region;
• Vueling completed several trials with SATAVIA** that aimed to reduce the creation of contrails and measure the improvements
from adjustments made in-flight; and
• Group airlines are also preparing to monitor, report and verify non-CO
2
emissions for their future obligations under the EU ETS
from 2025.
IAG advocates for further scientific research to support effective policy-making that can deliver true emission reductions.
* IAGOS - In-service Aircraft For a Global Observing System
** SATAAVIA - Company supporting airline control management
70

A.1.4. Emissions reduction initiatives
Relevant standards: TR-AL-110a2. GRI 305-5.
Reducing gross and net emissions is a collective effort across the Group. Examples are provided throughout this report.
By 2030, fleet renewal and SAF programmes will have the biggest impact on reducing gross emissions, and CORSIA will have the
biggest impact on reducing net emissions. In addition, other specific initiatives are run within operating airlines.
Our savings from key initiatives in 2023, rounded to the nearest 1,000 tonnes, are shown in the table below. See section ‘Leading our
industry in SAF projects’ for more details on our emission reductions:
Fleet efficiency SAF Operational efficiency Carbon markets Supply chain
€12 billion 157,000 86,000 2.6m 38
investment between
2024 and 2028 for 178
new, more efficient
aircraft
tonnes of CO
2
saved
from SAF used this
year, representing 0.6%
of our total annual
emission
tonnes of CO
2
e saved
from operational
efficiency initiatives such
as reduced use of
landing flaps, single-
engine taxi-in and
reduced weight
on-board
net tonnes of CO
2
e
reduced through
participation in carbon
pricing mechanisms
including the EU ETS,
UK ETS and Swiss ETS
supply chain audits
were completed in
2023
Examples of emission reduction initiatives across the Group:
Operating company 2023 examples Initiative type
Aer Lingus Aer Lingus took its first new Airbus A320 aircraft delivery flight with 50% Sustainable Aviation
Fuel onboard. 2023 also saw Aer Lingus procure SAF for the first time at London Heathrow as
part of the Group deal with Phillips 66.
Fleet
efficiency and
SAF
More efficient alternate routings. This change means that one-third of Aer Lingus flights can
carry 160kg less fuel, reducing daily CO
2
emissions by 3.2 tonnes.
Operational
efficiency
British Airways British Airways was the first airline in the world to use SAF produced on a commercial scale in
the UK after signing a multi-year agreement with Phillips 66.
SAF
British Airways took delivery of 10 new aircraft into the fleet, whilst retiring some of its older
aircraft, which continues to help increase CO
2
efficiency.
Fleet
efficiency
Sustainability is now integrated into annual pilot simulator checks with training rolled out across
all fleets and a sustainability update issued to all flight crew.
Operational
efficiency
IAG Cargo IAG Cargo allows customers to purchase Scope 3 emission reductions from SAF production to
support their own emissions reductions. In 2023, customers including Bolloré Logistics, DB
Schenker, DHL Global Forwarding and Kuehne + Nagel engaged with this programme.
SAF and
Supply Chain
IAG Cargo delivered trials including a lease of 40 tractor units running on Hydrogenated Vegetable
Oil (HVO) biofuel, and an electric tractor.
Operational
efficiency
IAG GBS IAG GBS operated a proof-of-concept trial with Watershed, a digital automated solution for
carbon calculation measurement and sustainability accounting, to improve reporting of its
Scope 3, category 1 (purchased goods andservices) emissions footprint. See Section A.1.3.
formore details.
Supply chain
IAG GBS continues to partner with other companies through the ‘Business vs Smog’ programme
to leverage its resources to help the fight against climate change. During the five years that GBS
has been involved, programme volunteers have run 2,000 free workshops for 45,000
participants in 150 towns.
Supply chain
IAG Loyalty British Airways Executive Club members can use their Avios to contribute towards the purchase
of SAF onshort-haul flights via the High Life Café.
SAF
IAG Tech Migration of IT services to Amazon cloud servers, saving energy and reducing CO
2
. Supply chain
Iberia Iberia continues to deliver efficiency initiatives across the whole flight phase including take-off,
cruise, approachand landing.
Operational
efficiency
Iberia welcomed six new Airbus A350-900, which increase CO
2
efficiency and reduce carbon
emissions byaround 65,000 tCO
2
e compared to 2022.
Fleet
efficiency
Vueling Vueling took delivery of four Airbus A321neos, increasing carbon efficiency by 20% by saving
fuel and having ahigher passenger capacity than the aircraft they replace.
Fleet
efficiency
Vueling is working with EUROCONTROL and ENAIRE to define a new KPI that measures the
airspace efficiency according toCO
2
emissions instead of distance flown. This will support
changes within European airspace and promote optimal trajectories that reduce CO
2
emissions.
Operational
efficiency
Vueling was the first European LCC to partner with WheelTug, to accelerate the development of
its device that will allow minimising engine use on the ground, reducing emissions and noise.
Operational
efficiency
Sustainability continued
A. Planet
71

Fuel efficiency programme
As part of the IAG sustainability
commitment, each Group airline has
afuel efficiency programme which
supports flight planning and enables
pilots to increase fuel efficiency.
Bestpractices are shared across the
Group toleverage synergies and further
increase fuel efficiency.
2023 examples include:
• British Airways and Vueling deployed
NAVlink Wind Updates services in
their A320 fleets. NAVlink provides
optimised in-flight wind data updates,
allowing pilots to plan a more efficient
descent trajectory. NAVlink has
proven to reduce around 22kg of CO
2
emissions per descent. This
partnership was developed with the
support of Hangar 51 – IAG’s
innovation team;
• Group airlines collaborated with
Honeywell for the use of its Forge
software. This software uses in-flight
data to improve flight planning and
increase fuel efficiency; and
• Vueling has implemented the ‘Pilot
App’ which provides transparent data
on individual pilots' contribution
towards sustainability goals. This app
tracks the CO
2
emissions saved during
each flight, enhancing decision-
making in their day-to-day duties.
A.1.5. Scenario analysis
Overview
In 2023, IAG carried out multiple
andaligned forms of scenario analysis:
• the IAG Sustainability team and the
Enterprise Risk Management (ERM)
team reviewed all climate-related
risksand opportunities and potential
impacts to 2026 and 2030.
Theimpacts of material risks are
quantified as part of the Company-
wide ERM process which receives
Board oversight;
• operating airlines modelled
compliance-related costs, including
from the UK and EU ETS and CORSIA,
to 2050;
• TCFD-aligned scenario analysis was
repeated using a dual timeframe
of2030 and 2050; and
• ongoing analysis was carried out
onthe Flightpath Net Zero strategy
to2050.
This scenario work informs strategy,
planning, risk management and financial
management.
IAG takes a proactive approach to
managing climate-related risks and
opportunities, and is committed to
managing their regulatory, reputational,
financial, market and technology aspects.
Applying carbon prices
IAG concurrently applies carbon prices
to financial planning and to future
scenario analysis.
The Fleet team uses updated carbon
prices and price forecasts for short-haul
and long-haul fleet purchasing decisions,
based on market values and reputable
external sources. The Group airlines use
carbon prices in financial planning, and
flight operations teams and pilots use
carbon prices in operational decisions
about fuel uptake.
Potential acquisitions include an
assessment of exposure to climate-
related issues and policy.
For the period 2024 to 2033, UK ETS
prices of £55 – £89/tonne, EU ETS
prices of €84 – €124/tonne and CORSIA
prices of $11 – $25/tonne were used for
modelling compliance costs.
EU and UK ETS prices are based on
market prices and the UK Department
forTransport (DfT) Aviation Forecast,
andCORSIA prices are based on internal
analysis and ICAO industry price forecasts.
TCFD-aligned scenario analysis
Since 2018 IAG has been incorporating
the TCFD recommended guidance on
climate risk disclosures. In 2023, IAG
repeated a TCFD-aligned scenario
analysis exercise, building on previous
years’ exercises.
This was a structured, qualitative
discussion of potential climate-related
impacts and business responses, using
the latest evidence and analysis from
reputable sources like the UN,
EUROCONTROL and Climate Action
Tracker (CAT). IAG conducted its 2023
analysis in line with the latest TCFD
guidance update published in 2021.
Temperature scenarios of 1.5°C
1
were
chosen for transitional risks, in
recognition of IAG and global targets.
The 2°C and 3°C warming scenarios
were chosen for physical risks, based on
the latest UN projections.
The year 2030 was chosen as the key
timeframe, based on IAG targets and
key policy timelines, e.g. for SAF
mandates. The year 2040 was also
considered due to the possibility of the
world overshooting 1.5°C in the 2030s
leading to faster societal changes.
IAG exercises involved representatives
from multiple teams including Strategy,
Treasury, Finance, Government Affairs,
Commercial Planning, Investor Relations,
People, Enterprise Risk Management,
IAG Tech, IAG GBS, IAG Loyalty and
sustainability representatives from
alloperating airlines. The Group
Sustainability team collated inputs,
which were reviewed by the IAG
Sustainability Steering Group and the
Safety, Environment and Corporate
Responsibility (SECR) Committee.
The Group remains resilient to the most
material climate-related impacts –
industry-wide policy shifts – and these
have been quantified and mitigation
plans embedded into financial and
strategic planning. Industry-wide
changes also create opportunities for
the Group to become more resilient than
its competitors.
To address significant uncertainty
around future policy, technology and
market trends, IAG is repeating this
scenario analysis annually. We will keep
implementing action plans in coming
years to further improve resilience
towider changes.
1 ‘Orderly’ and ‘Disorderly’ scenarios were chosen as per TCFD definitions. These scenarios
compare smooth, predictable and idealised climate-related changes with abrupt, variable and
disjointed changes across regions.
72

TCFD
risk type Risk and/or opportunity combined description
Risk time
frame Risk trend
1
Scenario
dependency
2
Physical Resilience to acute weather events M Stable Temperature
Resilience of routes and assets to chronic climate changes L Stable Temperature
Market Customer spend due to perceptions of ESG progress in IAG or the
aviation sector
S Down Transition
Perceived quality of offset and removal projects M Up Transition
Supply chain readiness L Stable Transition
SAF delivery against committed offtake agreement volumes M Up Transition
Policy Litigation against claimed carbon reductions from offsetting S Up Transition
Demand impact of EU and UK climate policy L Stable Transition
Resilience to changes in ETS/CORSIA pricing M Up Transition
Policy asymmetry across regions M Up Transition
Extra regulation on activity rather than emissions L Stable Transition
Lack of supporting SAF infrastructure or policy M Down Transition
Regulation on non-CO
2
effects M Up Transition
Technology Access to and readiness for lower-emission technologies L Stable Transition
Access to SAF supply M Down Transition
Key: short-term (S) is 1-3 years, medium-term (M) is up to 5 years, long-term (L) is more than 5 years.
IAG continues to analyse risk and transition scenarios to inform mitigation plans to 2030. Key parameters for defining scenarios are
below, based on UN, Climate Action Tracker (CAT), UK Climate Change Committee and internal analysis. These are kept under
review.
Physical risk parameters Current projection 2°C scenario 3°C scenario
Global scenario to 2100 2.4°C RCP
3
2.6 RCP 4.5
Transition risk parameters – 2030 Current policies/projections Current targets 1.5°C-aligned scenario
Global emissions vs 2019 0% -7% -41% (-27%)
4
UK emissions vs 2019 -28% -42% -42%
EU emissions vs 1990 -55% (via Fit for 55) -55% -62%
US emissions vs 2005 -37% -50% -58%
Aviation (net) emissions vs 2019 -15% (via CORSIA) -15% -15%
1 Risks might be increasing (up), decreasing (down) or stabilising from a business perspective. IAG calculates this based on central strategy modelling
and economic forecasting, and the risk trend shown is based on an end-of-year assessment, relative to in-year review.
2 Whether the cost impacts depend more on the temperature scenario (2°C or 3°C), or type of transition (Orderly or Disorderly).
3 Representative Concentration Pathway (RCP), a globally recognised scenario for physical changes under different temperature ranges.
4 A 41% drop by 2030 represents an Orderly transition. A 27% drop represents a Disorderly transition because smaller global emissions reductions
to2030 require rapid decarbonisation after 2030 to return to 1.5°C by 2100.
A.1.6. Risks and opportunities
Climate-related risks are assessed and
managed within the ERM framework as
described in Section C.6. and in the Risk
management and principal risks factors
section under the principal risk
‘Sustainable aviation’. Opportunities are
managed within relevant teams.
Transitional risks primarily affect airline
activity between European destinations,
which contributed to 34% of flying
activity in 2023. Physical risks could
affect IAG operations across its global
network, reflecting the global nature of
climate change.
IAG considers the relevant risk factors
that could impact each risk by region
and timescale. Such variability may arise
from fragmented policy definition, scope
and implementation, changeable market
perceptions, or unpredictable delivery of
new technology (among other causes).
IAG considers its mitigation strategy for
each risk accordingly. Please refer to the
‘Risk impacts and mitigation’ table for
more information.
The carbon-reduction targets in the
Flightpath Net Zero strategy are the key
measures for assessing the mitigation of
these risks, along with the consideration
of these risks in relevant governance
processes. The external risk
environment, materiality of risks,
mitigation actions and KPIs for these
mitigating actions are reviewed
regularly.
The table below lists risks assessed
through the ERM process. The most
material risks are policy risks. Risk
timeframes align withcorporate
planning timelines.
Sustainability continued
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73

Risk impacts and mitigation
Description as per previous page Potential unmitigated financial impacts How IAG is mitigating
Physical
Resilience to acute
weatherevents
Days of lost revenue due to additional
flightdisruption and associated mitigation
andpassenger compensation costs
Existing operational resilience processes
canminimise extra disruption (for example
frommoreturbulence from US-UK flights)
Resilience of routes and
assets to chronic climate
changes
Changed revenue from a different route network
ora different frequency of flights to climate-
affected destinations, changes in operational
maintenance costs
Scale of route network means impacts above
plan are not material so no immediate action
needed. Aircraft are mobile assets which can be
moved to different locations to account fore.g.
more hurricanes in the Caribbean
Market
Customer spend due to
perceptions of ESG progress
in IAG or the aviation sector
Customers change frequency of flying, duration
oftrips, or spend less relative to other carriers
orother travel modes
Delivering emissions reductions, developing
emissions dashboards for customers,
expanding customer communications, support
for global instruments like CORSIA, working via
trade associations to advance solutions
Perceived quality of offset
and removal projects
Exposure to sudden variability in prices, cost of
CORSIA credits, scale of growth in costs by 2050
due to available volume of removals to deliver
netzero
Strategy to avoid price spikes, governance
toensure offset quality, a removals roadmap
based on external evidence, advocacy
forpolicy support and monitoring regimes
Supply chain readiness Sustainability compliance or technology change
causing unplanned changes in cost of goods and
services provided to IAG or associated supplier
management costs, margin erosion
Supply chain sustainability programme
whichincludes ESG scorecards and supplier
risk screening
SAF delivery against
committed offtake
agreements
SAF delivery from agreed commitments fail to
materialise from weak market supply or failed
project development, exposing IAG to market
priced SAF, buyout penalties or carbon costs
Securing SAF deals and taking equity in
early-stage projects where relevant. Monitoring
SAF project development and seeking volume
above target levels
Policy
Litigation against claimed
carbon reductions from
offsetting
Litigation for use of credits towards voluntary or
compliance offsetting that do not deliver claimed
emission reductions leads to legal cost
Due diligence conducted on carbon offsetting
projects, internal guidance prepared for
external communications
Demand impact of EU
andUKclimate policy
Pass-through of industry-wide costs affects ticket
prices and, therefore, demand
Impacts of emerging policy assessed as part
oflonger-term financial planning and strategy
Resilience to changes in
CORSIA/ETS pricing
Exposure to long-term price increases affects
compliance costs
Strategy to reduce impact of price spikes; using
carbon prices in fleet and financial planning
Policy asymmetry across
regions
Changing numbers of customers relative to other
carriers who are under more favourable or more
restrictive policy regimes
Advocacy for global solutions such as the ICAO
Long-Term Aspirational Goal agreed in 2022
Extra regulation on activity
rather thanemissions
Industry-wide taxes or levies increase operating
costs and have potential demand impacts; demand
management measures equate to lost revenue.
Noise restrictions are not included in this risk but
are reviewed as a separate risk through the ERM
framework
Advocacy in support of emissions-reducing
measures like SAF and against economically
inefficient measures like taxes
Lack of supporting SAF
infrastructure or policy
Higher prices of SAF in core markets due to lack of
investment in SAF production or cost of inputs
Advocacy for SAF policy, e.g. via UK Jet Zero
Council, and a strategy to procure SAF in
regions where supportive policy exists
Regulation on non-CO
2
effects
Potential multiplier on ETS costs, lost revenue due
to route restrictions, or operational costs due to
non-CO
2
management
External research suggests just 10% of flights
could account for 80% of impacts. Advocacy
via trade associations to support monitoring
and targeted solutions such as route
optimisation and SAF uptake
Technology
Access to and readiness for
lower-emission technologies
Higher ETS costs if technology access is restricted
or technology development is slow
Hangar 51 Ventures team aligns research and
work with the Flightpath Net Zero strategy
Access to SAF Changing unit prices of SAF in core markets Securing SAF deals and taking equity in early
stage projects where relevant
Sustainability continued
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74

A.1.7. Stakeholder engagement
Relevant standards: GRI 102-
13/43/44
Overview
The aviation industry will decarbonise
faster with stakeholder and policy
support.
The Group and its operating airlines
regularly engage with key stakeholders:
governments and regulators, shareholders,
lenders and other financial stakeholders,
trade associations, customers, suppliers,
employees, communities, NGOs and
academic institutions to advocate for
support foremissions reductions and to
share progress on Flightpath Net Zero.
Following our successful first IAG ESG
day for investors in 2022, IAG delivered
a sustainability update as part of its
Capital Markets Day in November 2023.
Internal governance ensures that wider
stakeholder engagement on climate
change is consistent with material issues
and environmental goals.
Key stances on climate change
IAG supports cost-effective approaches
to deliver net zero emissions by 2050,
advance low-carbon solutions, and
support global efforts to align with 1.5°C.
Actions within associations focused on
UK aviation, Spanish aviation and global
aviation policy are listed in the table
opposite. If the climate-related positions
of trade associations are deemed to be
substantially weaker or inconsistent
withthese internal stances, IAG
representatives take roles on task forces
and working groups and respond
toconsultations to communicate
ourposition and constructively move
toalignment.
IAG is proud to have consistent views on
climate change with all the organisations
of which it is a member (below). IAG has
positively influenced this outcome by
contributing expertise and time to drive
net zero commitments, and create and
support roadmaps to net zero emissions
across SA, A4E, oneworld, JZC, and
ATAG. IAG has also driven and
encouraged higher SAF ambitions
across the JZC, oneworld andWEF. IAG
and key trade associations are listed on
the EU Transparency Register.
Key principles of climate-related
engagement
Aviation is a global industry and IAG
remains committed to global
policyapproaches.
IAG supports carbon pricing asakey
instrument to determine both thepace
of emissions reductions for theaviation
industry and the balance ofin-sector
and out-of-sector reductions. We
advocate for the use ofgreenhouse gas
emission removal technologies in carbon
markets, bybothnatural and engineered
means. By 2050 we are committed to
using onlyGGRs to cover ourresidual
carbon emissions.
IAG prioritises policy advocacy on SAF
too, asthis is a key emissions reduction
driver in the next decade, and supports
policies on operational efficiency,
zero-emission aircraft and carbon
offsets and removals.
The Group seeks to ensure that policies
delivered are effective and fair across
multiple airlines.
Luis Gallego participated
inasustainability panel
attheSustainability Skies
WorldSummit2023.
Risks associated with SAF
SAF is a key solution in IAG’s
transition plan to net zero (Section
A.1.2.), but remains a developing
market, which in many regions is still
awaiting policy definition to drive
infrastructure investment. IATA
projects SAF production will meet
just 0.5% of global aviation fuel
demand in 2024
1
. IAG separates SAF
risks into market, policy and
technological risks associated with
scaling up the global SAF industry.
IAG considers the respective
impacts on fulfilling IAG’s 2030
commitments and future regulatory
obligations, by modelling the impact
of regional differences in future SAF
supply and costs, associated with
different policies (policy risk), SAF
feedstock technologies (technology
risk) and market prices (market
risk). IAG uses this modelling to
influence SAF strategy and
investments.
1 IATA Pressroom report: SAF Volumes
Growing but Still Missing
Opportunities, published 6 December
2023.
Sustainability continued
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75

Member of organisation IAG involvement in organisation and actions to ensure and move to consistent stances
UK focus
Sustainable Aviation (SA) One of 13 members of SA Council, which governs activities for 44 members
Drove development of SA’s net zero roadmap in 2023, which for the first time included
the demand impact of a net zero transition. IAG was also an active participant in
workstreams to advance low carbon solutions
Jet Zero Council (JZC) Chairs SAF Delivery Group and supported creation of UK Jet Zero Strategy in 2022
todeliver net zero UK aviation by 2050. British Airways CEO a member
Royal Aeronautical Society (RAeS) –
Greener by Design group (GbD)
Executive Committee of GbD, attended non-CO
2
conference in 2022 and 2023 to
understand how best to mitigate these effects
Spain/Europe focus
Grupo Español para el Crecimiento Verde
(Spanish Group for Green Growth)
Formed in 2023. Iberia is one of over 50 corporate members supporting green growth
Alianza para la Sostenibilidad del
Transporte Aéreo en España (AST)
(Spanish Alliance for Sustainable Air
Transport)
The main stakeholders of the Spanish air transport sector formed the alliance with
theobjective of promoting the development of sustainable aviation. Three working
groups have been defined to respond to the main challenges that the sector now faces:
operational efficiency, SAF and policy
Airlines 4 Europe (A4E) Founding member, drove development of net zero roadmap in 2021, supported
ReFuelEU consultation responses and other work to advance low carbon solutions
In 2023, IAG has supported the update of the A4E decarbonisation roadmap, and
participated in working groups looking to develop solutions for non-CO
2
emissions
Global focus
Coalition for Negative Emissions Founding member in 2020, Steering Group member, active contributor to consultation
responses to UK Government on how to scale up carbon removals
oneworld (represents 15 airlines) Chaired the Environment Strategy Board (ESB), coordinated net zero roadmap
and10% SAF ambition across 2020-21, hosted two ESB meetings in London in 2023,
continues to provide support for advancing low carbon solutions
Air Transport Action Group (ATAG) Significant airline contributor to global aviation roadmap to net zero in 2020-21,
whichhelps to inform industry priorities for continual advancement of low carbon
solutions
World Economic Forum (WEF) – Clean
Skies for Tomorrow Coalition
Regular contributor to reports on how to scale up SAF as a low-carbon solution,
advocated for 10% SAF ambition by 2030
IATA (represents 300 airlines worldwide) Chaired the IATA Sustainability and Environment Advisory Council (SEAC),
representatives on IATA working groups to advance policies for low carbon solutions,
supported advocacy for net zero commitment at ICAO and strengthening of CORSIA
baseline. Moderated a panel at the inaugural IATA World Sustainability Symposium in
Madrid in October 2023
IAG are an investor in Nova
Pangea, an innovative company
producing SAF feedstock.
Jonathon Counsell, IAG Group
Head of Sustainability and Jim
Davies, IAG Programme Director
– Sustainable Flight are pictured
here with Anthony Brown MP,
UK Aviation Minister and Sarah
Ellerby, CEO Nova Pangea.
76

UK – Jet Zero Council
The UK Government’s Jet Zero Council
(JZC) launched in 2021 as the first of
itskind partnership between the aviation
industry and Government. The JZC aims
to provide advice on the Government’s
ambitions to deliver net zero aviation
and zero-emission flights. It brings
together ministers and CEO-level
stakeholders, with regular meetings
andsubgroups to drive the ambitious
delivery of new technologies and
innovation to cut aviation emissions.
Through the success of the JZC, several
countries have followed its example,
including in Spain and Ireland.
In 2023 IAG supported the JZC’s
focuson SAF. This included the UK
Government’s second consultation on
SAF, participation in the SAF mandate
sub group and the commercialisation
sub group, and supporting a revenue
certainty mechanism for SAF, which
theUK Government has now committed
to through the UK Energy Bill.
The Ninth Jet Zero Council focused
ongreenhouse gas removal technology,
and BAshowcased its nature-based
carbon removal projects
Left: Mark Harper, Secretary of State
for Transport, UK Government
Right: Jonathon Counsell, Group Head
of Sustainability, IAG
Spain – Alianza para la Sostenibilidad
del Transporte Aéreo en España
(Spanish Alliance for Sustainable Air
Transport)
The Spanish Alliance for Sustainable
AirTransport (AST) was launched in
April 2023. The AST is a joint initiative
comprising the air transport industry,
academia, and NGOs to promote the
development of sustainable aviation
inSpain, favouring the implementation
ofnew technologies and innovative
processes that make the long-term
sustainability of the sector possible,
andboost pathways towards
decarbonisation. Iberia played a key role
in creating the AST, and both the Iberia
and Vueling CEOs are members.
Key engagement forums in the UK, Spain and Ireland
Ireland
In 2023, the Irish Government
announced plans to establish
aGovernment-Industry SAF forum
toinform and guide its work onSAF.
IAG welcomed this announcement and
Aer Lingus is continuing toengage at
European level, andwiththe Irish
Government onpolicy support to
incentivise SAFproduction in Ireland.
Sustainability continued
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77

A.2.1. Waste
Relevant standards: GRI 306-1/2/3
(2020).
Overview
IAG has one of the most comprehensive
waste reduction plans in the airline
industry. Our priorities include reducing
food waste, and eliminating the use of
single-use plastics, in addition to
increasing recycling across our
operations.
On-board services are the main source
of waste. Key waste outputs include
plastic packaging, leftover food waste,
A.2. Planet – wider issues
drinks cans and cabin items such as
wrappers. Key inputs included on-board
meals and amenity kits supplied to
passengers.
In 2023, IAG operations generated:
• 52,699 tonnes overall (52,655 tonnes
in 2022); comprised of
• 51,749 tonnes non-hazardous waste;
and
• 950 tonnes hazardous waste.
We recovered or recycled
7,650tonnes(19%).
Waste is typically offloaded and
processed at airports by third-party
caterers, with some materials recovered
on-site and other materials incinerated
or sent to landfill. The majority of cabin
and catering waste is processed at IAG’s
hub airports – Barcelona, Dublin, London
and Madrid – although the Group fliesto
over 200 airports worldwide.
Below is the Group’s most
comprehensive waste disclosure to date.
Waste trends are stabilising with the
return to normal operations following
the COVID-19 pandemic and IAG
remains committed towards delivering
our 2025 goals.
Metric Unit 2019 base 2025 target 2023 2022 2021 2020 vly
On-board waste per passenger Kg/pax 0.33 0.26 (-20%) 0.32 0.41 0.47 0.75 (22%)
Office waste per full-time employee Kg/FTE 95.7 47.8 (-50%) 81.8 83.0 103.1 124.5 (1%)
Maintenance waste per unit of activity Kg/person-hr 0.63 0.47 (-25%) 0.11 0.12* 0.28* 0.38* (8%)
Cargo waste per unit of cargo carried Kg/tonne cargo 1.55 1.16 (-25%) 1.54 1.59 1.43 1.59 (3%)
On-board waste at hubs recycled/recovered % 24% 40% 20% 24% 26% 31% (4pts)
Office waste recycled/recovered % 35% 60% 26% 26% 13% 16% 0pts
Maintenance waste recycled/recovered % 50% 70% 72% 60% 45% 35% 12pts
Cargo waste recycled/recovered % 63% 80% 77% 59% 61% 55% 18pts
Note: * means restated using the latest data and assumptions.
Commentary on key metrics
Key metrics Description Commentary
Overall waste Includes waste from all streams – on-board, office, cargo and
maintenance waste – and an extrapolation of waste processed
at overseas airports, where waste destinations are not always
reported by third parties.
Waste volumes have increased less than 1% in
2023. This is despite activity levels returning
topre-pandemic levels. Please refer to examples of
waste reduction initiatives across the Group for
more details.
Waste
recycling and
recovery
Includes re-use, downcycling, upcycling, composting and
anaerobic digestion. Regulations, including International
Catering Waste (ICW) regulations, limit the amount which
canbe recycled.
Overall recycling/recovery rates are 19%. Recycling
of maintenance and cargo waste has increased
significantly owing to initiatives implemented in
this section of the report. Onboard recycling has
fallen year-on-year as operations recover to
pre-pandemic levels. Office waste has not
increased year-on-year, but initiatives launched in
2023, such as new recycling bins at Waterside, are
expected to deliver an increase in office waste
recycling rates in 2024.
Single-use
plastic (SUP)
Items made wholly or partly of plastic and are typically
intended to be used just once or for a short period of time
before they are thrown away. This aligns to the EU definition.
160 tonnes of SUP were reduced from initiatives
such as using birchwood cutlery and replacing
packaging on blankets. The IAG GBS Procurement
team is evaluating alternatives to plastic as part
ofprocurement processes.
Waste/pax at
hubs
On-board catering waste generated per passenger, including
volumes later recycled and recovered.
Passenger numbers are based on those inbound and outbound
passengers who have their waste processed at hub airports:
Barcelona, Dublin, London Heathrow and Gatwick, and Madrid.
Waste generation ratios per passenger have
improved to pre-pandemic levels, and we are
committed to meet our 2025 target (a 20%
reduction compared to 2019 levels).
Detailed descriptions of all waste metrics are available in the Consolidated Statement of non-Financial Information.
Reducing waste across our operations
IAG launched a ‘5 by 2025’ plan in 2021 that covers five waste streams and five business units, using 2019 figures as the baseline
forour targets. The plan includes waste generation and recycling targets across on-board, office, cargo and maintenance waste
anda zero-based approach to single-use plastic (SUP). IAG is committed to reducing, reusing and recycling waste and dealing with
any hazardous waste in line with relevant national and international regulations.
78

Our action on reducing waste is increasing
Year 2016 2021 2022 2023 2025
Targets First Group-wide
waste targets
launched
New initiatives to
recycle more
on-board waste
Delivery of ‘5 by
2025’ waste targets
Action Iberia joins the EU
LIFE Zero Cabin
Waste project
EU SUP ban comes
into force
Aer Lingus worked
with the Irish
Department of
Climate, Action &
Environment and
Department of
Agriculture to make
it possible to recycle
and segregate
recycling on-board
• IAG launches
working group
dedicated towards
advancing waste
strategy;
• Aer Lingus
becomes the first
airline to segregate
and recycle
on-board waste
arriving on short-
haul flights into
Ireland; and
• Vueling eliminates
single-use plastics
in on-board items
and products
Examples of waste reduction initiatives across the Group:
Operating
company 2023 examples
Aer Lingus Aer Lingus becomes the first airline to segregate and recycle on-board waste arriving on short-haul flights into
Ireland.
British Airways British Airways offers a pre-ordering service for products from the on-board SpeedBird Cafe, to give passengers
the choice of buying fresh and ambient products before departure. These services remove food waste from
unpurchased short-haul economy cabin meals while maintaining customer choice. British Airways has a target
tohalve food waste volumes between 2019 and 2025.
British Airways becomes the first airline to be certified to recycle into New York as part of the IATA Transatlantic
trial. Regulated garbage restrictions in the US dictate that anything that has touched food waste onan international
flight has to be disposed.
IAG Cargo Colleagues from IAG Cargo’s graduate programme have helped develop and launch re-usable cups for any
beverages purchased from our canteen at London Heathrow in September 2023. This has reduced single-use
plastic cups across the hub by 41%.
The graduate programme has also developed a prototype of a new luggage tag made from waste aluminium
pallets, which will be made available for sale to customers. IAG Cargo is also exploring how this may be achieved
using other materials that are difficult to recycle or re-use.
IAG GBS The office at Waterside has launched new bins across all floorplates, divided into either five or seven sections
toallow for multiple waste streams to be collected and disposed of easily. The trial aims to improve waste
segregation and increase recycling levels.
Iberia Iberia offers a Buy-Before-You-Fly service on short-haul flights and runs the Zero Cabin Waste project which aims
to recycle on-board generated waste. Iberia segregated glass on-board for the first time in 2023.
Vueling Vueling replaced all on-board cabin trolleys in 2022 with lighter trolleys that allow the segregation of waste
on-board. Thishelps ensure waste can be processed more easily, resulting in a higher share of waste recycled and
a lower environmental impact. The lower weight of the trolleys also helps reduce CO
2
emissions from aircraft
operations, by up to 400tCO
2
e annually.
Sustainability continued
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79

A.2.2. Noise and air quality
Relevant standards: GRI 305-7.
IAG has delivered a 14% reduction in noise per take-off and landing cycle (LTO) versus 2019, driven by fleet renewal. Noise per
take-off has improved by 3% from 2022 levels owing to the use of newer, quieter aircraft and changes in the mix of short-haul and
long-haul operations following the COVID-19 pandemic. IAG remains committed to reducing the impact of aircraft noise and air
pollution on local communities near airports and supports innovation asameans of delivering this. Noise and air quality performance
are monitored using national databases and global aircraft noisestandards.
Group airlines continue operational practices to minimise noise impacts, such as the use of continuous descents. They engage with
stakeholders such as community groups, regulators and industry partners to understand their concerns and participate in research
and operational trials to identify and refine solutions.
Noise reduction targets
IAG is updating noise reduction targets as flying levels return to pre-pandemic levels. Iberia is continuously improving the KPIs
related tonoise levels, as the new fleet we are introducing has better noise certification levels than the previous aircraft.
Detailed descriptions on all noise metrics are available in the IAG statement of non-financial information.
Metric Unit
1
vly v2019 2023 2022 2021 2020 2019
Noise per cycle QC per LTO (2%) (14%) 0.86 0.88 0.88 0.96 1.00
NOx per cycle kg per LTO <1% (4%) 8.89 8.83 9.22 9.84 9.23
ICAO Chapter 14 % at standard 3pts 9pts 62% 59% 56% 58% 53%
CAEP Chapter 8 % at standard 6pts 12pts 47% 41% 39% 40% 35%
1 % at standard is based on the fleet position at the end of 2023, including parked aircraft and excluding leased aircraft. Metrics per LTO are based on
aircraft operational during the year. Details of Chapter 6-compliant aircraft are available in the IAG statement of non-financial information.
Related risk: Operational noise restriction and charges
Risk and/or opportunity description and potential impact Mitigating actions
Airport operators and regulators apply operational noise
restrictions and charging regimes which may introduce additional
costs or restrict airlines’ ability to operate, e.g. restrictions on
night flights.
• Investing in new, quieter aircraft as part of fleet modernisation
• Continually improving operational practices including
continuous descents, slightly steeper approaches, low-power/
low-drag approaches and optimised departures
• Internal governance and training and external advocacy
inIreland, Spain and the UK to manage noise challenges
A.2.3. Environmental management
Relevant standards: GRI 103-2
Overview
IAG is committed to improving our environmental performance and complying with recognised standards in our sector for
environmental management on material issues identified in this report. Key priorities include working towards theIATA
Environmental Assessment (IEnvA), meeting ISO 14001 requirements and improving the EcoVadis score of Group airlines
participating in the questionnaire (British Airways and Iberia).
Additionally, IAG GBS partnered with EcoVadis in 2022 to assess suppliers using EcoVadis scorecards, which consist of a holistic
view of environmental, social and governance (ESG) issues. This gives IAG and its suppliers a baseline for improvements across
ESGissues, and suppliers can share this with customers and other stakeholders to support sustainability across the industry.
80

Group airlines 2023 progress
In 2023, all Group airlines were fully certified under the IEnvA standard which is equivalent to ISO 14001 inall our flight operations
and corporate buildings, complying with the core scope defined by IATA.
Additionally, British Airways and Iberia have extended the certification to their maintenance activities at hub airports and, in the case
of Iberia, also to its handling services in Madrid Airport. Iberia Airport Services holds an ISO 14001 in all the airports at which it
operates, with the aim of guaranteeing that an environmentally responsible service is provided to its customers.
In line with our commitment to supporting a more responsible supply chain, British Airways and Iberia respond annually to the
EcoVadis questionnaire. EcoVadis is a market-leading provider of business ESG ratings. The response to this questionnaire is
supported by the Group’s policies and practices, such as supplier engagement policies administered by IAG GBS, which also allows
us to identify points of improvement to annually improve the score of all Group airlines.
As part of our supply chain management objectives and our partnership with EcoVadis, IAG GBS has screened 90% of IAG’s spend
using EcoVadis scorecards, which means screening more than 550 suppliers.
Airline EcoVadis 2023 score
British Airways Bronze
Iberia Silver
IAG third-party ESG assessments and awards
The Group also continues to provide evidence to support third-party ESG disclosures and rating assessment frameworks.
In 2023, IAG has been awarded an A- grade by the Carbon Disclosure Project (CDP) for its climate change disclosure, which
assessed more than 21,000 companies globally on climate action. This is the fourth year IAG has achieved a ‘leadership’ rating of A-
or higher, the longest consecutive leadership rating of any airline, and places the Group in the top 25% of respondents worldwide.
IAG was also the highest ranked aviation group in the global Transition Pathway Initiative (TPI) in 2022, which assesses 600
companies across 47 countries on their readiness for the low-carbon transition. IAG is in the top 10% of airlines assessed by
Sustainalytics, which gives ESG risk ratings to around 15,000 companies worldwide based on public disclosures.
IAG was also awarded 2024 Eco-Airline of the year by Air Transport World for industry leadership and a best-in-class SAF
programme, while Aer Lingus received the Aviation Sustainability and Environment award at the Irish Aviation 2023 Awards.
Reporting requirement Current rating Comments
TPI Highest-ranked airline in 2022 TPI climate ratings
(Score: 17/18)
TPI assess around 600 companies on their
readiness for a low carbon transition
CDP A- rating in 2023 (top 25%) Leadership rating achieved for fourth consecutive
year, longest running of any airline
Sustainalytics Top 10% of airlines in 2022 Sustainalytics provide ESG ratings to around
15,000 companies
For IAG’s engagement with the Transition Pathway Initiative, please refer to section A.1.2. of this report. For more information
onourengagement with carbon disclosure providers, please refer to the ‘Principles of sustainability governance’ section.
Working with pathway initiatives
IAG supports the 1.5°C ambition of the Paris Agreement and continues to review evidence on aviation pathways which support this.
Where possible, IAG will work with relevant stakeholders, including the Science-Based Targets initiative (SBTi) and Transition
Pathway Initiative (TPI), to build an understanding of aviation industry pathways to net zero, how these contribute to national
andglobal goals, and how companies and policymakers can drive investment into a low carbon transition. IAG is supporting work
led bythe Mission Possible Partnership (MPP) and the SBTI to update the 1.5
o
C guidance for the aviation sector.
Left: Aer Lingus received the
Aviation Sustainability and
Environment award at the Irish
Aviation 2023 Awards. The
award was received by Rebecca
Hill, Head of Sustainability,
Aer Lingus.
Right: In 2023, Group airlines
were fully certified under the
IEnvA standard in all our flight
operations and corporate
buildings
Sustainability continued
A. Planet
81

B.1. Overview
IAG's structure is unique. Together we
work towards our common purpose of
connecting people, businesses and
countries. The IAG model empowers
each operating company and platform
business to deliver for its customers and
people – with each being responsible for
managing recruitment, pay and
conditions for their colleagues, as well as
careers and development – while
centrally we look at opportunities for
synergies across the Group.
Each operating company and platform
business has its own culture and values
which support its unique brand,
business, customer and employee
propositions. At IAG, we hold
commitment, pragmatism, execution,
ambition, resilience, challenge and
innovation, responsibility, people focus
and team players as key values that
enable us to fulfil our purpose. These are
woven throughout our ways of working,
people processes and our people
strategies.
Colleagues have consistently
demonstrated these values in
responding to the various challenges
and opportunities they have faced
across the year. We've made substantial
headway in rebuilding capacity,
enhancing resilience and flexibility, and
making transformative changes in our
business, whilst navigating operational
challenges, particularly in British Airways
and Aer Lingus.
Across the Group, our focus on culture
and values is essential to our
transformation and the execution of our
strategy. Our operating companies are
working to constantly evolve their
cultures to enable their businesses to be
more competitive and achieve our
transformation agenda and to provide a
great working environment in which all
colleagues can thrive. We measure
progress on our culture through a
six-monthly Organisational Health Index
(OHI) survey sent to all employees and
through other employee listening
channels (see the Stakeholder
Engagement section for details). Insights
from these channels feed into our
operating companies’ priorities for
improving and progressing our people
policies, ways of working and shaping
our people strategies.
B. People
In 2022, our primary focus was to build
back capacity to support our business
and operations. In 2023, we have been
able to focus on a broader range of
people initiatives including:
• investing in the skills of our workforce
and commitment to professional
development and careers – including
our award-winning apprentice
programmes and our pilot and
leadership programmes;
• building the culture within each of our
operating companies creates a
positive colleague experience and
drives customer-centricity and
operational performance. Twice-yearly
organisational health surveys enable
tracking of progress and help focus
people plans;
• continuing to make progress towards
our ambition of 40% senior leadership
roles held by women by 2025. At year
end 2023 we have 36% of senior roles
held by women, a two-point increase
in 2023 versus 2022 and an overall
increase of six points since 2020;
• building on initiatives already carried
out in some of the operating
companies, in 2023, we launched a
voluntary, anonymous and confidential
online survey to our senior leaders
across the Group to gain a deeper
understanding of the composition and
diversity of IAG’s senior leadership,
going beyond gender to include a
broad range of factors regarding
identity. The survey results will be
shared with senior leaders to inform
IAG’s people strategies and provide a
baseline of the diversity of IAG’s
senior leaders, enabling us to track
progress over time and support
discussions around equity, diversity
and inclusion. An output of the survey
feeds into the UK Parker Review,
which focuses on ethnic diversity of
Boards and senior leadership teams.
6% of our UK senior leaders self-
disclosed as ethnically diverse and our
senior leaders globally represent over
20 nationalities. To ensure continued
focus on increasing ethnic
representation, we have introduced an
ethnic diversity ambition of10% for
the Group’s UK senior leadership
population by the end of 2027;
• continued focus on creating an inclusive
and diverse culture and organisation,
encompassing the promotion of equity,
diversity andinclusion, and upholding
Group-wide policies designed to
eradicate discrimination;
• supporting the wellbeing of our
colleagues through the provision
ofarange of health, financial, and
lifestyle benefits. Each operating
company is committed to creating
apositive work environment
andtoactively contributing to and
supporting the overall wellbeing of
everycolleague;
• supporting colleagues through the
broader transformation of the
business including digitalisation,
artificial intelligence, modernisation
ofour fleet, investments in customer
and products; and
• operating companies have actively
engaged with trade unions to secure
balanced agreements, ensuring fair
and competitive remuneration.
Thesenegotiated agreements
providea critical foundation to
support investment and foster growth.
Sustainability continued
82

B.2. Key metrics and progress
Relevant standards: GRI 2-8, 401-1, 405-1
Headcount
71,794
+9% vly
at 31 December 2023
New hires
13,561
-22% vly
at 31 December 2023
Overall attrition
9.50%
of which 7.40% were voluntary leavers
Full year 2023
Airport Operations
Cabin Crew
Corporate
Maintenance, Engineering & Logistics
Pilot
23%
33%
22%
10%
12%
2023
2022
7,868
8,223
6,782
6,972
14,025
15,811
22,278
24,004
15,091
16,784
Airport Operations
Cabin Crew
Corporate
Maintenance, Engineering
& Logistics
Pilot
Workforce composition
North America
950
3%
Europe
67,748
8%
Latin America
and Caribbean
324
1%
Africa, Middle East
and South East Asia
2,527
24%
Asia Pacific
245
-9%
United
Kingdom
Ireland
Europe
(other)
Spain
37,500 (+11%)
23,743 (+7%)
5,159 (+10%)
1,346 (-21%)
Headcount by geographical location
at 31 December 2023
Workforce composition
Headcount by professional category at 31 December 2023 vly
European countries
Sustainability continued
B. People
83

B.3. Equity, Diversity
andInclusion
Relevant standards: GRI 405-1
At IAG we are proud of the diversity of
the workforce across our Group
companies and the richness of
backgrounds, experiences, cultures and
ideas that makes our businesses thrive.
Our aim is that all colleagues feel their
unique difference is recognised and
valued. IAG continues to bring positive
change and progress towards our equity,
diversity, and inclusion (EDI) ambition to
create a diverse and inclusive culture
representative of the communities we
live and work in and the customers we
serve.We also believe that a diverse
workforce performs better and is more
resilient, innovative and productive.
Progress on gender diversity
With regards to gender, our Board
comprises 45% women, the IAG
Management Committee 25% women
and we have over 44% of women across
our workforce. In 2022, we set a Group-
wide ambition to have 40% of senior
leadership roles held by women by 2025.
We have seen a significant increase in
gender diversity in senior leadership to
36% in 2023, a two-point increase since
2022 and six points since 2020 and are
on track to achieve our 40% ambition.
Going beyond gender
Our Group-wide plans go beyond
gender, and we are implementing
arange of initiatives to support our
diversity and inclusion ambition, whilst
recognising the cultural sensitivities and
legal contexts we operate in globally,
and the need to comply with evolving
reporting requirements.
In 2023, we partnered with an
independent UK-based talent and
diversityconsultancy, Green Park, to
gain a deeper understanding of the
composition and diversity of our senior
leaders, going beyond gender to include
a broad range of factors regarding
identity. A voluntary, anonymous
andconfidentialonline survey was sent
to senior leaders across the Group.
We are delighted that 88% of our senior
leaders globally responded to the survey
(193 out of 219
1
leaders invited) with a
96% response rate in the UK (91 out of
95 leaders invited). While some of the
operating companies were already
capturing broader demographic data
shared by colleagues, this is the first
time we have surveyed our senior
leaders across the Group with questions
tailored to local legal and cultural
contexts.
The survey provides a baseline to better
understand the diversity of our senior
leadership population,enables us to
track progress over time and to continue
and broaden our dialogue with our
senior leaders around equity, diversity
and inclusion.
Females 82
Males 143
64%
Senior
Leadership
36%
Gender diversity of senior
leadership
at 31 December 2023
36%
6 points increase since 2020
We are on track to achieve our
ambition of 40% of senior leadership
roles held by women by 2025.
1 Number of senior leaders at the time of
sending out the survey
84

Focusing on ethnicity and nationality
One of the areas we focused on in the 2023
survey was ethnicity. 6% of our senior
leaders based in the UK self-disclosed as
ethnically diverse. Two leaders responded
Prefer not to Say and four did not consent
to their data being processed.
We recognise that we have progress to
make and are introducing an ambition for
10% of the Group’s UK senior leadership
population to identify as ethnically diverse
by the end of 2027. This has the support
of both the Board and Management
Committee.We have decided to focus our
ethnicity ambition on the UK as ethnicity
and race are well-defined characteristics
aligned with census data.We support the
recommendations of the Parker Review in
the UK both in terms of reporting the ethnic
diversity of our Board and senior leaders,
and in setting an ambition for 2027.
Given IAG’s global focus we see great
value in having diverse ethnic, national
and cultural backgrounds represented in
the workforce: across our 71,794
colleagues,wehave over 150
nationalities. Thesurvey highlighted that
our senior leaders globallyrepresent over
20nationalities. Inthe UK, 34% of senior
leaders self-disclosed as anationality
other than British.
The survey results are being shared with
our senior leaders and used to inform our
people strategies. We remain committed
to creating a diverse and inclusive
culture. We will continue to uphold
Group-wide policies designed to
eradicate discrimination and to focus on
open and transparent people processes,
mindful choices of search partners,
diverse recruitment shortlists and more
rigorous definitions of critical role
requirements, focusing on capabilities
rather than experience.
Right: British Airways’
celebration of Black
History Month
Left: British Airways’
Diwali celebrations
Our data relies on senior leaders
self-disclosing their diversity status.
Individuals who have chosen not to
report their ethnicity are not included in
the calculation as minority ethnic
leaders.
We use the following methodology
tocalculate:
% of ethnically diverse
seniorleadership in UK
=
(Total number of UK leaders who
self-identify as minority ethnic)
(Total number of senior leaders in UK)
Aligned with the UK Parker Review
guidance:
• a leader is identifiedas 'minority
ethnic' ifthey self-disclose as one of
the following groups: Asian, Black,
Mixed/Multiple, Other (with
theoption to describe the ethnicity)
or Prefer to Self-define (where the
ethnicity maps to an ethnic minority
category); and
• a leader is not included as 'minority
ethnic' if they identify asWhite,
Prefer not to Say, Do not Consent to
data being processed, Prefer to
Self-define (where the ethnicity does
not map to an ethnic minority
category) or did not reply to the
survey.
Three different surveys were designed
for the UK, Ireland and Spain – aligned
to each country’s legal and cultural
context – using local census questions
and classifications. In some countries
we did not include the ethnicity
question due to the legal and cultural
context. Where collected, the ethnicity
resultsprovided to IAG have been
aggregated and mapped to the UK
ONS classification categories.
Data is held by Green Park and only
shared with IAG and its companies for
reporting at an aggregate level with
minimum thresholds to safeguard
anonymity.
We define senior leaders as IAG
grades 0, 1 and 2 or equivalent across
the Group, including Senior Executives
(direct reports to IAG's CEO).
Ethnicity reporting methodology
Sustainability continued
B. People
85

Collaborating on EDI across the
Group and supporting progress
across our industry
The IAG Diversity Panel, created in 2021,
sees representatives across all operating
companies sharing best practice and
leading on the co-design and
implementation of new EDI initiatives
that guide us towards our ambition.
We continue to partner with Women in
Hospitality, Travel and Leisure (WiHTL).
This year several operating companies
participated in WiHTL’s EDI maturity
assessment and benchmarking exercise,
in partnership with the Centre for
Diversity Policy Research and Practice at
Oxford Brookes Business School. Both
at Group and operating company level
we continue to collaborate with industry
peers and were recently awarded the
WiHTL ‘Most Engaged Member’ at its
2023 Inclusion Summit.
We actively partner with International Air
Transport Association (IATA) and are
committed to advancing gender diversity
as part of IATA’s 25 by 2025 strategy (a
global initiative to enhance EDI and
gender balance in the aviation sector).
Each airline is looking at increasing the
diversity of its pilot populations through
talent attraction and recruitment
practices and through school
engagement and outreach programmes.
British Airways, Aer Lingus and Iberia
have launched fully or semi-funded pilot
cadet programmes.
Equity, Diversity and Inclusion
examples
Aer Lingus has made strides in gender
diversity within the Future Pilot
Programme, with the first successful
cohort comprising approximately 27%
women. Aer Lingus currently has 11% of
pilot roles filled by women, the third-
highest gender representation of pilots
of all airlines globally (Source:
International Society of Women Airline
Pilots 2021).
British Airways launched the Speedbird
Pilot Academy, funding 70 spaces aimed
at removing financial barriers to entry
for pilot roles, while also introducing the
'Be an Original' inclusion and diversity
learning programme for all colleagues.
British Airways also launched a
reversementoring programme pairing
80 senior managers with colleagues
from under-represented ethnicities to
promoteawareness and improve
inclusion. Additionally, British Airways
focused onincreasingrepresentation
through internships, apprenticeship
programmes and work experience
placements – opening up different entry
routes to a higher proportion of ethnic
minority colleagues and those from
lower socio-economic backgrounds.
Asit participates in Europe's largest event
for black entrepreneurs, British Airways
actively encourages and engages
incultural activities that are important
tocolleagues across the business.
IAG Cargo introduced a new training
hub with a flexible bank holiday policy
topromote inclusivity. Additionally, it has
revamped its prayer room and nursing
room to be fully accessible. IAG Cargo
took second place in The Equity Index
2022/23 produced by Lead 5050, a UK
cross-industry accreditation body, that
ranks firms using official data on average
salaries, bonuses, and pay at every level.
The business also supported the
'everywoman in Transport and Logistics
Awards' that promotes and inspires
women within the industry.
IAG GBS is actively fostering an inclusive
workplace through the initiatives of its
Inclusion Network/Community Groups,
including the LGBTQ+ Network and
Working Parents and Carers Network.
Astrategic partnership with MyGWork,
the largest professional speciality
platform for the LGBTQ+ community,
offers a range of collaborative efforts
such as job postings, speaker events,
Pride celebrations and access to a
substantial talent community.
IAG Loyalty engaged a representative
group of colleagues focused on driving
an inclusion and belonging agenda. The
group designed and led a calendar of
EDI events and experiences based on
colleague listening and survey data.
There have been high levels of
engagement across all topics including
Pride, International Women's Day,
Menopause Day, Baby Loss Awareness,
Ramadan and other events designed by
colleagues, for colleagues.
IAG Tech proudly supports women
inthe tech sector, sponsoring the
‘Outstanding Women of the Year’
awardat the Women in Tech event and
maintaining job postings on platforms
such as the Diversity in Tech website.
Vueling and Iberia have refreshed their
equality plans this year. Noteworthy
progress at Vueling includes an
increased percentage of women
inmanagement positions. Iberia’s
strategic focus through a supported
network ofover 200 colleague diversity
ambassadors who help raise awareness,
identify organisational barriers and
whoare consulted on company
processes. This is supplemented with
mandatory training for the entire
company.
Co-parenting responsibilities
Relevant standards: GRI 401-3
The Group's operating companies
prioritise work-life balance, especially
inthe context of co-parenting
responsibilities. They have a range of
policies covering job-sharing, maternity,
adoption, paternity and shared parental
leave to support employees managing
co-parenting commitments. Online
platforms facilitate a collaborative
community for working parents and
carers, enabling the exchange of ideas
and mutual support, while also providing
access to digital resources offering
valuable information for maintaining
ahealthy work-life balance.
IAG Loyalty, as one of its focus areas,
looked at parental leave with an equity
lens, emphasising support for both
parents rather than just the primary
carer or birthing parent. Thisinitiative
applies in both the UK andSpain.
British Airways' newly
established Colleague
Accessibility Network
Group
86

Universal accessibility for people
with disabilities
Relevant standards: GRI 405-1
The Group adheres to all pertinent
legislation, guaranteeing universal access
for both employees and customers with
disabilities across our operating
companies. Our operating companies
strictly adhere to relevant accessibility
laws in our facilities and overall operations.
Each of our operating airlines is
committed to providing a seamless
customer experience, especially for
those with disabilities. Collaborating
withexternal organisations, including
theBusiness Disability Forum in the UK,
our airlines seek guidance and support
to enhance their efforts and strategies.
British Airways has developed a
comprehensive guide to provide support
for customers with disabilities, ensuring
their needs are addressed with clarity
and thoughtfulness. Furthermore, a
proactive approach to inclusivity is
evident in the neurodiversity training
offered to managers at all levels.
A new Colleague Accessibility Network
Group at British Airways has been
established, with a senior-level sponsor
to steer its initiatives.
B.4. Health, safety and wellbeing
Overview
Relevant standards: GRI 403-4, 403-6
At IAG, we are committed to the health,
safety and wellbeing of employees,
customers, and stakeholders, whether
inthe sky or on the ground. Our focus
encompasses preventing accidents and
diseases, controlling existing risks, and
championing continual improvement in
health and safety conditions. The IAG
SECR Committee plays a pivotal role in
overseeing operational safety and
corporate responsibility.
We operate in compliance with laws,
regulations, company policies and
industry standards, and maintain arobust
suite of health and safety management
systems across our operating companies.
Driving this commitment are governance
processes led by committees within each
operatingcompany.
Operating companies have made
substantial investments in initiatives that
address various aspects of employee
wellbeing, taking a holistic approach that
integrates physical, social, and financial
elements, alongside mental wellbeing.
Accident and severity rates are lower
compared to 2019, with a Lost Time
Injury (LTI) frequency rate of 3.7
instances per 200,000 hours worked.
Key initiatives
Aer Lingus ran a Health and Wellbeing
Week across three locations in Ireland,
featuring 21 different events. The week
included initiatives such as flu
vaccination vouchers for all staff,
comprehensive health checks,
reflexology treatment clinics, in-chair
massage clinics, defibrillator training and
webinars for family carers with guest
speakers. Additionally, Aer Lingus
provided an opportunity for colleagues
to try the ‘’smoothie bike’’, a unique and
engaging way to have fun, keep fit and
promote sustainable energy and healthy
living. The airline actively promotes a
comprehensive wellbeing portal
accessible to all staff. This resource
encompasses content onvarious
wellbeing topics, including mental and
physical health, monthly themed
informational webinars, a digital gym
offering online classes, an exercise
library and nutrition resources.
Regarding safety, Aer Lingus has a
safety engagement programme which
empowers managers and supervisors to
reduce risk of injuries by discussing safe
and unsafe actions.
Aer Lingus and British Airways have
revised their Health and Safety
e-learning induction training for new
staff, in addition toholding regular
communication throughHealth and
Safety action groups, promoting safe
behaviours, handling andtraining.
British Airways provides a leading
peersupport programme for pilots,
tiedto professional psychology support.
The airline is committed to ISO 45001
standards, enhancing operating
processes to prevent work-related injury
and illness. In addition, a dedicated
in-house occupational health service
hasbeen established, providing CAA
regulatory medical examinations tailored
for pilots and cabin crew. This service
extends for all colleagues in specific
trades, all in strict accordance with
UKhealth and safety legislation. British
Airways has a network of 150 dedicated
wellbeing champions collaborating
closely with health services to support
new and existing initiatives. British
Airways provides all colleagues globally
with complimentary access to ‘Unmind’
– an online wellness platform developed
by experts in neuroscience, cognitive
behavioural therapy, mindfulness and
positive psychology. Additionally, British
Airways has signed the ‘working with
cancer’ pledge as well as collaborating
with Endometriosis UK, creating a
supportive workplace for colleagues
living or impacted by these conditions.
Iberia’s commitment to employee
wellbeing is an integral part of the
’Eligecuidarte’ (‘Choose to take care
ofyourself’) programme within
Occupational Prevention Management. In
2023, Iberia’s efforts encompassed a
range ofinitiatives, including
physiotherapy services, heightened
awareness of prostate cancer, annual flu
vaccinations and the promotion of
physical fitness through the 'Use the
Stairs' campaign. Iberia has well-
established health and safety committees
in each of its relevant work centres.
IAG Cargo and British Airways
introduced new menopause guidelines
supported by a combination of online
webinars and roundtable discussions.
IAG Cargo established a cohort of circa
100 Mental Health First Aiders
throughout the organisation and has
implemented fitness classes and a
comprehensive wellbeing guide to
promote a holistic approach to health.
IAG GBS employees access valuable tips
on managing their wellbeing through
medical health webinars, resilience
training, yoga, pilates and online courses.
Additionally, the introduction of the
Headspace app for all employees and
their friends and family has seen
aremarkable 90% participation rate.
IAG Loyalty ensures colleagues have
easy access to wellbeing resources,
acentral hub page allowing seamless
navigation to content at any time.
Inaddition, it orchestrated engaging
events and curated unique content
during Blue Monday and Mental Health
Awareness week, prioritising mental,
physical and financial wellbeing, finding
every opportunity to combine fitness
with community activities.
IAG Tech has implemented Mental
Health employee first aiders who play
acrucial role in offering support to
colleagues during challenging times.
Industry-leading standards are being
recognised across the Group and, in
2023, Vueling received the Premio
Empresa Xcellens award which
recognises all the work Vueling has done
to promote a genuinely preventive
culture and improving employees’
quality of life. Vueling also holds
quarterly meetings with its health and
safety committee, composed of Vueling
management and trade union appointed
safety representatives.
Sustainability continued
B. People
87

B.5. Human rights and modern
slavery
IAG had no known cases of human
rights violations across the Group during
2023, the same as in 2022. IAG is taking
steps to prevent incidents of modern
slavery within the Group and across its
supply chains.
The IAG Group Slavery and Human
Trafficking Statement outlines these
actions and is available on the IAG
website. This statement is made under
section 54, part 5 of the 2015 UK Modern
Slavery Act (MSA). In terms of policies
associated with human rights, IAG asks
suppliers to comply with the Supplier
Code of Conduct, which expressly
prohibits the use of child labour and any
form of slave, bonded, forced or
involuntary prison labour, human
trafficking or exploitation. Modern
Related risk: Human rights
Risk description and potential impact Mitigating actions
Not preventing potential incidents of human trafficking via IAG
routes, damaging efforts to protect human rights and associated
legal, social and reputational impacts.
Potential human rights or modern slavery violations in the supply
chain leading to fines, compliance issues, social impact, business
interruption or reputational damage.
• Updated Group Slavery and Human Trafficking Statement
• Training for staff to recognise signs of potential human
trafficking and guidance and processes in place to report this
• See C.4. Supply chain governance
IAG is working towards the creation of a formal Human Rights policy, alongside the existing Code of Conduct and Supplier Code of
Conduct to consolidate its activities in this area.
slavery clauses feature in all new
supplier contracts as well as contract
renewals, which require full compliance
with all applicable anti-slavery and
human trafficking laws, statutes,
regulations and codes.
IAG remains committed to taking swift
and robust action if any evidence
relating to slavery or human trafficking
in our business supply chain is identified.
IAG is taking steps to prevent human
trafficking. Human trafficking is of
particular concern to IAG and to the
wider aviation industry, as the Group
transports millions of passengers every
year and has tens of thousands of
suppliers across the world. Operating
airlines work closely with governments
and the airports in which they operate to
ensure that any suspected trafficking on
our flights is identified, reported and
dealt with appropriately. IAG also
supports the 2018 IATA resolution
denouncing human trafficking and
reaffirming a commitment to tackle
thisissue and the ICAO Guidelines
forReporting Trafficking in Persons
byFlight and Cabin Crew – in addition
toactively contributing to the
ICAOAdHoc Working Group on
CombatingTrafficking in Supply
Chain(AHWG-TSP), an international,
jointindustry-regulatory group
providing advice to ICAO assisting in
thedevelopment of guidance material
on combating trafficking in persons
inanair operator’s supply chain.
Operating airlines also train staff to
recognise and respond to the signs of
potential human trafficking situations
and provide procedures for reporting
where any cases are suspected.
B.6. Community engagement and charitable support
Relevant standards: GRI 102-13, 201-1
In 2023, IAG raised over €7.4 million for charitable causes across the Group. Of this, 36 per cent came from customer contributions,
39 per cent from Company donations, 17 per cent from employee contributions, and 8 per cent from in-kind donations.
Metric GRI Standard Unit vly 2023 2022 2021 2020 2019
Total raised € million 14% 7.4 6.5 2.7 4.6 5.7
Group operating companies have partnerships with a range of organisations including:
Disasters Emergency Committee (UK), Flying Start (UK), Save the Children (Spain), Lovaas Foundation (Spain), Dublin Pride
(Ireland), Special Olympics (Ireland), Business vs Smog (Poland), Noble Gift (Poland), UNICEF (global)
88

C. Principles of sustainability governance
C.1. Sustainability strategy
IAG’s vision is to be a world-leading
airline group on sustainability.
That means using its scale, influence
andtrack record to not only transform
the business but drive the system-wide
changes required to create a truly
sustainable aviation industry. IAG is
committed to delivering best practices
in sustainability programmes, processes
and impacts, while executing Group
strategy.
IAG aligns its environmental strategy
with the three overall strategic priorities
of the business described in the
Strategysection.
Material issues
IAG focuses its sustainability strategy
onaddressing material issues: those
which are most important to key
stakeholders and which have the biggest
external impacts.
To identify these issues over a three-year
timeframe and to 2030, IAG repeated a
materiality assessment in 2021 which was
facilitated by an independent third party.
External stakeholders included investors,
corporate customers, policy makers,
trade associations, fuel suppliers, airports,
and NGOs. Internal stakeholders included
IAG Board members, all IAG Management
Committee members, and operating
company sustainability representatives.
The results inform ongoing disclosures
and strategy.
In our 2021 materiality assessment,
tackling climate change was identified as
the most material issue in the long-term.
In the short-term, as the business
recovers from the COVID-19 pandemic,
profitability and customer and employee
engagement and wellbeing remain
highpriorities.
IAG does not have specific risk
provisions, targets or guarantees related
to non-material issues such as water
consumption, biodiversity, raw materials
consumption, or light pollution. More
information on water and biodiversity
isavailable in the Additional Disclosures
section of the IAG statement of non-
financial information.
IAG will seek a double materiality
assessment when it next repeats
thisanalysis in 2024.
10 Oct 2019
22 Apr 2021
1992
8 Nov 2019 4 Feb 2020
22 Sept 2021
2005
11 Sept 2020 11 Feb 2021
4 Oct 2021
2009
31 Aug 2021 4 Oct 2021
9 Oct 2021
2021
2023
2021
3 Oct 2022
Leading net zero by 2050 roadmaps and commitments
Leading 10% SAF by 2030 commitments
Airline industry firsts
IAG
commitment
(first airline
group
worldwide)
IAG (first European airline
groupto commit)
British Airways publishes
carbon footprint
IAG roadmap
launched at
Capital Markets
Day
Sustainable
Aviation
roadmap and
commitment
World Economic Forum
(Cleaner Skies for
Tomorrow Coalition)
British Airways' carbon
offset programme for
customers
oneworld
commitment
A4E roadmap
and
commitment
oneworld alliance
British Airways proposes
CORSIA as part of
Aviation Global Deal
oneworld
roadmap
IATA
commitment
UK Government
British Airways and Iberia
Sustainability Linked
Loans (SLL)
30+ airlines globally
IAG makes net-zero
Scope3 commitment
ICAO
commitment
Advanced innovation
IAG awarded CDP
A-List company for
the first time.
Sustainability
category added to
Group accelerator
programme.
Founding member
of Coalition for
Negative Emissions,
supporting carbon
removals.
Secures first aviation
sustainability-linked
loan linked to ESG
targets, via British
Airways
Invests in hydrogen
aircraft (ZeroAvia)
Offers carbon
removals to
customers
(British Airways)
British
Airways in
new carbon
removal
financing
model
Dec 2017 Sept 2019 Oct 2020 Jan 2021 2021 Nov 2022 Dec 2023
Drove/leading role Supported IAG-specific
Sustainability continued
89

1
Clear and ambitious
targets relating to IAG’s
most material issues
2023 action
2025, 2030 and 2050 carbon
targets and published transition
plan. British Airways and Iberia
have sustainability-linked loans
related to 2025 carbon
efficiency.
2
Low-carbon transition
pathway embedded
inbusiness strategy
2023 action
Sustainability aspects included
in one-year, three-year and
2030 business planning for
operating companies.
3
Management incentives
aligned to delivering
alow-carbon
transitionplan
2023 action
Over 7,500 senior executives
and managers have 10% of their
annual incentive linked to
annual carbon intensity targets.
Our
9
KPIs
1
2
9
8
3
4
7
6
5
Sustainability leadership KPIs
4
Leadership in carbon
disclosures
2023 action
A- score received in CDP
climate ratings in 2023, fourth
consecutive year of climate
leadership status.
5
Accelerating progress
inlow-carbon
technologies including
aircraft technology, SAF,
carbon offsets and
carbon removals
2023 action
Sustainability remains a focus
area within the IAG accelerator
programme Hangar 51.
6
Accelerating innovation
in low-carbon
technology
as above
2023 action
British Airways, LanzaJet and
Nova Pangaea Technologies
signed an agreement that will
accelerate Project Speedbird,
an initiative created by the
companies in 2021 to develop
cost-effective SAF for
commercial use in the UK.
7
Industry leadership
inthe innovation and
deployment of SAF
including power-to-
liquids
2023 action
As of 31 December 2023,
ourtotal investment in SAF
is$1 billion, of which 86%
isfuture commitments.
Based on an assumed jet fuel
priceof $800 per metric tonne
andcontracted margins for
SAFproduction.
8
Stepping up our social
commitments including
on diversity, employee
engagement and
sustainability as a
corevalue
2023 action
36% of senior leadership roles
held by women, a 2 percentage
point increase on 2022.
9
Industry leadership in
stakeholder engagement
and advocacy
2023 action
Leadership roles across multiple
trade associations. See A.1.7.
IAG drives progress based on nine
strategic KPIs agreed by the Board
in 2021.
90

C.2. Governance frameworks
Relevant standards: GRI 102-46/-48
Overview
IAG has robust governance in place to ensure joined-up and progressive decisions on sustainability.
This also helps to ensure that wider stakeholder engagement is consistent with material issues and environmental priorities and
goals. An annual meeting planner for the Board ensures sustainability governance processes fit within the reporting and disclosure
framework of the Group.
The Group’s unique structure means that each individual operating company has a distinct sustainability programme. These are
regularly reviewed to ensure alignment with the Group sustainability strategy and principles, which covers material issues, KPIs
andengagement plans.
Relevant forums and levels of responsibility are indicated below. Information flows between groups is covered in section C.6., Risk
Management and Principal Risk factors section, and in the Corporate Governance section.
Board/management committee Frequency of meetings Responsibility in relation to sustainability
Board At least quarterly Approval for strategy, major investments, risk management and
controls and review of progress against environment and people
plans including climate-related goals and targets
Board Safety, Environment and
Corporate Responsibility (SECR)
Committee
At least quarterly Dedicated oversight of Group sustainability programme and
alignment with strategic priorities, review of progress against
environment and people plans. Provides a link between operating
company management committees and the IAG Board
IAG Audit and Compliance
Committee
At least quarterly Ensures compliance with relevant regulation and reviews Annual
Report and Accounts and Non-Financial Information Statement
IAG Management Committee At least quarterly Reviews and challenges Group programmes, the alignment of
operating company-specific programmes with Group priorities
and strategy, and progress against plans
Operating company management
committee
At least quarterly Reviews and challenges operating company-specific
environment and people programmes
Sustainability Governance
Forum Frequency of meetings Responsibility in relation to sustainability
IAG Sustainability Steering Group
(SSG)
At least quarterly Comprised of senior representatives from across the Group who
provide oversight of environmental and social initiatives and
reporting
IAG Sustainability network Monthly Sharing sustainability updates and ideas across all business units
and over 30 sustainability representatives. In 2023, the ISN
Sustainability network met 12 times, including 4 workshops
hosted in the UK, Spain, Ireland and Poland. Reports into the IAG
Sustainability Steering Group (SSG)
Hangar 51 Governance Committee At least bi-annually Reviews new potential investments to consider emerging climate
technologies and partnerships with sustainability start-ups.
Members include the Chief Commercial Strategy Officer, Chief
Financial Officer, Chief Information, Procurement, Services and
Innovation Officer
Sustainability continued
C. Principles of sustainability governance
91

Sustainability Working Groups (launched in 2023)
Forum Frequency of meetings Responsibility in relation to sustainability
Reporting and Disclosures Working
Group
Monthly A cross-Group working group designed to monitor IAG
sustainability disclosures against our regulatory requirements.
Assessment framework responses also discussed.
Waste Working Group Monthly A cross-Group meeting focusing on waste strategy, projects
andprogress.
Sustainability Key Performance
Indicator (KPI) Working Group
Monthly A cross-Group forum for sharing best practice and improving
KPIreporting
SAF Governance
Forum Frequency of meetings Responsibility in relation to sustainability
IAG SAF Steering Group At least quarterly Comprised of senior representatives from across the Group who
provide oversight of SAF strategic direction and approval for
new purchases and investments
IAG SAF Management Group Monthly A cross-Group meeting focusing on SAF strategy, projects, and
progress. Reports into IAG SAF Steering Group.
Governance responsibilities
Individual Frequency of reporting Responsibility in relation to sustainability
IAG CEO At least quarterly Chairs the IAG Management Committee, updates the Board,
andensures Board-level decisions are directed into action across
the Group
IAG Chief People, Corporate Affairs
and Sustainability Officer (CPCASO)
At least quarterly Reports to the IAG CEO. A member of IAG Management
Committee. Chairs the SSG and provides approval and direction
of Group programmes
IAG Group Head of Sustainability Regularly as relevant Reports to the IAG CPCASO. Chairs the Sustainability network
IAG Group Head of People Regularly as relevant Reports to the IAG CPCASO
Wider governance
Wider governance processes integrate sustainability aspects. As part of the Group-wide ERM process, sustainable aviation and
people, culture and employee relations risks are presented bi-annually to the Audit and Compliance Committee and annually to the
Board. One-year financial plans and three-year business plans are coordinated by Group Finance and include sustainability aspects.
92

C.3. Workforce governance
Relevant standards: GRI 2-30, 404-1,
404-2.
Each operating company within IAG
iscommitted to creating a work
environment in which safety and
wellbeing are paramount, in which
employees are treated fairly and
rewarded appropriately, and feel
motivated and can thrive. We believe
our employees are central to the
continued success of the Group.
Working policies and rights at work
At IAG our core principles include fair
and equal treatment, non-discrimination,
fairness and respect for human rights.
These are central to our IAG Code of
Conduct which applies to all employees
and directors across the Group.
Employees have been equipped with
comprehensive training and
development opportunities, ensuring
they are well-versed in essential topics
such as the Code of Conduct and
Compliance with Competition Laws.
Operating companies are responsible
fortheir own supplementary employee
policies and procedures, including
appropriate reward frameworks aligned
to local markets and roles, so they
remain competitive in attracting the best
talent. We have seen a wide selection
ofemployee benefits and recognition
schemes introduced in the operating
companies. For senior leader
remuneration across our operating
companies, we have deliberately focused
on variable pay and long-term incentives,
aligning leadership compensation with
performance and long-term strategic
goals to drive performance. We have
taken a restrained approach to executive
pay, remaining committed to fairness
and competitiveness.
Collective bargaining arrangements are
in place for 87% of the workforce.
Our operating companies have focused
on securing collective bargaining
agreements with unions to ensure fair,
competitive and sustainable pay –
providing stability for our business and
colleagues in challenging times.
IAG complies with International Labour
Organization (ILO) conventions. These
conventions cover fundamental
principles and rights at work: freedom of
association, the effective recognition of
the right to collective bargaining, the
elimination of all forms of forced or
compulsory labour, the elimination of
discrimination in respect of employment
and occupation.
IAG operating companies have effective
dialogue through employee forums and
through trade unions where they are
recognised. In addition, the IAG
European Works Council (EWC)
facilitates communication and
consultation between employees and
management on transnational European
matters. The EWC includes
representatives from the different
European Economic Area (EEA)
countries. It meets regularly throughout
the year to inform and, where
appropriate, consult on transnational
matters which impact employees in two
or more EEA countries.
Each operating company continues to
focus on engagement, listening and
acting on colleague feedback. In addition
to specific initiatives to measure
employee satisfaction, IAG runs a
twice-yearly Organisational Health Index
(OHI) survey to track our transformation
and culture development, and to
benchmark management practices and
leaders against a global external
framework. Alongside leadership support,
each operating company has established
teams to identify themes and incorporate
these into broader people plans.
Finally, Board members carry out
workforce engagement visits with
colleagues across our operating
companies – meeting a variety of
employees and leaders in their work
context to better understand the
challenges and opportunities of the
different businesses, employee issues
and levels of engagement. This is shared
with the Board to provide a balanced
perspective of stakeholder views and to
support broader decision-making.
Training and development
Each operating company is responsible
for the learning, development and talent
management within its business and
ensuring its workforce has the necessary
skills to support its strategy.
While training policies and programmes
are implemented at the operating
company level, all companies are
required to run mandatory corporate
training courses on topics such as the
Code of Conduct, Compliance with
Competition Laws, Anti-bribery and
Corruption Compliance, and Data
Privacy, Security, and Protection.
74,282
Employees trained
1
3,219,091
Training hours
Average Training Hours
Average training hours per employee
Collective bargaining arrangements
at 31 December 2023
United
Kingdom
Ireland
Europe
(other)
Spain
89%
96%
83%
49%
Female
Global
population
Male
55.2 hrs
39.3 hrs
45.8 hrs
C.4. Supply chain governance
Relevant standards: GRI 308-2,
GRI 414-2.
Overview
IAG Global Business Services (IAG GBS)
continues to engage with, support and
monitor suppliers to ensure all products
and services provided to IAG are on a
path to net zero by 2050.
The IAG GBS Group Procurement team
leads the Supply Chain Sustainability
Programme by delivering in four key areas:
• The Supplier Code of Conduct (SCoC);
• Independent risk screening and
sustainability assessments;
• Corporate Social Responsibility (CSR)
Audits; and
• Embedding sustainability as standard
in the procurement process.
1 Average training hours is based on the totaltraining hours performed per average headcount, pro-rated to Full Time Equivalent (FTE)
Sustainability continued
C. Principles of sustainability governance
93

Tracking metrics and progress
GRI Standard vly 2023 2022 2021 2020 2019
Total number of suppliers
308-2,
414-2
14% 15,998 14,045 13,272 22,947 27,033
Suppliers screened 14% 15,998 14,045 13,272 22,947 18,369
Suppliers with additional compliance assessments (28%) 400 557 1,510 1,818 2,912
Critical suppliers under regular risk monitoring (41%) 19 32 34 35 n/a
Independent CRS audits 19% 38 32 30 25 28
Total number of EcoVadis’ scorecards 12% 568 561 228 120 nr
Issued Supplier Code
of Conduct
All suppliers screened
for sustainability risks
Embedding
sustainability
intocategory planning
2019 2020 2021 2022 2023
Net Zero Scope 3
commitment
EcoVadis partnership
and supplier
sustainability clause
Activities in 2023
The SCoC continues to be shared with
new suppliers as part of the onboarding
process. New suppliers are requested
toacknowledge their commitment
toachieving net zero emissions by 2050,
and the need for a roadmap, supported
by deliverable plans, to achieve this target.
IAG GBS is also partnering with
EcoVadis, a market-leading provider
ofbusiness sustainability ratings,
toassess supplier scorecards with a
comprehensive methodology covering
environment, labour and human rights,
ethics and sustainable procurement.
This gives IAG and its suppliers a
baseline for improvements, and suppliers
can share them with customers and
other stakeholders, which benefits wider
industry sustainability. Once a scorecard
is shared with IAG GBS, results are
reviewed to ensure the suppliers
sustainability performance is aligned
with IAG’s vision and strategy. If a
supplier's performance score is assessed
as less than 45 (out of 100), a Corrective
Action Plan (CAP) is requested for
improvement.
IAG became a SEDEX member in 2023.
SEDEX provides data insights to help
companies improve ESG performance.
As part of the SCoC adherence and
legislation requirements under the UK
Modern Slavery Act, suppliers are
subject to third-party audit under a
labour and human rights protocol such
as the SEDEX Members Ethical Trade
Audit (SMETA) methodology. In 2023,
38 of these audits were completed. By
joining SEDEX, IAG aims to understand
information about the ethical practices
of their suppliers, including audits.
All suppliers also undergo annual
compliance screening for any legal and
financial risks. The Group Procurement
and Compliance teams assess any
suppliers identified as having potentially
higher levels of risk and implement
mitigation plans where necessary. Any
issues are flagged to the risk owners
within the Group to jointly take
appropriate action.
IAG GBS has embedded sustainability
aspects into the day-to-day operation of
the organisation and included
sustainability targets in the performance
objectives of all IAG GBS employees.
IAG GBS has verified the existing, active
supplier base and IAG's airlines’ interline
relationships in Russia and Belarus in
order to determine the potential
implications of, and actions to be taken,
due to the trade sanctions issued as a
response to the war in Ukraine. IAG has
provided operating companies with
support on mitigation actions to be
taken (e.g. payment stop/blockage).
This has been performed in coordination
with Compliance Teams.
Building a sustainable future in 2024
In 2024, IAG GBS will work to have
EcoVadis scorecards in place covering
90% of IAG’s total spend. “High-risk”
suppliers based on SEDEX’s risk
assessment will also be required to
perform an independent SMETA audit.
Related risk: Supply chain sustainability compliance
Risk and/or opportunity description
andpotential financial impact Mitigating actions
Potential breach of compliance on
sustainability, human rights or anti-
bribery by an IAG supplier resulting in
financial penalties, legal, environmental,
social and/or reputational impacts.
• IAG GBS procedures above as well as integrity, sanctions and IAG Know Your
Counterparty due diligence for higher-risk third parties
• Internal governance on supplier management to identify challenges and mitigation
• Supplier screening using external business intelligence databases which actively monitor
supplier status and flag risks including sustainability
Timeline of supply chain engagement activities
94

C.5. Ethics and integrity
governance
Relevant standards: GRI 102-16/-17,
205-1/-2/-3
Overview
All directors and employees are
expected to act with integrity and in
accordance with the laws of the
countries in which they operate.
IAG’s Code of Conduct, last revised in
2019 and approved by the Board, sets
out the general guidelines that govern
the conduct of all directors and
employees of the Group when
performing their duties in their business
and professional relationships. IAGdoes
not use Company funds orresources to
support any political party or candidate.
Mandatory Code of Conduct training
and communications activities are
carried out for directors, employees and
third parties on a regular basis to
maintain awareness and understanding
of the principles that govern the
conduct of the Group. This document is
available on the IAG website.
In 2023, a new Group Head of Ethics and
Compliance was appointed, with the
overall responsibility for developing,
maintaining and overseeing the
implementation of the enterprise-wide
IAG compliance programme, which
includes the harmonisation of the
programme across the different operating
companies and supporting an overarching
ethics and compliance culture.
IAG has in place a Group-wide
Whistleblowing Policy and a
consolidated whistleblowing channel
provided by an independent third-party
provider, Navex, where concerns can be
raised on an anonymous and confidential
basis. This channel is available to
members of staff as well as suppliers,
with information on how to access it
published in IAG’s Code of Conduct and
Supplier Code of Conduct. If any
employee has a concern about unethical
behaviour or organisational integrity,
they are encouraged to first speak with
their manager or a member of the Legal,
Compliance or Human Resource teams.
Similarly, suppliers are encouraged to
contact their primary contact within the
business. Regardless, the whistleblowing
channel is available for everyone who
wishes to report a concern.
IAG will not tolerate any retaliation
against individuals using the
whistleblowing channel or contributing
to investigations arising from reports to
the whistleblowing channel.
Whistleblowing reports received for
each operating company are triaged by
the Compliance teams to direct to the
most appropriate area for investigation,
maintaining independence in this
investigation process.
The IAG Audit and Compliance
Committee reviews the effectiveness of
the external whistleblowing channel and
internal relevant reporting channels on
an annual basis. This annual review
considers the volume of reports by
category; timeliness of follow-up;
process and responsibility for follow-up;
emerging themes and lessons; and any
issues raised of significance to the
financial statements or reputation of the
Group or other areas of compliance.
In 2023, whistleblowing reports
concerned issues relating to
employment matters (61%), dishonest
behaviour/reputation (34%), health and
safety (3%) and regulatory matters (2%).
All reports were followed up and
investigated where appropriate and
measures were implemented where
concerns were identified.
Anti-corruption and anti-money
laundering
IAG and its operating companies do not
tolerate any form of bribery or
corruption. This is made clear in the
Group Code of Conduct and supporting
policies which are available to all
directors and employees. An anti-bribery
policy statement is also set out in the
Supplier Code of Conduct.
IAG has in place a Group-wide anti-
bribery and corruption policy. This
document sets out the minimum
standards that are expected by the
Group, its directors and employees,
including definitions and guidance for
bribery, gifts and hospitality guidance,
political and charitable donations, public
officials, facilitation payments amongst
others.
Each Group operating company has a
Compliance Department, responsible for
managing the anti-bribery programme in
its business. The compliance teams from
across the Group meet regularly through
Working Groups and Steering Groups,
under the coordination of IAG’s Group
Head of Ethics and Compliance. They
conduct an annual review of bribery
risks at operating company and Group
level.
The main compliance risks identified for
2023 were unchanged from the previous
year and relate to the use of third
parties, operational and commercial
decisions involving government
agencies, and the inappropriate use of
gifts and hospitality. No material
compliance breaches were identified in
2023, as in 2022. Anti-bribery and
corruption training is mandatory for all
relevant personnel in IAG operating
companies and Group functions.
Individual training requirements are set
by each operating company and
function and are determined by factors
such as the level and responsibilities of
an employee. A Group-wide anti-bribery
e-learning module was rolled out in 2019
and is required to be completed every
three years.
To identify, manage and mitigate
potential bribery and corruption risks,
IAG uses risk-based third-party due
diligence which includes screenings,
external reports, interviews and site
visits depending on the level of risk that
a third party presents. Any risks
identified during the due diligence
process are analysed and a mitigation
plan put in place as necessary. Certain
risks could result in termination of the
proposed or existing relationship with
the counterparty. The IAG Audit and
Compliance Committee receives an
annual update on the anti-bribery
compliance programme.
There were no legal cases regarding
corruption brought against the Group
and its operating companies in 2023, as
in 2022, and management is not aware
of any impending cases or underlying
issues.
IAG has processes and procedures in
place across the Group, such as supplier
vetting and management, Know Your
Counterparty procedures and financial
policies and controls, which help to
combat money laundering and other
compliance risks across the business.
vly 2023 2022 2021 2020 2019
Employees completing anti-bribery e-learning 76% 8,574 4,880 1,404 1,984 7,933
Speak Up (whistleblower) reports 29% 324 252 164 193 nr
Sustainability continued
C. Principles of sustainability governance
95

C.6. ESG risk management
Relevant standards: GRI 102-11/-15.
Overview
Sustainable aviation risks and People,
culture and employee relations risks
arereported as principal risks to IAG.
These risks are considered and assessed
under the Group Enterprise Risk
Management (ERM) framework which
ispresented bi-annually to the Audit
andCompliance Committee and
annually to the SECR Committee and
Board. More details on this framework,
risk identification and assessment, and
risk management can be found in the
Risk management and principal risk
factorssection.
All principal risks are linked to the
Groupstrategic priorities which include
sustainability.
Sustainability risks and opportunities,
including climate-related risks and
opportunities, are also identified and
assessed by the Group Sustainability
team, in conjunction with the Group
ERM team, and presented to the IAG
CPCASO, IAG Management Committee
and SECR Committee. Plans to mitigate
risks are developed by relevant risk
owners in specific areas of the business,
with agreed initiatives included in
relevant operating company business
plans. Where risk treatments require
time to implement, short-term
mitigations are assessed and the
timeline to risk mitigation and
consequent risk acceptance discussed
and agreed by stakeholders.
People, culture and employee relations
risks are managed by the Group’s
operating companies with guidance
from the Group as appropriate.
Impact on operations and strategy
Sustainability risk assessments have
informed specific decisions related to
business operations and strategy, and
IAG allocates significant resources to
environmental risk management.
Examples include:
• In 2019, IAG designed and adopted
the industry leading Flightpath Net
Zero strategy in response to the need
for more ambitious action on climate
change. The Group maintains its
commitment to net zero emissions
by2050, and continues to invest
tomeet that strategy;
• In 2021, IAG set a new net zero target
by 2050 for Scope 3 emissions and
IAG GBS appointed EcoVadis to
helpto track supplier sustainability
performance and mitigate supply
chain-related sustainability risks;
• In 2022, IAG expanded its
commitment to invest in SAF
development, production and supply,
to manage climate policy risks and
take advantage of energy-related
opportunities; and
• As of 31 December 2023, IAG
investment in SAF production and
supply increased further to $1 billion,
of which 86% is future commitments,
as we continue to scale up the use
ofSAF in our operations. This price is
based on an assumed jet fuel price of
$800 per metric tonne and contracted
margins for SAF production.
IAG is committed to mitigating the
impacts of hazards which, if they occur,
have uncertain but potentially negative
outcomes on the environment or people.
IAG adopts precautionary measures to
mitigate these hazards, an approach
known as the precautionary principle.
For example, the precautionary principle
is applied to the planning of operations
and the development and launch of new
services IAG integrates climate
considerations into three-year business
plans and one-year financial forecasts
and aligning activities with
theFlightpath Net Zero strategy.
IAG also manages risks via the use of
ISO-14001-aligned environmental
management systems. IEnvA is the
airline industry version of ISO 14001, the
international standard for environmental
management systems. IEnvA is tailored
specifically for airlines and is fully
compatible with the International
Organization for Standardization (ISO).
The Group’s airlines completed the
certification process for the IEnvA
standard in 2023, except for Vueling
which achieved Stage 2 certification in
2022. Following this exercise, both
British Airways and Aer Lingus were
awarded Stage 2 certification in 2023.
Iberia was awarded Stage 2 certification
in January 2024. Please refer to section
A.2.3. ’Environmental Management’
formore details.
In terms of the amount of provisions and
warranties for environmental risks, IAG
and its operating companies does not
currently take out any specific insurance
to cover environmental risks.
Related risk: Environmental regulation compliance
Risk description and potential financial impacts Mitigating actions
An inadvertent breach of compliance
requirements related to ESG reporting,
emissions or waste management, or other
environmental issues, leading to fines and
potential reputational damage.
• Strengthening sustainability governance including reviews of annual disclosures via
the Audit and Compliance Committee
• Internal governance, training and assigning ownership for environmental compliance
obligations
• Maintaining IEnvA accreditation to improve internal compliance processes
96

C.7.1. Reporting and data
governance
The full contents of this sustainability
report are included in the IAG Non-
Financial and Sustainability Information
Statement (NFIS), which is third-party
independently verified to limited
assurance standards in line with
ISAE3000 (Revised)
1
standards. IAG is
working towards reasonable assurance
by 2026. Compliance with specific
frameworks and standards is listed
under relevant section headings.
IAG complies with current and emerging
standards on sustainability reporting.
These include obligations under EU
Directive 2014/95/EU on non-financial
reporting and its transposition in the
UKand Spain, the 2018 UK Streamlined
Energy and Carbon Reporting
regulation, the Task Force on Climate-
related Financial Disclosures (TCFD),
and the EU Taxonomy Regulation
(2020/852).
IAG aligns with selected GRI standards
based on compliance with Spanish Law
11/2018. In cases where GRI alignment
was not possible, other standards
aligned to airline industry guidance or
internal frameworks were used and
described.
Emissions data from intra-European
flights is also independently verified
within six months of the year end, for
compliance with the UK and EU ETS,
and for all flights for the UN CORSIA
scheme. Any material changes to key
metrics are highlighted in future Annual
Reports.
IAG also goes beyond compliance
requirements and voluntarily aligns
sustainability reporting with the
Sustainability Accounting Standards
Board (SASB), the IATA Airlines
Reporting Handbook, GRI Standards
formaterial issues, and relevant criteria
from external ESG rating agencies.
IAGsupported IATA and the GRI
todevelop the IATA handbook.
The scope of environment performance
data in this report includes all IAG
airlines, subsidiaries and cargo
operations over which IAG has
operational control. This is also the
scope of the net zero targets. Some
exceptions for non-material business
units have been applied for specific
metrics, and these are clearly stated
withrationale provided.
The scope of workforce and ethics and
integrity data includes all IAG operating
companies and support functions. Some
exceptions have been applied and these
are clearly stated with rationale
provided.
The scope of human rights and modern
slavery reporting is as above and
includes data from all suppliers in the
IAG supply chain.
For any specific cases where full-year
data was not available for selected
metrics, estimates have been applied
based on business forecasts and data
from prior months. Internal governance
is in place to ensure that any estimations
made are robust. Any prior-year
restatements are indicated next to
relevant metrics with reasons provided.
C.7.2. Alignment with GRI and SASB standards
Sustainability section Sustainability subsection GRI SASB
A.1. Planet –
climate change
A.1.3. Metrics and progress 305-1/2/3/4/5, 301-1, 302-1 TR-AL-110a.1.
A.1.4. Emissions reduction initiatives 305-5 TR-AL-110a.2.
A.1.7. Stakeholder engagement 102-13/-43/-44
A.2. Planet –
widerissues
A.2.1. Waste 306-1/-2/-3 (2020)
A.2.2. Noise and air quality 305-7
B. People and
prosperity
B.2. Workforce metrics 102-7/8, 401-1, 405-1, 102-41, 404-1, 403-9 TR-AL-310a.1.
B.6. Community engagement and charitable support 102-13, 201-1
C. Principles of
sustainability
governance
C.2. Governance frameworks 102-46/-48
C.3. Workforce governance 403-4, 408-1, 409-1
C.4. Supply chain governance 308-2, 414-2
C.5. Ethics and integrity 102-16, 102-17, 205-1/-2/-3
C.6. ESG risk management 102-11, 102-15
1 ISAE3000 is the assurance standard for compliance, sustainability and outsourcing audits, issued by the International Federation of Accountants
(IFAC).
Sustainability continued
C. Principles of sustainability governance
97

Agile risk management helping
toprotect the Group as it delivers
its strategic plan
Enterprise risk policy and framework
The Group has an enterprise risk
management (ERM) framework
underpinned by an ERM policy, which
has been updated in accordance with
Spanish corporate law and governance
and UK corporate governance
requirements and has been re-approved
by the Board in 2023. This sets out a
comprehensive risk management
process and methodology to ensure a
robust identification and assessment of
the risks facing the Group, including
emerging risks. The risk management
framework is embedded across all of the
Group’s businesses. Enterprise risks are
defined as any risk that could impact the
three-year strategic business plan (“the
plan”). They are assessed and if the
impact is above a threshold, plotted on
an enterprise risk heat map, based on
probability and impact. Consideration
isgiven to changes in the speed of
potential impact and how principal risks
influence other principal risks to help
assess where key mitigations can have
agreater effect on reducing overall risk
to the business. Risks are also
considered in combining events where
anumber of risks could occur together.
This process is led across the Group
bythe IAG Management Committee
supported by the ERM function.
Although the Group considers enterprise
risks that could impact the plan (defined
as the short term), it also considers
potential risks that could impact over
the medium term of up to five years and
in the longer term, beyond five years.
Risk outcomes are quantified as the
potential cash impact to the plan over
three years. Non-cash outcomes that
could impact our customers, employees,
reputation, sustainability targets or our
regulatory obligations are considered
forevery risk.
Key controls and mitigations are
documented, including appropriate
response plans. Where risk treatments
require time to implement, short-term
mitigations are assessed and the
timeline to risk mitigation and
consequent risk acceptance discussed
and agreed.
Every principal risk has clear
Management Committee oversight
atthe Group level and in each business.
Risk management and principal risk factors
98

IAG has a risk appetite framework which
includes statements informing the
business, either qualitatively or
quantitatively, of the Board’s appetite
for certain risks. Each risk appetite
statement applies either on a Group-
wide basis or for specific programmes,
initiatives or activity within the Group.
In the second half of 2022, the Board
assessed its appetite across a number of
critical strategic priorities to set
tolerances for the Group for 2023. This
approach allows tolerances to be set
more dynamically across the plan period
and aligns to the Group strategy as
approved by the Board, which set the
level of ambition and investment across
the plan period. The exercise allowed the
Board to discuss and consider the
trade-offs within the plan and ensure
that it was satisfied that management
had set the appropriate prioritisation
ofinitiatives to seek opportunities and
manage risk within its defined appetite
tolerances. This framework and
tolerances have been in place
throughout the year, with the Board
assessing its appetite across all of the
framework statements at year end
against the Group’s performance and
itsanticipated delivery of the Board-
approved strategic business plan
priorities and initiatives.
The Board is satisfied that the Group
continued to perform and deliver
initiatives throughout 2023 as planned
to mitigate risk as set out in its
framework statements and where
further action has been required, the
Board has considered potential
mitigations and, where appropriate or
feasible, the Group has implemented or
confirmed plans that would address
those risks or retain them within the
Board’s determined Group risk appetite.
In the second half of 2023, following the
Board strategy review, the Board
re-assessed its appetite for key risk
areas, taking account of changes in the
risk landscape since the prior year
exercise, for the upcoming plan period.
Regular re-assessment and confirmation
of the risk appetite of the Board ensures
its relevance and ongoing alignment to
the Group strategic priorities and allows
the Group to take appropriate risks to
deliver the plan.
Emerging risks
Where emerging risks and longer-term
threats that the Group or the industry
could face are identified, they are
managed within the overall risk
framework as “on watch” until they are
re-assessed to be no longer a potential
threat to the business or where an
assessment of the risk impact over
theplan period can be made, and
appropriate mitigations can be put in
place or the risk becomes a principal
risk. Other high-impact, low-likelihood
risks are also considered.
Agility in risk management
The Group’s ERM framework continues
to adapt and evolve to the needs of the
business and our stakeholders. This
allows the Group and its businesses to
both respond to changes in the external
risk environment and support the pace
and scale of business transformation,
recognising the Board’s appetite for risk.
During the year, management across the
Group have reviewed the
macroeconomic and geopolitical
landscape to identify emerging risks and
implications for existing principal risks as
well as competition and market risk
changes, particularly those that could
impact operational resilience, our
sustainability ambitions or the Group’s
transformation, innovation and change
agenda. By continuing to develop
theGroup’s assessment of the
interdependencies of risks, using
scenarios to quantify risk impact under
different combinations and assumptions,
and considering the risks within the
Group’s risk environment that have
increased or changed in their nature,
either as a result of external factors or
decisions within the Group’s businesses,
its Board and management are better
informed and can react more quickly.
New guidance from regulators and
investors is reviewed on an ongoing
basis and best practice sought from
other risk management sources.
Viability assessment
The Board’s assessment of the viability
of the Group is directly informed by the
outputs of the ERM framework. Full
details of our approach, scenarios
modelled and the viability assessment
are shown at the end of this report.
The IAG Board has overall
responsibility for ensuring that
the Group has an appropriate,
robust and effective risk
management framework.
Risk appetite
Risk management and principal risk factors continued
99

Risk management roles and responsibilities
The IAG Board has overall
responsibility for ensuring that
the Group has an appropriate,
robust and effective risk
management framework,
including the determination
ofthe nature and extent
ofrisk it is willing to take to
achieve its strategic
objectives.
The IAG Audit and
Compliance Committee
discusses risk and considers
the risk environment regularly
throughout the year, as does
the IAG Board as part of wider
Board discussions, in addition
to the IAG Audit and
Compliance Committee’s
bi-annual risk heat map
review, including a review of
the assessment of the Group’s
performance against its risk
appetite for the financial year,
scenarios for assessment of
viability and theoutputs from
the viability modelling. The
Audit and Compliance
Committee has early sight of
management consideration of
viability scenarios to enable it
to challenge subjectivities and
confirm rationale. It then
reviews the outputs at year
end and makes
recommendations on the
viability assessment and
statement to the Board.
The IAG Board reviews the
Group’s risk heatmap annually
and it has completed a robust
assessment of the Group’s
emerging and principal risks in
the year.
The IAG Board sets risk
appetite for the plan period.
Across the Group, risk owners
are responsible for identifying
potential risks and
appropriately managing
decisions within their area of
responsibility that could
impact business operations
and delivery of the plan.
As the Group undertakes
transformation activities within
its operating companies,
thepace and agility of the
changes required create risks
and opportunities. For
transformational risks,
business owners are assigned,
and the business will agree
appropriate mitigations and
timelines for implementation,
following discussions with all
relevant stakeholders.
Emerging risks are assessed
and risk owners consider and
identify any potential impact
to plans. Longer-term ‘on
watch’ risks are subject to
review as part of the
framework.
Management is responsible for
the effective operation of the
internal controls and execution
of the agreed risk mitigation
plans.
The IAG Management
Committee reviews risks
during the year, including the
Group risk heat map semi-
annually in advance of reviews
by the Audit and Compliance
Committee, in accordance
with the 2018 UK Corporate
Governance Code and the
Spanish Good Governance
Code for Listed Companies.
At the year end, the IAG
Management Committee
reviews the performance of
the Group during the full year
against the risk appetite
framework and reports any
near tolerance or out of
tolerance assessments to the
Audit and Compliance
Committee.
The IAG Management
Committee recommends
severe but plausible scenarios
for stressing the strategic
business plan as part of the
annual Group viability
assessment.
IAG Board and Audit
and Compliance
Committee
Risk owners
and management
Operating companies’
management
committees
IAG Management
Committee
Risk heat maps for each
operating company and
central functions are reviewed
semi-annually by their
operating company’s
management committee or
function leadership team.
Where the Group’s operating
companies have a reliance on
other parts of the Group for
services delivery, risks are
reflected appropriately across
risk heat maps to ensure
accountability is clear.
They escalate risks that have a
Group impact or require Group
consideration in line with the
Group ERM framework.
They confirm to their
operating company board and
audit committees, where they
exist, as to the identification,
quantification and
management of risks within
their operating company at
least annually.
Local risk heat maps are in
place for subsidiary
businesses, together with
Group support platforms
including Group Procurement
and Services and IAG Tech.
Enterprise Risk Management
function
The Enterprise Risk Management
function provides support across the
Group to ensure risk management
processes areappropriately embedded
and applied consistently, as well as
working with management to identify
risk, challenge assessments and
strengthen the risk culture across the
Group. The function provides risk
management guidance and shares
best practice across the Group and its
operating companies, keeping them
informed of any risk-related regulatory
developments. The function is
responsible for ensuring that the ERM
framework remains agile and
responsive to meet the needs of the
business and its stakeholders.
The ERM function works with other
compliance and Group functions, such
as Group Finance, Government Affairs,
InvestorRelations, Legal, Ethics and
Compliance, and Sustainability,
leveraging their frameworks and
assessments where appropriate.
Riskassessments form an important
input into the Internal Audit planning
and delivery process.
100

Key for principal risk factors table
The highly regulated and commercially
competitive environment, together with
the businesses’ operational complexity,
expose the Group to risks, where its
influence and ability to directly manage
the risks may be limited.
Examples include aircraft and
component availability, and engine
performance and reliability; the wider
ongoing fundamental weaknesses in the
resilience of the aviation sector’s supply
chain; air traffic control (ATC) resilience
and industrial unrest in third parties
impacting operations; and policy
measures taken by governments to
address the economic environment or
policy proposals that could impact the
Group’s airlines’ ability to set capacity
and/or pricing.
Principal risks influence
The relative level of influence each principal risk has on the
other principal risks
Principal risk radar
The assessed likelihood of risk materialisation for each
principalrisk
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Business and
operational
risks
Strategic
risks
Financial
risks
Compliance
and regulatory
risks
Influence of risk
1
2
3
4
6
7
Business and
operational
Strategic
Financial
Compliance
and regulatory
8
9
10
11
12
13
14
15
16
Low High
5
Stakeholder
impact
Customers Employees Suppliers Shareholder,
lenders
andother
financial
stakeholders
Governments
and regulators
Strategic
imperatives
Strengthening
our core
Driving earnings
growth through
asset-light
businesses
Operating under
a strengthened
financial and
sustainability
framework
Other external threats which remain
heightened include: the impact of
inflation and interest rates on demand
and customer confidence; higher costs
in the supply chain; and the impact of
escalating and ongoing geopolitical
tensions and conflict in various regions
impacting our customers and flight
operations as well as creating further
airspace restrictions.
In assessing its principal risks, the Group
has considered its operational resilience
across its businesses, the status of the
financial markets, customer mix changes,
political risk and government changes,
including upcoming elections, pace of
transformation, artificial intelligence (AI)
adoption, the Group’s industrial relations
landscape and people engagement and
securing talent and expertise to support
operations and deliver cultural change.
No new principal risks were identified
through the risk discussions in the year.
One risk has been reconsidered as part
of the reviews and has been reframed
as‘Transformation, innovation and AI’
from ‘Transformation and change’ to
recognise how the Group’s change
agenda is underpinned by investment
which will leverage innovation and AI
tools to accelerate the delivery of
customer-centric, efficient processes
and tools to run our businesses.
The risk around ‘Critical third parties in
the supply chain’ is now assessed under
Business and Operational risk given the
nature of the potential impacts facing
the Group (having previously been
categorised as a Strategic risk).
Year in review
Principal
risk number
1
Risk
trend
Increase
Stable
Decrease
Risk management and principal risk factors continued
101

Principal risk
Principal risk factor table
Strategic
imperatives
Stakeholder
impact
Risk trend
2023 2022
Viability
scenario
Strategic
Financial risk including tax
Compliance and regulatory
1
1
32
2
4
Business and operational
1
Brand and customer trust
Chief Commercial Strategy Officer/Operating
company CEOs
2
Competitive landscape
Chief Commercial Strategy Officer
3
Economic, political and regulatory environment
Chief Commercial Strategy Officer
4
Sustainable aviation
Chief People, Corporate Affairs and
Sustainability Officer
1
1
1
1
3
3
3
2
2
2
4
4
5
Critical third parties in the supply chain
Chief Information, Procurement, Services
andInnovation Officer
6
Cyberattack and data security
Chief Information, Procurement, Services
andInnovation Officer/Operating company CEOs
7
IT systems and IT infrastructure
Chief Information, Procurement, Services and
Innovation Officer/Operating company CEOs
8
Operational resilience
Chief Information, Procurement, Services and
Innovation Officer/Operating company CEOs
9
People, culture and employee relations
Chief People, Corporate Affairs and Sustainability
Officer/Operating company CEOs
10
Safety or security incident
Operating company CEOs
11
Transformation, innovation and AI
Chief Information, Procurement, Services and
Innovation Officer/Chief Transformation and
Corporate Development Officer
12
Debt funding
Chief Financial Officer
13
Financial and treasury-related risk
Chief Financial Officer
14
Tax
Chief Financial Officer
15
Group governance structure
General Counsel
16
Non-compliance with key regulation and laws
General Counsel
102

Principal risk register
1
Brand and customer trust
Chief Commercial Strategy Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
2 3 4
Strategic relevance Status
• The Group’s brands are positioned in their
respective markets to meet their customer
propositions and deliver commercial value. Any
change in engagement or travel preferences
could impact the financial performance of the
Group.
• IAG will continue to focus on its customer
propositions to ensure competitiveness in its
chosen priority customer demand spaces and to
ensure that it adapts to meet changing customer
expectations.
• The Group is clear on the key levers to improve
brand perception and satisfaction for each of its
operating company brands.
The Group’s ability to attract and secure bookings and generate revenue
depends on customers’ perception and affinity with the Group airlines’
brands and their associated reputation for customer service and value. The
Group airlines’ brands are, and will continue to be, vulnerable to adverse
publicity regarding events impacting service and operations. Operational
resilience and customer satisfaction underpin customer trust. Reliability,
including on-time performance (OTP), service and product delivery, are key
elements of brand value and of each customer’s experience. Investment in
cabin and service propositions helps ensure that our customers choose to
fly with the Group’s airlines.
The Group continues to improve its disruption management capabilities
given the extent of the external disruption due to ATC and third-party
resilience issues, particularly over engine reliability. IAG remains focused on
strengthening its customer-centricity and all of the Group’s airlines continue
to support their customers through any disruption including schedule
adaptions where required. The Group continues to ensure that its operating
companies continue to adapt and focus their business models, products and
customer propositions to meet changing customer expectations and needs
(including those with additional needs). Customer sentiment to travel and
their expectations when they travel are intrinsic to brand health. The
resilience and engagement of our people as customer service ambassadors
to deliver excellent customer service is critical to retaining brand and
customer trust.
Risk description Mitigations
• Erosion of the brand and customer trust through
poor customer service or lack of reliability in
operations, may adversely impact the Group’s
leadership position with customers and
ultimately affect future revenue and profitability.
• If the Group is unable to meet the expectations
of its customers and does not engage effectively
to maintain their emotional attachment, then the
Group may face brand erosion and loss of
market share.
• Failure to meet customer expectations on
sustainability and the Group’s impact on
stakeholders and society could impact the Group
and its brands.
• All IAG airlines are considered within the brand portfolio review.
• Brand initiatives for each operating company have been identified and are
aligned to the Group’s business plan.
• Product investment to enhance the customer experience supports the
brand propositions and is provided for in the plan.
• All airlines track and report to IAG on their OTP and Net Promoter Score
(NPS) to measure customer satisfaction.
• Reviews of resilience, resourcing levels and schedule operability.
• Enhanced disruption management tools within airlines to allow customers
to manage their travel preferences.
• Increased focus on the end-to-end customer journey from flight search
through to arrival and baggage reclaim.
• The Group’s global loyalty strategy builds customer loyalty within IAG
airlines.
• The Group’s focus on sustainability and sustainable aviation including the
IAG climate change strategy to meet the target of net zero carbon
emissions by 2050.
• Robust portfolio process to determine the right investments across the
Group.
• Additional focus on customer feedback and proactive customer care.
Strategic
Guidance is provided below on the key
risks that may threaten the Group’s
business model, future performance,
solvency andliquidity.
Risks are grouped into four categories:
strategic risk, business and operational
risk, financial risk including tax, and
compliance and regulatory risks.
Where there are particular
circumstances that mean that the risk
ismore likely to materialise, those
circumstances are described below.
Additional key business responses
implemented by management are also
setout.
The list is not intended to be exhaustive
but does reflect those risks that the
Board and IAG Management Committee
believe to be the most likely to have a
potential material impact on the Group
during the plan period.
Risk management and principal risk factors continued
103

2
Competitive landscape
Chief Commercial Strategy Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• The markets in which the Group operates are
highly competitive. The Group faces direct
competition on its routes, as well as from
indirect flights, charter services and other
modes of transport. Some competitors have
other competitive advantages such as
government support or benefits from insolvency
protection.
• Regulation of the airline industry covers many of
the Group’s activities including route flying
rights, airport landing rights, departure taxes,
security and environmental controls. The
Group’s ability to comply with and influence
changes to regulations is key to maintaining
operational and financial performance.
The demand environment in the year has seen the restoration of capacity
into the market, with some markets exceeding pre-pandemic capacity levels.
The distortionary effects of government policy and/or aviation-specific
taxation or other regional or country-specific measures on the competitive
landscape, continue to be assessed. The Group is investing in new fleet and
products to maintain its competitive position in the markets in which its
airlines operate.
IAG supports the use of the Worldwide Airport Slots Guidelines system,
formulated by the International Air Transport Association (IATA), that
encourages competition but also supports reliable, established networks. The
Group responded to relevant consultations to inform regulators and to
propose balanced regulation and avoid introducing additional rules that
hamper the competitiveness of the industry.
In February 2023, IAG agreed the acquisition of the remaining 80% of Air
Europa, subject to relevant regulatory approvals.
The Group continues to consult and keep different stakeholders informed
over the impacts of government policies on aviation or policy asymmetry,
such as increases in Air Passenger Duty (APD) or distortionary policies on
carbon offsets.
Risk description Mitigations
• Competitor capacity growth in excess of
demand growth could materially impact
margins.
• Any failure of a joint business or a joint business
partner could adversely impact the Group’s
airline business operations and financial
performance.
• Some of the markets in which the Group
operates remain regulated by governments, in
some instances controlling capacity and/or
restricting market entry. Changes in such
restrictions may have a negative impact on
margins.
• Regulatory or policy changes may create
competitive distortion, impacting the Group’s
airlines and their competitiveness or business
model.
• The IAG Management Committee meets weekly and undertakes regular
operating company-specific reviews.
• The Board discusses strategy throughout the year and dedicates two days
per year to undertake a detailed review of the Group’s strategic plans.
• The Group strategy function supports the IAG Management Committee by
identifying where resources can be devoted to exploit opportunities and
accelerate change.
• The airlines’ revenue management departments and systems optimise
market share and yield through pricing and inventory management
activity.
• The Group maintains rigorous cost control and targeted investment to
remain competitive.
• The Group Procurement function reviews all critical contracts.
• The Group’s airlines are focused on customer-centricity and operational
resilience.
• The portfolio of brands provides flexibility as capacity can be deployed at
short notice as needed.
• The IAG Management Committee regularly reviews market share and the
commercial performance of joint business agreements.
• The Group’s airlines review their relationships with business partners,
supported where appropriate by the Group strategy function.
• The Group’s Government Affairs function monitors government initiatives,
represents the Group’s interest and forecasts likely changes to relevant
laws and regulations and responds to consultations on regulatory change
or policy that could impact the aviation industry or create competitive
distortion.
Strategic
See Financial review section
104

3
Economic, political and
regulatory environment
Chief Commercial Strategy Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• IAG remains sensitive to political and economic
conditions in the markets globally, particularly in
our hub markets. All of the following can be
influenced by political and economic change:
• Business and leisure demand for travel;
• Inflation impacts on the cost base;
• Access to markets for new or existing routes;
• Increasing levels and costs of regulation;
• Supply of products;
• Availability of services and/or resource;
• Ability to fly scheduled operations; and
• Pricing and pricing over ancillaries.
The economic impact of geopolitical events coming after the energy crisis
last winter, increases in commodity and wage costs from inflation and higher
interest rates drive continued significant uncertainty over the economic
outlook. The Group is closely reviewing the impacts of wage and supplier
inflation on margins and customer demand.
The re-opening of China at the beginning 2023 and removal of remaining
restrictions in countries, post the pandemic, has simplified operations and the
customer experience at airports. However ongoing conflicts, wars and
heightened tensions across the Middle East further increase airspace
restrictions and congestion for flows to Asia.
Wider macroeconomic trends are being monitored such as a potential
economic recession and tone of dialogue between the US, Russia, China and
the EU and UK which can influence markets and result in imposition of
misaligned policies or tariffs. The trend of increased nationalism and the
potential impact to the Group is also kept under review. Recent supply chain
disruptions have occurred in many markets and the level of disruption and
potential impacts are considered across the Group. The Group also considers
changes in government in key markets and the implications for trade,
respective economic health and how governments view the aviation industry,
with elections expected in the UK, Ireland and the US over the next year.
Developments in relevant international relationships, where they affect air
services agreements to which the EU or UK are party, are monitored
throughout the year and the Group’s positions advocated with the relevant
national governments. Recent government proposals to set floor or ceiling
caps on pricing, including the scope of ancillaries that airlines may be allowed
to charge their customers for, may impact the ability to freely set pricing, sell
ancillaries to meet customer needs and/or set capacity.
IAG has worked through trade associations, IATA, as well as national
governments to put its case on issues of the importance of aviation to
international trade and customer connectivity and the value that it brings.
Any further macroeconomic trends or potential requirements arising from
Brexit are monitored by the IAG Government Affairs function.
Risk description Mitigations
• Economic deterioration or structural change in
either a domestic market, key customer
segment or the global economy may have a
material impact on the Group’s financial position,
while foreign exchange, fuel price and interest
rate movements create volatility.
• Failure to adequately plan for and be able to
respond to uncertainty driven by geopolitical or
market events or health-related concerns
impacts the operations, costs and customers of
the Group.
• Changes in government may result in a change
in sentiment to aviation and access to markets.
• Government policy asymmetry impacting a
domestic market could increase the burden of
regulation and cost to our passengers.
• The IAG Board and the IAG Management Committee review the financial
outlook and business performance of the Group through the monthly
trading results, financial planning process and the quarterly reforecasting
process.
• Reviews to assess and drive the Group’s financial performance through the
management of capacity, together with appropriate cost control measures
including the balance between fixed and variable costs, management of
capital expenditure, and actions to improve liquidity.
• External economic outlook, fuel prices and exchange rates are carefully
considered when developing strategy and plans and are regularly
reviewed by the IAG Board and IAG Management Committee as part of
business performance monitoring.
• The Group’s Government Affairs function monitors government initiatives,
represents the Group’s interest and gives the Group and its operating
companies early sight of likely changes to laws and regulations.
• The Group engages with its regulators, governments and other political
representatives and trade associations to help represent the views and
contribution of the Group and aviation to society and economies.
• The Group’s airlines have increased their focus on enhanced disruption
management tools within airlines to increase operational resilience to
restrictions e.g. capacity constraints at airports or health-related measures.
Strategic
See the Regulatory environment section
Risk management and principal risk factors continued
105

4
Sustainable aviation
Chief People, Corporate Affairs
andSustainability Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1 2 4
Strategic relevance Status
• IAG is playing a leading role and working with
industry to accelerate aviation decarbonisation.
This means that environmental considerations
are integrated into the business strategy at
every level and the Group uses its influence to
drive progress across the industry.
• Our stakeholders and potential investors seek
confirmation over our sustainability agenda and
may link their purchasing, investment or lending
decisions to our commitments and progress
against them.
• Our customers look to ensure that our airlines
allow them to minimise their carbon footprint.
IAG is committed to a target of net zero carbon emissions across its
operations and supply chain by 2050, along with 2030 targets. The
Procurement function will have a key role to play in ensuring its delivery of
the Scope 3 commitment for the Group with supplier sustainability ratings
and sustainability clauses in supplier contracts key considerations for future
contract negotiations and renewals. IAG has also committed to 10%
Sustainable Aviation Fuel (SAF) usage on average across its fleet by 2030.
Plans implemented by the EU, UK and US governments to decarbonise
aviation have resulted in fragmentation of policy measures and support
offered by governments for green initiatives across the different regions in
which the Group airlines operate. SAF infrastructure and availability lags
demand, impacting the ability to achieve the aviation industry’s carbon
reduction commitments. Mandates and other tax-based measures may
disproportionately impact the Group’s airlines versus their competitors. All of
the Group’s airlines have agreed new deals for the production of SAF to
meet the Group’s target on the path to decarbonisation. Overall aviation
industry requirements will require infrastructure investments across markets
to support the production of SAF to meet demand expectations.
The Group continues to model potential impacts and costs, which includes
the removal of aviation jet fuel tax exemption, with mitigation plans
embedded into strategic and financial planning.
IAG was an early adopter of the Task Force on Climate-related Financial
Disclosures (TCFD) guidelines for climate-related scenario analysis and
climate-specific risk assessments. The Group continues with its assessment
of climate-related risks, by testing and revising the assumptions on updated
forecasts for future business growth and the regulatory context and future
carbon pricing. The Group has also embedded forecasting of its climate
impacts into its strategic, business and financial planning processes and has
assessed that it is resilient to material climate-related impacts.
Risk description Mitigations
• Increasing global concern about climate change
and the impact of carbon affects Group airlines’
performance as customers seek alternative
methods of transport or reduce their levels of
travel.
• New taxes, the potential removal of aviation jet
fuel exemptions and increasing price of carbon
allowances impact on price and demand.
Customers may choose to reduce the amount
they fly.
• The airline industry is subject to increased
regulatory requirements and policy asymmetry
driving costs, distortion and operational
complexity, as well as the potential for sub-
optimal outcomes for the planet.
• Demand exceeds supply to meet sustainable
fuel mandates or infrastructure and production
is not available in the markets the Group airlines
serve.
• SAF policy fragmentation results in different
in-scope allowances across markets, distorting
the competitive environment and levels of
carbon costs.
• Increasing severity of weather events results in
operational and customer disruption.
• IAG climate change strategy to meet target of net zero carbon emissions
by 2050.
• Annual incentive plans link manager bonuses to annual carbon intensity
targets.
• All of the Group’s airlines have platforms for customers to contribute
towards mitigating their flight emissions over time, including contributing
towards SAF or projects which remove carbon from the atmosphere.
• Embedded climate impacts into the financial statements, balance sheet,
financial forecasting and other relevant disclosures.
• IAG investment in SAF with operating companies continuing to secure
mid- and long-term supply agreements.
• IAG actively monitors the delivery of SAF procured.
• Fleet replacement plan is introducing aircraft into the fleet that are more
carbon efficient.
• Reporting on sustainability performance in the IAG supply chain to better
mitigate supply chain-related sustainability risks.
• Partnering with ZeroAvia to explore hydrogen-powered aircraft
technology.
• Participating in CORSIA, the ICAO global aviation carbon offsetting
scheme and the EU-ETS and UK-ETS emission trading schemes.
• Horizon scanning for potential partners and technology.
• Engagement across UK, EU and global trade associations to shape
effective climate policy and drive support for low-carbon solutions.
Strategic
See the Sustainability risks and opportunities section
106

5
Critical third parties
inthe supply chain
Chief Information, Procurement,
Servicesand Innovation Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
2
Strategic relevance Status
• Any sub-optimal service delivery or asset
supplied by a critical supplier can impact on the
Group airlines’ operational and financial
performance as well as disrupting our customers
and impacting our brand and reputation.
• Infrastructure decisions or changes in policy
bygovernments, regulators or other entities
could impact operations but are outside
theGroup’s control.
• London Heathrow has no spare runway capacity.
• An uncontrolled increase in the planned cost
ofexpansion of a hub airport, particularly
London Heathrow, could result in increased
landingcharges making the airport
uncompetitive versus other European hubs.
• Airport charges represent a significant
operatingcost to the airlines and have
animpact on operations.
• Inflationary cost pressures within the supply
chain may increase the cost of travel.
The aviation sector continues to be affected by global supply chain
disruption which has impacted aircraft deliveries, engine and component
availability and reliability, resource availability and/or threat of employee
industrial action in critical third parties and airport services, the level of
resilience of airports, particularly London Heathrow, and ATC capability and
restrictions. In August, a failure of UK national ATC services impacted flight
operations across the UK.
The Group proactively assesses its schedules for operability and continues to
work with all critical suppliers to understand any potential disruption within
their supply chains from either a shortage of available resource, strike action
or production delays which could impact the availability of new fleet, engines
or critical goods or services. Delays in new aircraft and spare engines, and
technical performance issues requiring additional maintenance continue to
impact operations and turnaround times for aircraft. This has led to increased
costs to secure such services. Focus has been placed on key suppliers given
the inflationary environment impacting wages and costs of goods, to
understand any business or operational continuity impacts, and where
possible identify other suitable suppliers. The Group has been impacted by
reliability and performance of GTF engines, which is mitigated with
replacement aircraft and remedy support from the engine manufacturer.
Many elements of the supply chain remain outside of the Group’s ability to
directly manage, including aircraft deliveries and availability of components,
airport performance and ATC resilience.
The Group continues to consult stakeholders and raise awareness of the
negative impacts of ATC airspace restrictions and performance issues on the
aviation sector and economies across Europe, particularly with the capacity
recovery and continued closure of airspace driven by geopolitical events.
The Group relies on the provision of airport infrastructure and is dependent
on the timely delivery of appropriate facilities. The Group continues to
challenge unreasonable levels of increases in airport charges, especially at
LondonHeathrow.
Risk description Mitigations
• IAG is dependent on the timely entry of new
aircraft and the engine performance of aircraft
to improve operational efficiency and resilience
and meet the commitments of the Group
sustainability programme.
• IAG is dependent on the timely, on-budget
delivery of infrastructure changes, particularly
atkey airports.
• IAG is dependent on resilience within the
operations of ATC services to ensure that its
flight operations are delivered as scheduled.
• IAG is dependent on the performance and costs
of critical third-party suppliers that provide
services to our customers and the Group such
as airport operators, border control and
caterers. Increases in costs or where suppliers
face ongoing financial stress or restructuring
where they exit the market for supply of
services may impact the Group’s operations.
• IAG is dependent on the availability and
production of alternative fuels to meet its
carbon commitments. This may require
investments in infrastructure in the markets
inwhich the Group operates.
• The Group mitigates engine and fleet performance risks, including delays to
delivery and unacceptable levels of carbon emissions, to the extent possible
by working closely with the engine and fleet manufacturers, as well as
retaining flexibility with existing aircraft return requirements and aircraft
lessors.
• The Group engages in regulatory reviews of supplier pricing, such as the
UKCivil Aviation Authority’s periodic review of charges at London Heathrow
and London Gatwick airports.
• The Group is active at an EU policy level and in consultations with airports
covered by the EU Airport Charges Directive.
• The Group proactively works with suppliers to ensure operations are
maintained and the impact to their businesses understood, with mitigations
implemented where necessary and inflation minimised.
• The Group Procurement function has oversight of all critical contracts
across the Group’s businesses.
• Alternative suppliers are identified where feasible.
• Transformation initiatives to offset inflation.
Business and operational
Risk management and principal risk factors continued
107

6
Cyberattack and datasecurity
Chief Information, Procurement,
ServicesandInnovation Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
3
Strategic relevance Status
• The cyber threat environment remains
challenging for all organisations, including the
airline industry. Cyber threat actors, criminals,
foreign governments and hacktivists have the
capacity and motivation to attack the airline
industry for financial gain and other political
or social reasons.
• The fast-moving nature of this risk means
that the Group will always retain a level
ofvulnerability.
The risks from cyber threats continue as threat actors seek to exploit any
weaknesses in defences particularly through social engineering and human
behaviours. The threat of ransomware attacks on critical infrastructure and services
remains high and increased in the year with heightened geopolitical tensions, with
the Group exposed to threat actors targeting IAG, its operating companies and its
suppliers. The Group continues toimprove its cybersecurity posture either through
major IT transformational change or additional monitoring through tools.
In the first half of the year, some of the Group’s businesses were impacted by an
attack on a third-party services provider holding employee data. The Group is
focused on improving its cybersecurity posture and better understanding the risk
presented by its suppliers.
The regulatory regimes associated with data and infrastructure security are also
becoming more complex with different regulators applying different framework
approaches and guidance for reporting. The Group airlines are subject to the
requirements of privacy legislation such as GDPR and the National Information
Security Directive (NISD).
The emergence and usage of AI to bypass cybersecurity controls, produce
phishing emails and malware has also accelerated attempts to access
organisations’ systems and data and increases the threat and scale of social
engineering attacks.
Investment in cybersecurity systems and controls continues as planned, although
addressing the risk is also dependent on business capacity and the delivery
ofsolutions to address technical obsolescence within IAG Tech. All planned
investment is linked to a Group-wide maturity assessment based on the National
Institute of Standards and Technology (NIST) cybersecurity framework, a leading
industry standard benchmark. Data centre migration activity to the cloud across
the Group’s airlines will further help to improve the security controls environment.
As the Group improves its security posture and maturity, it better understands
the rapid nature of potential attack vectors and how to detect them.
Risk description Mitigations
• The Group could face financial loss,
disruption or damage to brand reputation
arising from an attack on the Group’s
systems by criminals, foreign governments
orhacktivists.
• If the Group does not adequately protect
customer and employee data, it could breach
regulations and face penalties and loss
ofcustomer trust.
• Changes in working practices and
environments for the Group’s employees
andthird-party suppliers could result in new
weaknesses in the cyber and data security
control environment.
• The Group has a Board-approved cyber strategy that drives investment and
operational planning.
• A cyber risk management framework ensures the risk is reviewed across all
operating companies.
• The IAG Cyber Governance board assesses the portfolio of projects quarterly
and each operating company reviews its own portfolio at least quarterly.
• The IAG Chief Information, Procurement, Services and Innovation Officer
(CIPSIO) provides assurance and expertise around strategy, policy, training
and security operations for the Group.
• Detection tools and monitoring are in place. The Group-wide security
engineering and operations teams proactively seek to identify and respond to
threats and vulnerabilities, including ongoing testing of the Group’s defences.
• External attack surface monitoring and threat intelligence is used to analyse
cyber risks to the Group.
• External benchmarking on cyber posture with independent assessment in the
year by a specialist third party.
• Regular cyber awareness training run by the operating companies, including
annual mandatory training on cyber risk and data protection for all staff.
• Oversight of critical systems and suppliers to ensure that the Group understands
the data it holds, that it is secure, and regulations are adhered to.
• Data Protection Officers are in place in all operating companies, coordinated
through a Group-wide Privacy Steering Group.
• Working practices reviewed to ensure integrity of cyber and data security.
• All suppliers must adhere to IAG security requirements. A Group-wide
third-party risk management process integrates cybersecurity due diligence
into contracting processes to monitor supplier security performance.
• Security architecture team embedded into Datacentre migrations programmes.
• Desktop and simulated exercises to test business response plans.
Business and operational
108

7
IT systems and IT infrastructure
Chief Information, Procurement,
Services and Innovation Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
3
Strategic relevance Status
• IAG is dependent on IT systems for most key
business processes. Increasingly, the integration
within IAG’s supply chain means that the Group
is also dependent on the performance of
suppliers’ IT infrastructure, e.g. airport
baggageoperators.
• Competitors and new entrants to the travel
market may use digital tools, innovate or use
AIand technology more effectively and disrupt
the Group’s business model.
The Group recognises the importance of technology to business
transformation and growth. The CIPSIO works with the Group’s operating
companies to ensure appropriate prioritisation andinvestment in the Group’s
digital and IT transformation. Both are members of the IAGManagement
Committee.
The Group continues to review its IT operating model as it progresses with
digitalisation, migration to the cloud from on-premises data centres,
remediation and transformation of its networks and addressing
obsolescence. It has moved more resources into product teams more closely
aligned to business needs. The Group is reliant upon the resilience of its
systems and networks for key customer and business processes and is
exposed to risks that relate to poor performance, vulnerability or failure of
these systems. TheGroup continues with major programmes and upgrades
to modernise, including new commercial capabilities and customer-centric
enhancements using agile-based models, as well as replacing core IT
infrastructure and improving network connectivity and redundancy.
Mitigating actions that prioritise operational stability and resilience have been
built into all cutover plans for the go-live of IT systems-related changes. This
has strengthened the Group’s operating companies’ focus on addressing
their legacy estates to deliver digital customer experiences. The CIPSIO
works with the operating companies to ensure that their IT investment and
requirements are appropriately prioritised and delivered, value to the Group
from IT investment is maximised and central services can support the
Group’s businesses appropriately.
Risk description Mitigations
• The dependency on IT systems and networks
for key business and customer processes is
increasing and the failure of a critical system
may cause significant disruption to the
operation and lost revenue.
• The level of transformational change at pace
required by the Group’s airlines may result in
disruption to operations as the legacy
environment is addressed.
• Obsolescence within the IAG Tech estate could
result in service outages and/or operational
disruption or delays in implementation of the
Group’s transformation.
• Technology disruptors may use tools to position
themselves between our brands and our
customers.
• IAG Tech works with the Group operating companies to deliver digital and
IT change initiatives to enhance security and stability.
• Operating companies’ IT governance boards are in place to review delivery
timelines.
• Reversion plans are developed for migrations on critical IT infrastructure.
• System controls, disaster recovery and business continuity arrangements
exist to mitigate the risk of a critical system failure.
• Robust portfolio process to determine the right investments across
theGroup.
• IAG Tech CIPSIO and operating company management committee
members have strategic relationships with all critical IT suppliers and
oversight of all critical IT contracts across the Group’s businesses.
• The Group continues to develop platforms such as the New Distribution
Capability, changing distribution arrangements and moving from indirect
todirect channels.
• IAG Tech continues to create early engagement and leverages new
opportunities with start-ups and technology disruptors.
Business and operational
Risk management and principal risk factors continued
109

8
Operational resilience
Chief Information, Procurement,
Servicesand Innovation Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1 2 3
Strategic relevance Status
• The Group’s airlines may be disrupted by
anumber of different events.
• A single prolonged event, or a series of events
inclose succession, impact on the Group airlines’
operational capability, financial status and brand
strength.
• The Group needs to adhere to local
governments’ restrictions and regulations,
especially related to safety and public health,
and is therefore sensitive to any consequential
impact on demand.
The Group is reliant on critical third parties for services and goods, many of
which have been impacted by resourcing challenges, inflation and supply
chain disruption. Ongoing labour shortages, particularly for technical licensed
staff, industrial unrest and strike action in the aviation sector combined with
goods availability shortages in the supply chain, especially engines, and
airspace and ATC restrictions can all impact the operational environment and
the customer experience of the Group’s airlines and increase the costs of
running operations to provide additional resilience, as well as impacting the
costs and operations of the businesses onwhich the Group relies.
The Group continues with its ambitious IT infrastructure transformation
agenda to modernise and digitalise its IT estates. The Group is focused on
minimising any unplanned outages or disruption to customers with additional
resilience built into the airlines’ networks.
The Group continues to consider and build its resilience to withstand severe
unexpected stresses. Potential high-impact, low-likelihood events have been
considered that could have the potential to disrupt IAG and/or the aviation
sector. Many of these events remain outside the Group’s control such as
adverse weather, another pandemic, civil unrest or a terrorist event seen
incities served by the Group’s airlines.
Risk description Mitigations
• An event causing significant network disruption
or the inability to promptly recover from
short-term disruptions may result in lost
revenue, customer disruption and additional
costs to the Group.
• Public health concerns impacting populations
atscale could see an adverse effect on the
Group where governments choose to impose
restrictions, as would any future pandemic
outbreak, or other material event impacting
operations or customers' ability to travel.
• The Group’s airlines may not be able to resource
their operations sufficiently resulting in impacts
to customers and brands.
• The Group’s airlines are reliant on critical third
parties to deliver goods and services to maintain
operations and meet customer expectations and
any failure of the level of service or reliability
and delivery of goods may impact operational
resilience and our customers.
• Management has business continuity plans to mitigate this risk to the
extent feasible, with focus on operational and financial resilience and
customer and colleague safety and recovery.
• The Group’s airlines have standby aircraft and crew in place to improve
resilience.
• Resilience to minimise the impact of ATC airspace restrictions and strike
action on the Group’s customers and operations is in place.
• All of the Group’s airlines are focused on developing customer disruption
management tools to help our customers in times of disruption.
Business and operational
110

9
People, culture and employee
relations
Chief People, Corporate Affairs
andSustainability Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
2
Strategic relevance Status
• The Group has a large unionised workforce with
around 87% of colleagues represented by one
ofa number of different trade unions under
collective bargaining agreements (CBA). IAG
relies on the successful agreement of collective
bargaining arrangements across its operating
companies to operate its airlines.
• The right skillsets and culture are needed to
transform our businesses at pace.
• The Group’s airlines require specialist skillsets
tocontinue to operate.
Our people, their engagement, cultural appetite and mindset for change are
critical to the Group’s current performance and future success. Our
leadership recognises the efforts of our staff and their commitment through
the continued operational challenges facing our airlines. Resource shortages
in crew have been addressed and our businesses are building the knowledge
and experience of their new starters and managing the cultural impacts of
onboarding at scale to ensure they have the right capabilities to operate.
Shortages in technical licensed staff across the aviation sector and in the
Group airlines may impact maintenance delivery timelines unless resource
levels can be secured.
Across the Group, collective bargaining is in place with various unions.
Where agreements are open, our operating companies continue to engage
indiscussions with unions to secure sustainable agreements and address
concerns arising within the negotiations. In September, AENA announced
theresult of its competitive tender for ground handling licences at airports
across Spain, which resulted in the loss of key airports to another provider,
with unions for Iberia ground handling services taking strike action in January
2024. Iberia plans to create a new handling company, which will provide
handling services and all airport staff affected by the AENA decision will be
moved to the new company, with a new sector CBA and conditions for
existing Iberia employees.
The Group is focused on staff wellbeing and people morale and motivation,
including supporting agile and hybrid working models. Welfare support
schemes are in place to support the Group’s staff, and initiatives to build
trust and engagement continue across the Group’s businesses. The Group
has identified the skills and capabilities that are required to manage its
transformation, which include enhancing its leadership capability and
delivering on the Group’s diversity and inclusion plans. All operating
companies recognise the critical role that their employees will play in the
transformation and future success of the Group and they are focusing on
improving organisational health and employee engagement.
Risk description Mitigations
• Any breakdowns in the bargaining process
withthe unionised workforces may result in
subsequent strike action which may disrupt
operations and adversely affect business
performance and customer perceptions
oftheairlines.
• Our people are not engaged, or they do not
display the required leadership or cultural
behaviours.
• The Group businesses fail to attract, motivate,
retain or develop our people to deliver service
and brand experience.
• Critical skillsets are not in place to execute on
the required transformation plan or to exploit
innovation and AI opportunities and drive the
business forward.
• Technical licensed staff, including pilots
andengineers, may be impacted by Brexit
recruitment restrictions.
• Ongoing information sharing, consultation and collective bargaining with
unions across the Group take place on a regular basis led by operating
companies’ human resources specialists, who have a strong skillset in
industrial relations.
• Ensuring that remuneration is aligned to local markets in terms of
productivity and pay.
• Operating companies’ people strategies are in place in our businesses.
• Succession planning within and across operating companies has been
reviewed by the IAG Management Committee and Board and a consistent
process is being implemented across the Group.
• Focus on recruiting and developing skills to run and transform our business.
• The Group is investing in apprentice programmes and retention initiatives to
help secure and retain engineers.
• Operating companies’ engagement and organisational health surveys have
been conducted with subsequent action plans developed to create
apositive and inclusive culture.
• Access to support individuals’ wellbeing.
• IAG Code of Conduct is supported by annual awareness programmes
andmandatory training for all of our staff.
Business and operational
Risk management and principal risk factors continued
111

10
Safety or security incident
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• The safety and security of our customers
andemployees are fundamental values for
theGroup.
• High profile external events impacting the
aviation sector and aircraft may change
customer sentiment towards air travel.
The IAG Safety, Environment and Corporate Responsibility (SECR)
Committee of the Board and the board of each operating company continue
to monitor the safety performance of IAG’s airlines. Safety and security
responsibility lies with each Group airline in accordance with its applicable
standards. Further detail is provided in the SECR Committee report.
Risk description Mitigations
• A failure to prevent or respond effectively
toamajor safety or security incident or
intelligence may adversely impact the Group’s
brands, operations and financial performance.
• The corresponding safety committees of each of the airlines of the Group
satisfy themselves that they have the appropriate resources and procedures,
which include compliance with Air Operator Certificate requirements.
• The Group’s airlines have comprehensive training and maintenance
programmes in place, supported by a just culture environment, where
everyone is accountable for their actions and their performance is reflective
of the knowledge, behaviours and skills they have.
• There is ongoing security engagement with airports, regulators and public
authorities across the airlines’ networks.
• Incident centres respond in a structured way in the event of a safety
orsecurity incident or intelligence.
Business and operational
See SECR report
112

11
Transformation, innovationandAI
Chief Information, Procurement,
Services and Innovation Officer
Chief Transformation and Corporate
DevelopmentOfficer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
4
Strategic relevance Status
• The transformation, innovation and AI agenda
iscritical to the Group’s ability to deliver strong
returns and to compete in the new competitive
marketplace, where distortionary effects of
aviation support schemes may have allowed
competitors to accelerate their change agendas
and invest to improve capabilities and customer
propositions.
The Group has an established Transformation Programme Management
Office which has oversight of an agreed portfolio of initiatives across the
Group focused on improving customer service, revenue and cost efficiency
and the transformation mindset is becoming part of our culture. Many of the
programmes are multi-year and all are subject to the ongoing review and
investment approvals of the IAG Board. In the year, the Group established an
AI governance committee and guidance for data usage in respect to AI tools
and technology.
Risk description Mitigations
• Failure to transform the business to effectively
deliver cost efficiency initiatives, maintain or
grow share in the new competitive environment,
fully implement all programmes across the
Group and realise the benefits of the change
initiatives to deliver Group digital platforms
andcustomer propositions.
• The pace of change may expose the Group to
execution risk as multiple initiatives are delivered
across processes and systems that serve our
operations and customers.
• The impact on our people of the wide-ranging
change agenda if poorly managed or
uncoordinated could lead to logistical and
engagement challenges with the potential
tonegatively impact NPS, revenue and
efficiency benefits.
• Further standardisation, simplification and
efficiencies of the Group platforms are not
delivered.
• Competitors, or new entrants, may invest
andinnovate deploying digital technologies,
AI,sustainability initiatives and/or platforms
ahead of the Group.
• The levels of data capture, data storage and
security and availability of data, are not
sufficient and ready to exploit AIuse cases.
• The Chief Transformation and Corporate Development Officer has clear
oversight of all programmes across the Group’s businesses.
• Mirrored structures in the operating companies.
• Consistent core metrics and dashboard reporting used to assess
performance against plan.
• The IAG Management Committee has regular operating company-specific
meetings to assess their transformation agenda and the risks to delivery.
• The Group transformation agenda is subject to Board approval and progress
is regularly monitored by the Board.
• Group AI governance committee to assess AI initiatives to allow the Group
businesses to exploit AI capabilities.
• There is operating company-led communications to our employees
onchange initiatives and changes that may affect them.
• Consideration is given to the Group’s sustainability commitments
andagenda for all programmes.
• Any potential changes that could impact the brands are reviewed
tomitigate against reputational and brand damage.
Business and operational
Risk management and principal risk factors continued
113

12
Debt funding
Chief Financial Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• The Group’s ability to finance ongoing
operations, committed aircraft orders, future
fleet growth plans or acquisitions is vulnerable
to various factors including financial market
conditions, financial institutions’ appetite for
secured aircraft financing and the financial
market’s perceptions of the future resilience and
cash flows of the Group.
Access to the secured and unsecured debt markets may be disrupted by
geopolitical and economic uncertainty, impacting funding options and
interest rates available to the Group for new aircraft financing or where it
chooses to re-finance debt. Interest rate increases implemented by central
banks in 2023 to address inflation increase the cost for the Group of existing
floating rate debt, as well as for new financing. As at 31 December 2023
approximately 13% of the Group’s debt, including hedges, was floating rate as
the Group has paid down a substantial part of its floating debt in 2023. The
Group successfully raised financing for all aircraft deliveries it sought to
finance during 2023, using traditional long-term aircraft financing
arrangements. The Group’s credit rating with Standard & Poors was
upgraded to investment grade (BBB-) during the year, whilst its rating with
Moody’s was increased by onenotch to Ba1. In December, Fitch upgraded
British Airways to BB- investment grade.
Risk description Mitigations
• Failure to finance ongoing operations,
committed aircraft orders, future fleet growth
plans, business acquisitions and third-party
financial guarantees.
• New financial arrangements, in addition to
therepayment of existing arrangements, may
impact plans to transform the Group and will
influence the timing for IAG to resume paying
dividends to its shareholders.
• Higher interest rates in the market, or more
restrictive terms, for new finance arrangements
or re-financing may impact the Group’s cost
base.
• The IAG Board and Management Committee review the Group’s financial
position and financing strategy regularly.
• The Group has maintained its clear focus on managing liquidity and ensuring
that critical investment in the Group is maintained.
• During 2023, the Group extended the availability for $1,655 million of its
$1,755 million revolving credit facility by one year to March 2026.
• Maintain strong relationship with banks, lenders and lessors.
• Scenario planning for different financial environments.
• Continuous review of capital structure to minimise interest rate exposure
and lower cost of capital.
Financial risk including tax
See Financial review section
114

13
Financial and treasury-related risk
Chief Financial Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• The volatility in the price of oil and petroleum
products can have a material impact on the
Group’s operating results.
• The volatility in currencies other than the
airlines’ local currencies can have a material
impact on the Group’s operating results,
particularly the US dollar.
• Higher interest rates can have a material impact
on the Group’s operating results.
• The Group is exposed to non-performance of
financial contracts that may result in financial
losses.
Fuel cost volatility driven by geo-political events has been partly mitigated
by the Group’s fuel hedging policy. Access to fuel hedging instruments or the
ability to pass increased fuel costs on to consumers could impact the
Group’s profits. The Group continues to assess the strength of the US dollar
against the euro and pound sterling and the potential impacts on the Group’s
operating results. All airlines hedge currency risk in line with the Group
hedging policy.
The approach to fuel risk management, financial risk management, interest
rate risk management, proportions of fixed and floating debt management
and financial counterparty credit risk management and the Group’s exposure
by geography continue to be assessed to ensure the Group responds to the
rapidly changing financial environment appropriately. Details are set out in
the Group financial statements.
Risk description Mitigations
• Failure to manage the volatility in the price of oil
and petroleum products.
• Failure to manage currency risk on revenue,
purchases, cash and borrowings in foreign
currencies other than the airlines’ local
currencies of euro and sterling.
• Failure to manage the impact of interest rate
changes on floating finance debt and floating
operating leases.
• Failure to manage the financial counterparties’
credit exposure arising from cash investments
and derivatives trading.
• The IAG Audit and Compliance Committee and IAG Management
Committee regularly review the Group’s fuel and currency positions and
other financial contracts.
• All airlines hedge in line with the Group’s hedging policy under the Group
Treasury oversight.
• Fuel price risk is partially hedged through the purchase of oil and oil
distillates derivatives inaccordance with the Group risk appetite.
• Currency risk is hedged through matching inflows and outflows and
managing the surplus or shortfall through foreign exchange derivatives.
• All airlines review routes to countries with exchange controls to monitor
delays in the repatriation of cash and/or with the risk of material local
currency devaluation.
• The impact of interest rate changes on floating debt positions is mitigated
through interest rate derivatives as well as structuring selected new debt
and lease deals at fixed rates throughout their term.
• The Group has a financial counterparty credit limit allocation by airline and
by type of exposure and monitors the financial and counterparty risk on
anongoing basis.
• The IAG Management Committee and the IAG Audit and Compliance
Committee regularly review the financial risks and the hedged amounts.
Anymaterial position outside policy limits has to be approved by the IAG
Audit and Compliance Committee.
Financial risk including tax
Risk management and principal risk factors continued
115

14
Tax
Chief Financial Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• Payment of tax is a legal obligation. Changes
inthe tax regulatory environment, including
changes in tax rates, may result in additional tax
costs for the Group and in additional complexity
in complying with such changes.
• The Group’s tax strategy aims to balance the
needs of our key stakeholders, recognising that
tax is one of the Group’s positive contributions
to the economies and wider societies of the
countries in which IAG operates.
Tax is managed in accordance with the tax strategy, found in the Corporate
Policies section of the IAG website. The Group has a number of scheduled
tax audits, by local tax authorities, in progress across its businesses. In the
UK, there are ongoing discussions with HMRC on certain treatments of VAT.
Further information about taxes paid and collected by IAG is set out in note
10 of the Group financial statements.
Risk description Mitigations
• The Group is exposed to systemic tax risks
arising from either changes to tax legislation
andaccounting standards or challenges by tax
authorities on the interpretation or application
of tax legislation.
• Businesses and consumers may be subject
tohigher levels of taxation as governments seek
to increase environmental taxes, redesign the
global tax framework and rebuild public finance.
• The Group’s stakeholders’ expectations of the
tax behaviours of large corporates may lead
toreputational risk from the Group’s
managementof tax.
• The Group adheres to the tax policy approved by the IAG Board and is
committed to complying with all tax laws, to acting with integrity in all tax
matters and to working openly with tax authorities.
• Tax risk is managed by the operating companies in conjunction with the IAG
Tax function.
• Tax risk is overseen by the Board through the Audit and Compliance
Committee.
• The Group seeks to understand its stakeholders’ expectations on tax
matters, e.g. cooperative working with tax authorities and its interaction with
non-governmental organisations.
• The IAG Board annually reviews and approves the Tax Strategy.
• The Group takes expert advice on tax matters as required.
Financial risk including tax
116

15
Group governance structure
General Counsel
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• Airlines are subject to a significant degree of
regulatory control. In order for air carriers to
hold EU operating licences, an EU airline must
be majority-owned and effectively controlled by
EU nationals. British Airways is a UK carrier and
not subject to the same requirement.
The aviation industry continues to operate under a range of nationality
andother restrictions, some of which are relevant to market access under
applicable bi-lateral and multi-lateral air service agreements, while some
arerelevant to eligibility for applicable operating licences. The Group will
continue to encourage stakeholders to normalise ownership of airlines in line
with other business sectors.
Risk description Mitigations
• IAG could face a challenge to its ownership and
control structure.
• The Group has governance structures in place that include nationality
structures to protect Aer Lingus’, British Airways’ and Iberia’s operating
licences and/or route rights. These have been approved by the relevant
national regulators.
• IAG will continue to monitor regulatory developments affecting the
ownership and control of airlines in the UK and EU.
See Corporate Governance section
16
Non-compliance with key
regulation and laws
General Counsel
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• Carrying out business in a compliant manner
and with integrity is fundamental to the values
of the Group, as well as the expectations of the
Group’s customers and stakeholders.
The Group has maintained its focus on compliance with key regulations and
mandatory training programmes have continued throughout the year. For
safety- and security-related regulatory risks, please refer to the ‘Safety or
security incident’ risk.
Risk description Mitigations
• The Group is exposed to the risk of an individual
employee’s or groups of employees’
inappropriate and/or unethical behaviour
resulting in reputational damage, fines or losses
to the Group.
• Failure to meet legal or regulatory standards
may result in breach with the potential to hurt or
impact ourcustomers, employees, or third
parties, or impact our operations, and lead to
reputational damage, fines or losses to the
Group.
• The Group has clear frameworks in place including comprehensive Group-
wide policies designed to ensure compliance, monitored by the IAG Audit
and Compliance Committee.
• There are mandatory training programmes in place to educate employees
as required for their roles in these matters.
• Compliance, human resources and legal professionals specialising in
competition law, anti-bribery and other legislation and regulations that apply
to the Group businesses support and advise the Group’s businesses.
• IAG’s Code of Conduct is supported by annual awareness programmes
andmandatory training, with additional focus for higher-risk areas.
• Compliance Officers and Data Protection Officers are in place in all
operating companies.
• Speak up and whistleblowing channels are available across the
Group’sbusinesses.
Compliance and regulatory
Risk management and principal risk factors continued
117

Viability assessment
Longer-term trends
and risk considerations
Risk assessment across
the timeline of the plan
Viability scenario process
The directors have assessed industry,
Group-specific and non sector-specific
longer-term trends over a timeframe
beyond the plan period, such as climate
change regulation, infrastructure proposals
at hubs, availability and timing of
technologies in fleet, move to and
exploitation ofthe cloud, AI and disruptive
innovation tools. These trends may require
the business to consider strategic
responses, business model adaptions and
new skillsets ahead of any potential impact
to the Group plan.
Other considerations include:
• economic trends and shifts in the relative
strengths of global economies including
rise of emerging markets and hubs,
market shifts and interconnectivity
including partnerships and alliances, the
competitive landscape and changes in
customer mix or sentiment to travel;
• supply chains and proximity and
reliability of supply, inflationary,
resource and availability pressures on
key suppliers;
• costs of compliance to environmental
and climate change regulations and/or
lack of availability of infrastructure
within countries to meet commitments
or government mandates;
• increasing regulatory burdens,
asymmetry in policy and/or government
intervention impacting aviation and the
Group’s business model;
• areas of risk or opportunity for the
Group, such as workforce availability,
migration, war for talent, impact of
AIon business and skillsets, outcomes
of mis- and dis-information, diversity
and inclusion ambitions, hybrid ways
ofworking and different career
expectations from new joiners into
workforces and the aviation industry;
• structural changes in how
customerstravel;
• the potential macroeconomic
consequences of interest rates and
inflation especially where there are
labour shortages in key markets or
ashortage of technical specialists;
• the potential longer-term impacts
ofBrexit and the UK’s divergence from
EU policy and laws;
• the Group’s resilience to future events
impacting aviation or global markets,
financial markets, interest rates and
exchange rates, particularly the US
dollar; and
• stakeholder expectations over
commitment to acting with integrity
toprotect our planet, particularly
climate change and carbon impacts.
The directors have assessed key threats
and trends faced by the industry,
emerging risks and opportunities, as well
as other industry and Group-specific
risks that could impact the Group’s
business plan:
• these are considered in light of their
impact on our business model and
relevance, operations, customers and
financial status and include changes in
regulations, customer trends and
behaviours, macroeconomic
predictions on growth, regional
market opportunities, technology
trends, environmental implications and
infrastructure developments that
could impact our operations, as well
as more existential threats to aviation;
• when developing the Group’s three-
year business plan, longer-term
considerations have been assessed by
the IAG Management Committee and
the Board in conjunction with the
priorities of and risks faced by the
business; and
• the Board has also conducted its
annual strategy session in addition
toregular performance and strategy
delivery progress reviews during the
year. Following this process, short-,
medium- and longer-term priorities,
challenges and opportunities have
been identified and actions agreed.
When considering the viability of the
Group, for the purposes of this report,
the directors have evaluated the risk
landscape facing the Group and
recommended plausible but severe
downside scenarios that could impact
the Group’s three-year plan to determine
the Group’s resilience to such impacts.
The results of these scenarios on the
plan have been presented both pre
andpost an assessment of the likely
effectiveness of the mitigations that
management reasonably believes would
be available over this period (and not
already reflected in the plan).
The directors have assessed key threats
and trends, and emerging risks and
opportunities, to determine plausible
but severe downside scenarios that
could impact the Group’s three-year
business plan.
118

Viability scenario includes
sustainability-related stress
No. Title
Link to
principal risks
1 Downside case
This scenario configures a blend of commercial and operational adverse impacts which would result in capacity
reductions, in addition to an increase in fuel prices, over and above the Group’s business plan assumptions.
Economic considerations include a combination of events reducing capacity up to a maximum of 25%,
increasing fuel prices up to 20%, reducing passenger unit revenue and increased operational costs.
The Downside case assumes that British Airways would be required to draw down, in full, its portion of the
available US dollar Revolving Credit Facility. The Downside case also builds in a downside impact in Air Europa
Holdings, which the Group plans to acquire in the plan period, subject to regulatory approval.
The period to June 2025 of this Downside case has also been applied as the Downside case in the going
concern analysis (see note 2 of the Group financial statements).
2, 3, 4,
8, 12, 13
2 Operational resilience challenges
Lost revenue within some IAG airlines from pre-emptive flight cancellations in response to resourcing
challenges with resultant reputational impact.
Ongoing challenges in the global supply chain, particularly engine availability, reliability and performance leads
toan increase in grounded aircraft awaiting maintenance with further capacity reductions also impacting
revenues. Revenues from the Group’s maintenance business also impacted by the lack of available spare parts.
Further revenue impact considered from reduced capacity as a result of airport capacity and air traffic control
airspace restrictions.
Revenue impact from schedule disruption due to extreme weather events also considered within the scenario.
1, 4, 5,
8, 9
3 Cybersecurity and IT infrastructure
A stress to model the impact of a ransomware attack on an IAG airline. The scenario assumes a disruption
period of five days resulting from the attack before full connectivity is restored, impacting customers and
operations of the affected airline. It also assumes lost revenue due to disruption of operations at the affected
airline with knock-on impacts to other IAG airlines due to the need to isolate and switch off connectivity of
Group shared credentials platforms. There are also further lost revenues due to reputational impact and
increased EU 261 and other customer goodwill costs. Associated costs of recovery from the incident include
the disruption through the investigation period including increased IT costs as well as brand impacts, and the
potential for regulatory scrutiny and fines.
In addition, the scenario considers an unplanned outage owing to data centre migration activity resulting in
short notice flight cancellations causing further lost revenue and increased EU 261 and other customer goodwill
costs.
1, 6, 7, 8
4 Sustainability and business transformation
An increasing revenue stress on short-haul operations across the Group to reflect changes in customer
behaviours towards short-haul travel where other travel options exist.
Increased carbon costs and sustainable fuel costs to meet mandates and where supply cannot be secured. Revenues
in key markets below plan expectations also modelled to reflect a potential long-term change in mix and travel
behaviours.
Potential for lost revenue impact arising from delays in delivering and realising the benefits of business
transformation initiatives and increased costs of securing required resourcing levels.
Longer-term consideration of the impacts of climate change and carbon and regulatory initiatives to address
this within the aviation sector, such as the implementation of new regulatory policy, carbon costs and the cost
and availability of Sustainable Aviation Fuel are also subject to assessment and modelling by the Group in
addition tothe viability scenario assessments.
1, 4, 11
The scenarios have been defined
bymanagement and designed
toconsider principal risks (or
combinations of risks) that could
materialise over the viability period and
weaken the Group’s liquidity position,
and therefore its financial sustainability.
Each scenario is regarded as severe but
also plausible and has considered the
impact onliquidity, solvency and the
ability toraise financing in an uncertain
andvolatile environment.
Management has also assessed
mitigations that are available to the
business beyond operating cost
reductions including further financing,
capital expenditure plans and potential
disposals. Options are presented, as
appropriate, for the Board to assess. In
reviewing and approving the scenarios,
the Board considered, amongst other
matters, the availability and sufficiency
of potential mitigations, the expected
speed of implementation in response to
the uncertainty and the future flexibility
required for the Group to adapt further
as needed.
Sensitivities in the scenarios’
assumptions have been highlighted by
management and challenged by the
Board. In addition, the Board reviewed
the results of revenue and margin
reverse stress tests, which demonstrated
the level of sustained passenger revenue
decline, and, separately, margin decline
before mitigations, that would resultin
the Group using all available liquidity
(including cash and currently available
undrawn credit facilities) andcompared
this to the outputs from the scenarios.
Scenarios modelled
Risk management and principal risk factors continued
119

Viability statement
The directors have assessed the viability
of the Group over three years to
December 2026. They have considered
the global macroeconomic environment
and geopolitical uncertainty, the health
of the aviation industry and its supply
chain, the assumptions of the plan, the
strategy of the Group and the Board’s
risk appetite. Although the prospects of
the Group are considered over a longer
period, the directors have determined
that a three-year period is an
appropriate timeframe for assessment
as it is aligned with the Group’s strategic
planning period (as reflected in the
plan), and as the external uncertainties
facing the aviation sector continue to be
significant and many are beyond the
Group’s ability to influence directly.
The Board recognises the pace of
change required within the Group to
further adapt, build appropriate
resilience and respond tothis
environment, in addition to the rapidly
changing competitive landscape and
wider global macroeconomic conditions.
The Group has reviewed the modelling
of the impact of mitigating actions to
offset further deterioration in demand
and capacity, including reductions in
operating expenditure and capital
expenditure. The Group expects to be
able to continue to secure financing for
future aircraft deliveries and in addition
has further potential mitigating actions
itwould pursue in the event of adverse
liquidity experience.
Further details on debt financing can be
found in the going concern disclosures
in note 2 of the Group financial
statements.
Based on this assessment, the directors
have a reasonable expectation that the
Group will be able to continue in
operation, meet its liabilities as they fall
due and raise financing as required over
the period to December 2026. However,
this is subject to a number of significant
factors that are outside the control
ofthe Group. In reaching this
assessment the directors have made
assumptions when considering both the
plan and the Downside case (the most
severe and plausible of the viability
scenarios considered):
• the Group will continue to have access
to funding options and that the capital
markets retain a level of stability
andappetite for funding within the
aviation sector;
• the Group can implement any further
structural changes required in
agreement with any union
consultation processes and regulatory
approvals;
• any future pandemic or other public
health-related restrictions do not
result in further prolonged and
substantial capacity reductions and
groundings as governments do not
have the appetite for the economic
impact and stress that it would place
on their respective economies and
populations;
• any new virus strain or threat to public
health that emerges during the
viability period can be managed within
existing health and testing regimes
without recourse to government
regulations that significantly affect
ourairlines’ operations; and
• geopolitical events do not result
insignificant war zones impacting
financial markets, airspace operations
and connectivity flows across our
flight schedules.
120

INTERNATIONAL
AIRLINES
GROUP
Annual Corporate
Governance Report
and Directors
Remuneration Report
The 2023 annual corporate governance and
directors’remuneration reports of International
ConsolidatedAirlines Group, S.A., prepared according to
Circular 3/2021, of 28 September, of the Spanish National
Stock Exchange Commission arepart of this Management
Report and, from the date of the publication of the 2023
Financial Statements, are available inthe Spanish National
Stock Exchange Commission website and in the
International Consolidated Airlines Group, S.A. website,
being incorporated by reference to this report as
appropriate

Consolidated Statement
of Non-Financial
Information 2023
INTERNATIONAL
AIRLINES
GROUP

The present statement was prepared to comply with the requirements of Spanish Law 11/2018, of December 28, 2018 on non-
financial information and diversity (amending the Commercial Code, the revised Capital Companies Law approved by Legislative
Royal Decree 1/2010, of July 2, 2010 and Audit Law 22/2015, of July 20, 2015), and forms part of the Group’s Management Report.
The title of this statement complies with the UK Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations
2022, SI 2022/31.
International Consolidated Airlines Group (IAG) provides information about environmental, social, employee-related, and human
rights-related issues, which is relevant to the Company and important for the execution of business activities. All information except
the Additional Disclosures section is also in the IAG Annual Report and Accounts. The main change in the scope of this Statement
ofNon-financial Information versus last year is the inclusion of aligned spend for the EU Taxonomy.
This statement contains the following sections:
Consolidated Statement
of Non-Financial Information
Overview
1
Business model
5
Sustainability
8
A. Planet
8 A.1. Planet – climate change
25 A.2. Planet – wider issues
25 A.2.1. Waste
27 A.2.2. Noise and air quality
29
B. People and prosperity
29 B.1. Overview
30 B.2. Key metrics and progress
31 B.3. Equity, Diversity and Inclusion
34 B.4. Health, safety and wellbeing
35 B.5. Human rights and modern slavery
35 B.6. Community giving and charitable support
36
C. Principles of sustainability governance
36 C.1.-C.2. Management approach (sustainability
strategyand governance frameworks)
40 C.3. Workforce governance
40 C.4. Supply chain governance
42 C.5. Ethics and integrity governance
43 C.6. ESG risk management
44 C.7. Reporting and data governance
45
Risk management and principal risk factors
53 ‘Sustainable aviation’ risk
58 ‘People, culture and employee relations’ risk
68
Regulatory environment
72
Additional disclosures
73 A.1.3a.-3b. Planet – climate change
77 A.2.1a.-A.2.4. Planet – wider issues
79 B.2a.-d. People
87 B.8.1.-3. Remuneration and salary gap
90 B.9.1.-5. Prosperity
93 C.8. Governance – Description of EU Taxonomy and
2023 related activities

INTERNATIONAL
AIRLINES
GROUP
Connecting people,
businesses and countries
Who we are
We are International
Airlines Group (IAG).
One of the world’s largest
airline groups, made up
of our airline portfolio
brands and our non-airline
businesses. Our world-
class airline brands
have distinct identities,
customer propositions
and strategies.
Our stakeholders
EmployeesCustomers Suppliers Shareholders,
lenders and
other financial
stakeholders
For more information see the
operating companies’ sections
We have a portfolio of world-class brands
and operations
Governments
and regulators
Business at a glance
1

250+
destinations
across 91 countries
582
fleet
Creating global connections
Africa, Middle
East & South Asia
12.5
Asia Pacific
3.5
North America
31.7
Domestic & Europe
33.8
Latin America
& Caribbean
18.5
Available seat kilometres
(ASK % of IAG 2023 network)
115.6 million
passengers
4.7 billion
cargo tonne kilometres
71,794
employees globally
142.8 billion
Avios issued
2

Our proven structure facilitates
transformation and innovation
Drive portfolio and
financial strategy
• Drive Group corporate strategy;
set the portfolio
• Allocate capital and manage
thebalance sheet
• Manage investor relations
andfinancial stakeholders
• Drive value through mergers
andacquisitions, partnerships
andjoint businesses
Performance manage
• Performance manage
theoperating companies
• Oversee transformation ofthe
operating companies
Facilitate value capture
and share best practices
• Set the ambition and facilitate
asset-light growth
• Drive top talent management
andpipeline
• Drive sustainability agenda
• Facilitate capture of additional
synergies
• Drive innovation
• Provide centres of excellence to
facilitate best-practice sharing
• Performance accountability
• Commercial independence
• Operational independence
• Customer value proposition and relationship
• People management
• Manage relevant stakeholders
Allow our airlines to benefit from scale and world-class expertise
IAG, as the parent company, defines
theGroup ambition and drives its
long-term strategy. Its independence
from the operating companies enables
IAG to set performance targets for
these, manage their progress, oversee
their transformation initiatives, and
efficiently allocate capital within
theGroup. IAG supports intra-Group
coordination, best practices sharing
andtalent management, facilitating the
capture of synergies. Our model also
allows the Group to take part more
effectively in industry consolidation,
withIAG ensuring inorganic options are
aligned with the Group’s strategy
andproviding a central platform to
thebenefit of new operating companies
joining the Group.
The Group’s structure allows our
brandsto focus their efforts on their
addressable markets, customer
proposition, cultural identity, commercial
strategy and their industrial relations,
while its scale supports innovation and
investment innew products and services
to enhance our operating companies’
customer experience.
The Group’s portfolio sits on a central
platform, which drives efficiency and
transformation. The IAG central platform
leads collective efforts for the Group
tobe at the forefront of innovation
andsustainability in the airline industry,
by supporting and scaling top emerging
technologies in travel and aviation
andworking towards ambitious
sustainability targets.
Corporate parent company
Operating companies
Central platform
Business model
3

Our medium-term ambitions
Strengthening
our core
Driving earnings
growth through
asset-light businesses
Operating under
a strengthened
financial and
sustainability
framework
1.
Growing our portfolio
of global leadership
positions
2.
Strengthening our
portfolio of world-class
brands and operations
3.
Growing IAG Loyalty
4.
Further developing and
leveraging our strategic
airline partnerships
5.
Disciplined capital
allocation and balance
sheet management
6.
Industry leader to net zero
Our focus is on maximising
total shareholder returns
Transforming our business
Proven
structure and
business model
Investing in
unrivalled network
and customer
proposition
Driving efficiency
and innovation
World-class and
diverse team
Sustainable growth + Delivering world-class margins
= Maximising total shareholder returns
12-15%
operating margin
1
13-16%
ROIC
1
+4-5%
2
organic ASK
growth
<1.8x leverage
1
through cycle
tosupport
inorganic growth
1 For further detail refer to the Alternative performance measures section of the financial statements
2 2024 to 2026
Strategy
4

Sustainability
supporting
our purpose
2023 has been another
very important year on our
journey to be both a
leader in the industry in
sustainability and towards
our primary ambition to
achieve net zero emissions
by 2050.
The summary below outlines key
highlights from across IAG’s
sustainability programme in 2023, which
includes emphasis on increasing our use
and forward supply of Sustainable
Aviation Fuels (SAF), building our
sustainability governance around key
initiatives and enhancing our
sustainability reporting and disclosures.
Contents of this section
A. Planet
This section includes: Performance
highlights, Task Force on Climate-related
Financial Disclosures (TCFD) summary,
transition plan, metrics and progress,
emissions reduction initiatives, scenario
analysis, risks and opportunities,
stakeholder engagement, waste, noise
and air quality initiatives.
B. People and prosperity
This section includes: Key metrics and
progress, health, safety and wellbeing,
human rights and modern slavery,
diversity, equity and inclusion,
community engagement and
charitablesupport.
C. Principles of governance
This section includes: Sustainability
strategy, governance frameworks,
workforce governance, supply chain
governance, ethics andintegrity, ESG
risk management, reporting and data
governance and alignment with GRI and
SASB standards.
The full contents of this sustainability
report are included in the IAG
Non-Financial Information Statement
(NFIS) which is independently verified
by a third-party to limited assurance
standards in line with ISAE3000
(Revised) standards.
IAG’s most material environmental
metric – Scope 1 emissions – receives
additional verification each year as part
of the EU, Swiss and UK Emissions
Trading Schemes (ETS) and the
international Carbon Offsetting and
Reduction Scheme for International
Aviation (CORSIA), within six months of
the issuance of this report. Any material
changes are restated in future reports.
Compliance with specific frameworks
and standards is listed under relevant
section headings and summarised in
section C.8. While IAG does not align
with the Global Reporting Initiative (GRI)
Core or GRI Comprehensive standards, it
aligns with selected GRI standards based
on compliance with Spanish Law 11/2018
and chooses to voluntarily align with
other GRI standards on material issues.
SAF investments Carbon intensity Governance Supply chain
$1 billion 80.5
gCO
2
/pkm
7,500+ 100%
total investment in SAF
asof31 December 2023,
ofwhich 86% is in future
commitments
1
-3.6% vly, and on track
toexceed our 2025 target
of80gCO
2
/pkm
senior executives and
managers with climate-
related annual incentives
of suppliers screened
forsustainability risks
1 Based on an assumed jet fuel price of $800 per metric tonne and contracted margins for SAF production.
Introduction to sustainability
5

is to be a world-leading
airlinegrouponsustainability
is to pursue nine sustainability leadership
KPIsaslisted in section C.1 Principles
ofSustainabilityGovernance
Our material issues and initiatives
IAG takes a holistic approach to sustainability
1
• Reducing our climate impact
• Influencing and shaping policy
• Engaging with employees
• Building a diverse and inclusive
workplace
• Investing in the future
• Planning for climate-resilient operations
• Working with suppliers
A. Planet B. People and prosperity C. Principles of governance
• Environmental sustainability policy • Equity, Diversity and Inclusion (EDI)
policy
• Modern slavery and anti-trafficking
statement
• Code of Conduct
• Supplier Code of Conduct
• Anti-bribery and corruption policy
• Whistleblowing policy
• Policy on disclosure of corporate
information and engagement
withshareholders
Key policies
• Flightpath Net Zero strategy
• Climate-related remuneration
• Policy advocacy for low-carbon
solutions
• Leadership in trade associations
• Organisational Health Index (OHI)
surveys (every six months)
• EDI and engagement initiatives
• Community giving and fundraising
• Developing a social roadmap
• Accelerator programme and ventures
• Supply Chain Sustainability Programme
• Task Force on Climate-related Financial
Disclosures (TCFD) scenario analysis
1 The above pillars align with the World Economic Forum ‘Measuring Stakeholder Capitalism’ report in 2020. ‘Running a profitable business’ and
‘Pleasing our customers’ are material issues relevant to Prosperity which are covered in other sections of the Non-Financial Information Statement.
Board-level oversight IAG Management
Committee oversight
Operating company
oversight
Cross-Group alignment
• Safety, Environment and
Corporate Responsibility
Committee (SECR)
• Audit and Compliance
Committee
• Chief People, Corporate
Affairs and Sustainability
Officer (CPCASO)
• Management committees
oversee tailored sustainability
programmes
• Group sustainability strategy
• Group sustainability
team updates
• Working groups for key
sustainability initiatives
Annual initiatives
Key material issues
Key UN Sustainable Development Goals
Our governance
Our vision Our strategy
• Net zero Scope 1, 2, and 3
emissions across our
fulloperations and
supplychain
• Carbon removals for any
residual emissions
• 11% reduction in carbon
intensity, to 80gCO
2
/pkm
• ‘5 by 2025’ waste targets
• 40% of senior leadership
roles held by women
• 10% SAF use
• 20% drop in net Scope 1
emissions, to 22m tonnes
• 20% drop in net Scope 3
emissions, to 6.6m tonnes
2019
2025
2030
2050
Targets
Target baseline
Sustainability at a glance
6

Towards more sustainable journeys
Our sustainable products and services for customers
helpthemto reduce their carbon emissions and support
widersustainability goals. We continue to trial new offers.
1 All airlines. 2 British Airways. 3 Iberia. 4 Vueling. 5 IAG Cargo.
Pre-flight services at airports Ground transport at airports On-board impacts
• Renewable electricity in lounges
1
• Vegan menus in lounges
2,3
• Pre-ordering meal service to reduce
food waste
3
• Trialling electric buses
forpassengers
2,4
• Electric Mototoks to pull aircraft
torunways
2,3,4
• Trialling electric trucks
5
• Renewable electricity to power
aircraft on the ground
1
• Opportunity for customers to
contribute towards carbon removal
projects
1
• Voluntary SAF for customers
2,4
• Use of SAF supported by IAG
investment
1
• Vegan food
2,3
• Recycling on board
1
First
alcohol-to-jet SAF plant in the world
opens, the LanzaJet Freedom Pines
project, in a signed partnership with IAG
$1 billion
total investment in SAF as of
31 December 2023, of which 86% is in
future commitments
Based on an assumed jet fuel price of
$800 per metric tonne and contracted
margins for SAF production.
A-
CDP rating in 2023, the fourth
consecutive year of achieving a
leadership rating for our climate action
80.5 gCO
2
per passenger kilometre, a 3.6% annual
improvement in carbon intensity, and on
track to achieve our 2025 target
100%
of IAG airline senior executives
have climate-related remuneration
157.1k
tonnes of CO
2
saved from SAF use in
2023, an increase of 418% year-on-year
and representing 0.6% of our annual
emission reductions
Planet highlights
71,794
people employed across the
Group in 77 countries
4
meetings of the Board
SECR Committee
87%
of staff covered by collective
bargaining agreements
3.2+ million
training hours completed in
2023
9%
increase in our workforce
versus 2022
100%
of suppliers screened
for legal and financial risks
36%
of senior leadership roles
held by women
90%
of suppliers, by spend,
completed ESG scorecards
People and prosperity highlights Governance highlights
7

A.1.1. TCFD summary
IAG was an early adopter of the Task Force on Climate-related Financial Disclosures (TCFD) guidance and first carried out
TCFD-aligned scenario analysis in 2018, ahead of the UK requirement – Listing Rule 9.8 – which defines the information to be
included in a company’s annual report and accounts.
Descriptions of TCFD recommendations are on the TCFD website. IAG has applied the TCFD Guidance for All Sectors to the
disclosures in this report. An internal review of compliance with the 11 core TCFD recommendations identified no material gaps or
material changes from last year.
Governance Strategy Risk management Metrics and targets
Disclose the organisation’s
governance around climate-
related risks and
opportunities
(a, b)
Disclose the actual and
potential impacts of climate-
related risks and
opportunities on the
organisation’s businesses,
strategy and financial
planning where such
information is material
(a, b, c)
Disclose how the
organisation identifies,
assesses and manages
climate-related risks
(a, b, c)
Disclose the metrics and
targets used to assess
andmanage relevant
climate-related risks and
opportunities where such
information is material
(a, b, c)
Relevant disclosures in this report
a. See C.2., C.6.
b. See A.1.5., C.2., C.6., Risk
management and principal
risk factors section
a. See A.1.6.
b. See A.1.6., C.6., Risk
management and principal
risk factors section
c. See A.1.5.
a. See A.1.5., A.1.6., C.6., Risk
management and principal
risk factors section
b. See above
c. See above
a. See A.1.3., A.1.5., Report
ofRemuneration Committee
b. See A.1.3., A.1.6.
c. See Sustainability
ataglance, A.1.2., A.1.6.
Current activities
Board oversight via SECR
Committee and Audit and
Compliance Committee;
robust governance;
2021 materiality assessment
will be updated in 2024
Delivering against Flightpath
Net Zero strategy and nine
leadership KPIs;
sustainability-linked loans for
British Airways and Iberia;
TCFD-aligned scenario
analysis; one- and three-year
financial and business plans
integrate sustainability
aspects; new sustainability
contract clause for suppliers
Sustainable aviation risks are
treated as a principal risk and
regularly reviewed within
Enterprise Risk Management
(ERM) processes; risk
disclosures and risk
management processes
received an ‘A’rating from
the Carbon Disclosure Project
Clear metrics and targets for
2025, 2030 and 2050 (see
‘At a glance’); climate-related
remuneration for senior
executives and managers
Planned future activities
Review assurance, double
materiality assessment to be
completed in 2024, process
and control changes to
achieve reasonable assurance
by 2026
Ramp up of SAF
procurement, ongoing
scenario analysis, reviewing
guidance and evidence on
pathways to support
1.5°Ctransition
More detailed work on risk
impacts to 2030 and 2040,
actions to maximise climate
resilience, and risk
mitigationKPIs
Delivery against existing
targets, review 2030 targets
in line with latest evidence
on1.5°C-aligned transitions
A.1. Planet – climate change
Carbon intensity
80.5
gCO
2
/pkm
-3.6% vly
CO
2
saved from SAF use in 2023
157.1k
tonnes
Sustainability continued
8

Sustainable Aviation Fuels (SAF) are chemically almost
identical to kerosene.
The feedstocks for these fuels – currently waste materials such
as municipal waste or waste wood – absorb CO
2
in their growth
cycle before this carbon is recycled into fuel and then emitted
during the flight.
There are eight certified pathways to making SAF based on
useof specific technologies and feedstocks. These processes
are certified tointernational standards to ensure the fuels are
safe to use. SAF can be used in existing aircraft and airport
fuelling infrastructure.
IAG also ensures its SAF complies with strict sustainability
certification schemes, to ensure the feedstocks come from
sustainable sources, and that the production processes
conserve water and energy and have minimal wider impacts.
Leading our industry in SAF projects
1 Based on an assumed jet fuel price of $800 per metric tonne and
contracted margins for SAF production.
SAF is a key solution in IAG’s transition plan to net zero
(Section A.1.2.). It reduces carbon emissions on a greenhouse
gas lifecycle basis, typically by 80% or more compared with the
fossil jet fuels it replaces.
In 2021, the Group set a target of using one million tonnes
ofSAF a year by 2030, dependent on appropriate government
policy support.
As of 31 December 2023, our total investment in SAF reached
$1 billion, of which 86% is future commitments.
1
This is the
largest disclosed commitment to SAF by any airline globally.
In 2023, Group airlines used more than 53,000 tonnes of SAF,
an increase of 417% versus 2022, and one of the highest
volumes globally. Thissaved around 157.1 ktCO
2
, accounting
for0.6% ofemission reductions.
IAG remains on track to deliver a 100-fold increase in its SAF
volumes between 2022 and 2030, and expects to use SAF
for70% of total fuel in 2050.
IAG continues to make direct investments in new and innovative
SAF production capacity, catalysing the wider development of
the SAF market. These investments are typically coupled with
SAF purchase agreements, which are critical to the financial
viability of the new SAF production capacity.
The Group uplifts jet fuel in multiple locations, including the US
andEurope, and therefore is exploring projects in multiple regions.
IAG is working with technology developers to establish a range
ofSAF supply options, including the projects listed in this section.
We aim to be a leader in supporting developed SAF production
pathways that achieve the greatest life-cycle emission reductions
and can accelerate our efforts to decarbonise.
In February 2024, IAG signed its largest-ever SAF purchase
agreement with Twelve, a SAF project based in Washington,
which produces advanced power-to-liquid SAF made from CO
2
,
water and renewable energy. This means we have secured
one-third of the SAF required to meet IAG’s 10% SAF by 2030
target.
For SAF produced from other pathways, the Group is also
working to support projects which remove carbon or capture
and store it.
What is Sustainable Aviation Fuel?
Role in IAG transition plan
Supporting advanced SAF pathways
Delivering on our commitment
9

Advocating for appropriate SAF policy
IAG recognises that policies designed to support the development of SAF globally are currently fragmented and take different
forms. The Group is therefore working closely with policymakers and industry to support the development of appropriate SAF
policies needed to provide a strong investment signal and to scale up supply to meet sector demands.
We welcome the decision made by ICAO and its Member States at the third ICAO Conference on Aviation Alternative Fuels
(CAAF/3), to strive to achieve a global aspirational vision to reduce CO
2
emissions in international aviation by 5% by 2030 through
the use of SAF, low-carbon alternative fuels (LCAF) and other aviation clean energies.
In key markets, such as the US, EU and UK, our policy advocacy has focused in 2023 on the following areas below.
US EU UK
Policy overview
SAF supply is currently incentivised in the
US under state-level programmes, which
offer producers tax credits for their
production. These programmes currently
operate in states such as California, Illinois,
Minnesota, Washington and Oregon.
The Inflation Reduction Act, signed in
August 2022, also provides federal tax
credits for SAF producers (for SAF
dispensed in the US).
IAG 2023 activity
IAG continues to explore and sign
purchase agreements for SAF from
projects in the US which will be eligible
toclaim tax credit incentives. Please
seeour key SAF partnerships table
formore details.
Policy overview
The EU has legislated under its Fit for
55package a new ReFuelEU policy
thatwill set a SAF mandate from 2025.
The mandate will require a minimum
volume of SAF in the EU, starting in 2025
at 2% and reaching 6% by 2030,
with1.2%of the 2030 volume to be met
through use of advanced SAF pathways,
such as Power-to-Liquid (PtL) SAF.
Also within the Fit for 55 package,
theEUhas agreed to amend the Emissions
Trading System (ETS) Directive, and
introduce an incentive for aircraft
operators to increase SAF uplift through
the EU ETS from 2024. This will make
itpossible for aircraft operators to claim
ashare of 20 million allowances set aside
by the European Commission to cover
some of thedifference in the price paid for
SAF compared to jet kerosene, on EU ETS
compliant routes. SAF continues to be
zero-emission rated under the EU ETS,
which also incentivises use by aircraft
operators to reduce annual carbon cost
exposure.
IAG 2023 activity
We support the legislative changes made
by the EU to support the development
ofSAF supply in Europe.
We are now engaging with policymakers
on technical details concerning the
monitoring, reporting and verification
(MRV) of SAF use, alignment of new
legislative requirements with existing EU
ETS reporting frameworks and geographic
scope. We have also responded to public
consultations on the implementation of
these policies in Member States.
Policy overview
The UK has set a SAF target of 10% by
2030, and a target to commence the
construction of five SAF plants by 2025.
In2023, following advocacy efforts by
industry, the UK Government agreed
todevelop a revenue certainty mechanism
for SAF producers, that should be in
forceby 2026.
Under the UK ETS, SAF is zero-emission
rated, but there currently is no incentive
comparable with policy provided under
theEU ETS.
IAG 2023 activity
IAG responded to the UK’s consultation
onits SAF mandate in 2023. We continue
to engage with policymakers on ways
toincentivise SAF use in the UK,
includingthe UK ETS.
As a member of the Jet Zero Council, IAG
has engaged with the UK Government and
supported industry calls for a revenue
certainty mechanism for UK SAF
producers. We continue to engage through
the Jet Zero Council to support the
development of this mechanism as
quicklyas practicable, to accelerate
SAFproduction in the UK.
IAG also engages with Heathrow airport
onits financial incentive scheme to support
SAF uplift.
SAF governance in IAG
SAF is a key solution in IAG’s transition plan to net zero emissions. In 2023, IAG enhanced its governance framework suitable
foraccelerating our engagement with SAF investments and policy. This included establishing a SAF Management Group, comprised
of colleagues from IAG sustainability, Group finance and each operating company. The SAF Management Group reports to the SAF
Steering Group. Please refer to ‘Principles of sustainability governance’ for moreinformation.
Supporting emissions reductions for our customers
IAG offers corporate customers the opportunity to purchase the emission reductions from SAF to support their own Scope 3
emission reductions. In total, Group airlines sold more than 150,000 tonnes of CO
2
to customers last year. IAG also allocated around
150 tonnes CO
2
towards internal activities, including emissions associated with travel to senior leadership conferences.
Sustainability continued
A. Planet
10

Key SAF partnerships
Producer Production location Anticipated supply start Technology
BP Europe; China Supplying since 2021 HEFA
Neste Finland; Singapore Supplying since 2021 HEFA
Phillips 66 Humber, UK Supplying since 2021 HEFA
Repsol Cartagena, Spain Supplying since 2022 HEFA
Cepsa Huelva, Spain Supplying since 2023 HEFA
LanzaJet Georgia, USA 2024 Alcohol-to-jet
Twelve Washington, USA 2025 Power-to-Liquid
LanzaJet/Nova Pangaea
1
North East, UK 2027 Alcohol-to-jet
Aemetis California, USA 2027 HEFA
Gevo Minnesota, USA 2028 Alcohol-to-jet
LanzaTech South Wales, UK 2028 Alcohol-to-jet
Velocys
1
Immingham, UK
Mississippi, USA
2029 Fischer-Tropsch
1
Includes carbon capture and storage.
Project Speedbird – Developing SAF
in the UK
In June 2023, British Airways, LanzaJet
andNova Pangaea Technologies signed
anagreement that will accelerate Project
Speedbird, an initiative created by the
companies in 2021 to develop cost-effective
SAF for commercial use in the UK.
Twelve
In February 2024, IAG signed its largest-ever
SAF purchase agreement with Twelve,
aSAFproject based in Washington which
produces advanced Power-to-Liquid SAF
made fromCO
2
, water and renewable energy.
This means we have secured one third of the
SAF required to meet IAG’s 10% SAF by
2030target.
LanzaJet: Freedom Pines
Supported by investment by British
Airways in 2021, on 24 January 2024,
LanzaJet opened the first production
plant dedicated to low-carbon ethanol
SAF in Georgia, USA.
Key SAF partnerships
11

A.1.2. Transition plan
Overview
IAG is targeting net zero emissions
by2050 across its Scope 1, 2
and3emissions.
‘Net zero’ means any residual emissions
from IAG operations in 2050, or by the
manufacture and transport of goods
supplied to the Group, will be mitigated
by an equivalent amount of CO
2
removed
from the atmosphere via carbon removals.
IAG is on track to deliver its 2025, 2030
and 2050 climate targets (see below)
bycarrying out emission-reduction
initiatives, working in collaboration
withkey stakeholders and proactively
advocating for supportive government
policy and technology development.
IAG is also driving internal action by
using climate-related annual incentives
for over 7,500 senior executives
andmanagers.
Key measures to reduce emissions are
fleet modernisation, SAF usage, market-
based measures, including the UK and
EU ETS and CORSIA, and carbon
removals.
Less than 10% of the emissions
reductions between 2019 and 2050
areexpected to come from offsets.
Roadmap to net zero
IAG was the first airline group in the world
to commit to net zero emissions, and has
been publishing updates to its roadmap
tothis goal every year since 2019.
2050204520402035203020252015 2020
Demand growth
New aircraft and operations
ETS/CORSIA and offsets
SAF
Carbon removals
IAG net zero target
2019 baseline emissions
Percentage CO
2
reductions
(SAF is 70% of fuel in 2050)
41%41%
42%42%
17%17%
Gross emissions
Net emissions
IAG interim targets: 11% improvement in fuel efficiency 2019-2025, 20% drop in net Scope 1 and 3 emissions 2019-30, 10% SAF in 2030, net zero by 2050.
8
31
27
Pillar of carbon roadmap Delivery plans Venture investments/key innovation partners
New aircraft
and operations
• €12 billion investment between 2024 and 2028
for 178 new, efficient aircraft
ZeroAvia (hydrogen aircraft manufacturer)
I6 (fuel management software)
NAVflight services (flight planning services)
Honeywell Forge (fuel efficiency software)
SAF
• As of 31 December 2023, our total investment in SAF
reached $1 billion, of which 86% is future commitments,
based on assumed energy prices
LanzaJet (sustainable fuels producer)
Nova Pangaea
Carbon removals • Refining the IAG carbon removals roadmap, and
supporting the inclusion of carbon removals in the global
CORSIA scheme, and UK and EU ETS
Heirloom (carbon capture start-up)
CUR8 (carbon removal platform)
Market-based
measures and offsets
• Support for the global CORSIA scheme to limit
netemissions from aviation
• Continue advocacy to strengthen CORSIA
CHOOOSE (customer offsetting platform)
Supply chain • 90% of suppliers by spend have submitted scorecards
onESG performance
• Supplier contract clause on sustainability
EcoVadis (business sustainability ratings)
Watershed (emissions reporting platform)
Latest IAG roadmap to net zero
million tonnes CO
2
(MT)
The version below is a core Group
scenario which assumes continued
policy support for aviation
decarbonisation, an overall recovery
to2019 levels of passenger demand
by2024 and annual demand growth
aligned with the long-term growth
forecasts disclosed in notes 4 and 17 of
the financial statements.
Changes to our roadmap in 2023 focus
on increasing the use of SAF in our
operations in the short term, and our
investment in carbon removals before
2030. Beyond 2030, it maintains an
assumption that hydrogen aircraft will
be introduced tothefleet from 2040,
and a 5% emissions saving from airspace
modernisation will be achieved by 2050.
Sustainability continued
A. Planet
12

Future carbon intensity
Delivery of IAG’s current decarbonisation
plans, dependent on appropriate policy
support, is expected to enable the
following changes versus 2019:
Gross carbon emissions (MT CO
2
):
• 2030 – 15% lower
• 2050 – 73% lower
Gross carbon intensity (gCO
2
/pkm):
• 2025 – 12% lower
• 2030 – 27% lower
• 2035 – 39% lower
• 2050 – 83% lower
Carbon removal solutions extract CO
2
already in the
atmosphere and store itinbiological or geological ways.
Examples of carbon removal include:
• Nature-Based Solutions (NBS) –include creating new forests
andpeatland;
• BioEnergy Carbon Capture and Storage (BECCS) – capturing
biogenic carbon from industrial facilities and storing it in, e.g.
underground aquifers;
• Carbon Capture and Storage (CCS) with SAF production – as
above and including the use of byproducts which can absorb
CO
2
; and
• Direct Air Capture (DAC) – absorbingCO
2
directly from the
air using acatalyst.
IAG sees carbon avoidance projects asakey transitional
solution en route tofull use of removals. Carbon removal
projects differ from carbon avoidance projects, which prevent
the future release of CO
2
.
IAG expects to use carbon removals tomeet an increasing share
of its CORSIA obligations between 2024 and 2035, conditional on
appropriate policy, and supports wider guidance on how
totransition to removals such as the Oxford Offsetting Principles.
The Group continues to advocate forpolicies that will accelerate
global uptake of carbon removals, via the Coalition for Negative
Emissions and other trade associations listed in A.1.7., and
supports the inclusion of removals in the EU, Swiss and UK ETS.
Group airlines have offered customers the opportunity to make
a financial contribution to support carbon removals projects
since 2022. British Airways customers have supported removals
projects including mangrove restoration in Pakistan and a
biochar project in Oregon, USA.
By 2050, IAG will only use carbon removals to mitigate any
residual emissions from its operations.
IAG will only work with suppliers who do the same, as part of
meeting the Group’s Scope 3 commitment. IAG is already
encouraging suppliers to transition from offsets to removals as
part of a new supplier contract clause which is being rolled out
across its supply chain.
IAG is committed to supporting a variety of innovative carbon
removals solutions and is considering projects that are
immediately available and independently verified today, as well
as more innovative technology solutions.
Ourinvestment in Greenhouse Gas Removal (GGR) technologies
involves a combination of forward delivery procurement and
project financial support, facilitating the scale-up ofGGR
technologies alongside relevant government support.
When IAG or its operating companies choose to voluntarily
invest in carbon avoidance and removal projects, they work in
collaboration with key partners, carry out due diligence to
select reputable providers and select projects carefully to meet
and align with verifiedquality standards, such as GoldStandard,
Puro Standard and Verified Carbon Standard (VCS).
In 2023, British Airways worked in partnership with CUR8 (a
UK-based company dedicated to building the global market for
carbon removals), UNDO (a world-leading carbon dioxide
removal project developer specialising in enhanced rock
weathering), and Standard Chartered, representing financial
institutions, to launch a first-of-a-kind financing pilot designed
to help scale-up the carbon removals market.
The pilot aims to support the scale-up of the carbon removals
market by creating a blueprint to enable carbon removal
suppliers to access capital in the form of debt financing via
advanced purchase agreements. British Airways has committed
to purchase more than 4,000 tonnes of carbon removal credits
delivered by UNDO through enhanced rock weathering, and
Standard Chartered is looking to be the banking partner.
Carbon removals
Introduction Advocacy for carbon removal policy
Role in IAG transition plan
Investing in carbon removals
IAG supports the inclusion of carbon
removals in industry decarbonisation
pathways, and in external assessments
of support for the 1.5°C global ambition.
IAG’s short- and long-term targets have
been independently assessed by the
Transition Pathway Initiative (TPI)
as1.5°C-aligned and its mid-term target
assessed as well-below-2°C-aligned. The
TPI assessment compared the
milestones in the 2021 IAG roadmap
withan industry-wide pathway modelled
bythe International Energy Agency
(IEA), taking removals commitments
into account.
IAG began investing in ZeroAvia in
2020, a leading developer of
hydrogen-electric, zero-emission
aviation. IAG increased its
investment in 2022, to advance
ZeroAvia's 2-5 MW hydrogen-
electric powertrain development
programme.
13

205020452040203520302020 2025
CCS with SAF production
DAC
BECCS
8
Total
NBS
Blue Carbon Mangrove project
The Blue Carbon Mangrove project in the
Indus Delta area in Pakistan is a nature-based
carbon removal project (where plants absorb
carbon from the atmosphere through
photosynthesis). The project will support
greenhouse gasremoval by reforestation
andrevegetation of approximately
225,000hectares of degraded tidal wetlands
with mangrove and other species to absorb
carbon dioxide, stabilise the area andprotect
the coastal area andcommunities.
Freres Biochar project
The Freres Biochar project in Oregon, USA,
involves a biomass power production plant that
produces biochar, a carbon-rich, charcoal-like
material that is created when agricultural and
wood waste is used as fuel. The process feeds
carbon into the soil and prevents it from
naturally decaying, locking carbon away and
keeping it out of the atmosphere for several
hundred years.
Key carbon removal projects
Carbon removals within our 2050 roadmap
MT CO
2
Based on the latest roadmap, the Group expects to use approximately 100 MT of carbon removals between 2022 and 2050
tomitigate Scope 1 emissions and could potentially be removing 2 MT annually in 2030, conditional on clear and globally
agreedverification and quality standards for removals, inclusion of removals in ETS schemes, and stable policy support.
Sustainability continued
A. Planet
14

A.1.3. Metrics and progress
Overview
IAG’s transition plan focuses on reducing
CO
2
from jet fuel use, as this represents
over 99% of Scope 1 emissions.
TheGroup measures its full carbon
footprint and tracks multiple metrics
each quarter to ensure progress
ontackling climate change.
2023 saw strong progress against
thekey metric of carbon efficiency.
With a 3.6% annual improvement to 80.5
gCO
2
/pkm, the Group is on track to
deliver our carbon efficiency target of
80.0 gCO
2
/pkm by 2025, accounting
foremissions reductions achieved
fromSAF.
Scope 1
Scope 2
Scope 3
Total
32,212,000
100%
Scope 2
12,000
0.04%
Scope 3
6,526,000
20.26%
Scope 1
25,674,000
79.70%
Total
6,526,000
100%
Fuel and
energy-related
activities
83%
Capital goods
2%
Franchises
7%
All other Scope 3
categories
8%
Calculation methodology
Emissions are calculated by multiplying
fuel and energy use by appropriate
conversion factors that are aligned
withthe Intergovernmental Panel on
Climate Change (IPCC) Fourth
Assessment Report. 2023 UK
Government conversion factors are
applied across the Group as these are
deemed to be the most robust available.
Other factors such as International
Energy Agency emissions factors are
used in specific cases as described in the
IAG statement of non-financial
information.
2023 emissions (tonnes CO
2
e)
1,2
Scope 3 emissions (tonnes CO
2
e)
1,2
Scope 1
Scope 2
Scope 3
Scope 2
20,000
0.05%
Scope 3
8,265,000
21.18%
Scope 1
30,744,000
78.77%
Total
39,029,000
100%
2019 emissions (tonnes CO
2
e)
1
Our carbon intensity calculation includes
CO
2
emission reductions achieved from
SAF. SAF reductions arecalculated
using actual life cycle analysis (LCA)
carbon intensity values for SAF fuel
uplifted by airlines in the Group, and
subtracting the achieved emission
reductions from our total CO
2
footprint.
IAG discloses methane (CH
4
) and nitrous
oxide (N
2
O) as Scope 1 non-CO
2
greenhouse gases (GHGs), in line
withthe UK conversion factors.
In 2023, emissions of CH
4
were 18,009
tonnes and N
2
O were 216,542 tonnes.
A detailed Scope 3 emissions
breakdown is available in the IAG
statement of non-financial information.
1 Rounded to the nearest '000 tonnes CO
2
e.
2 Please refer to details in this section regarding Scope 3 emissions data
collection. Data for Scope 3 emissions reported using existing
methodology, and does not include revised values for Scope 3.1
emissions as identified following a proof-of-concept trial between IAG
GBS and Watershed in 2023.
15

Key emission metrics
Key carbon footprint metric GRI standard Unit vly v2019 2023 2022 2021 2020 2019
Scope 1 CO
2
e 305-1 MT CO
2
e 22% (16%) 25.67 21.13* 10.92 11.02 30.74*
Net Scope 1 CO
2
e MT CO
2
e 19% (15%) 22.82 19.10* 10.50 10.85 26.95*
Scope 2 location-based 305-2 kt CO
2
e 11% (24%) 56.5 51.1 39.2 48.2 74.6*
Scope 2 market-based 305-2 kt CO
2
e 6% (37%) 12.4 11.7 8.4 9.3 19.7*
Scope 3
1
305-3 MT CO
2
e 19% (21%) 6.53 5.48 3.32 3.66* 8.27*
Key emission reduction metric GRI standard Unit vly v2019 2023 2022 2021 2020 2019
Flight-only carbon intensity
(exclusive of SAF CO
2
reductions)
2
305-4 gCO
2
/pkm (3%) (10%) 81.0 83.6 94.5 106.2 89.8
Flight-only carbon intensity
(inclusive of SAF CO
2
reductions)
2
305-4 gCO
2
/pkm (4%) (10%) 80.5 83.5 94.5 106.2 89.8
GHG reduction initiatives 305-5 ktCO
2
e 5% 12% 86.7 82.4 59.7 17.2 77.4
Emissions covered by ETS
(UK, EU, Swiss) MT CO
2
e (1%) (26%) 5.68 5.74 2.71 2.32 7.66
Net reduction (SAF uplift) ktCO
2
418% n/a 157.1 30.3 6.5 n/a n/a
Net reduction (ETS
3
) ktCO
2
e 45% (18%) 2,604 1,796 219 0 3,182
Net reduction (offset projects) ktCO
2
e 17% n/a 246 229 196* 168 n/a
Average fleet age years >1% 6% 12.0 11.9 11.2 10.6 11.4
Other metric GRI standard Unit vly v2019 2023 2022 2021 2020 2019
Scope 2 carbon intensity 305-4 gCO
2
/pkm (12%) (19%) 0.18 0.20 0.34 0.47 0.22*
Revenue per tonne CO
2
e €/tonne CO
2
e 5% 38% 1,145 1,088 771 705 827
Jet fuel 301-1 MT fuel 22% (16%) 8.11 6.64 3.42 3.45 9.65
SAF kt fuel 417% n/a 53.3 10.3 2.4 nr nr
Electricity 302-1 ‘000 MWh 1% (19%) 217.0 213.7 189.0 200.1 267.7
Energy 302-1 Mn MWh 24% (15%) 100.7 81.5 42.1 41.9 119.7
Renewable electricity
4
% 0pts 9pts 81% 81% 86% 86% 72%
Renewable energy % 0.5pts 0.7pts 0.9% 0.4% 0.5% 0.4% 0.2%
Descriptions and commentary on other metrics are available in the Additional Disclosures section of the IAG statement of non-financial information.
Note: ‘nr’ means ‘not reported’. * means restated using the latest data and assumptions.
1 Please refer to details below regarding Scope 3 emissions data collection. Data for Scope 3 emissions reported using existing methodology,
anddoesnot include revised values for Scope 3.1 emissions as identified following a proof-of-concept trial between IAG GBS and Watershed in 2023.
2 pkm means ‘passenger-km’. The passenger-km used for this calculation is 273,607 million, which excludes no-show passengers. The cargo-tonne-km
used is 4,386 million, which excludes cargo carried on other airlines or trucks. The jet fuel used excludes fuel for franchises and engine testing.
3 2020 emissions were below the EU ETS sector cap for aviation so no net reductions were delivered.
4 For completeness, Scope 2 emissions cover electricity use at airports and overseas offices, which are partly outside IAG’s operational control.
As part of complying with the UK Streamlined Energy and Carbon Reporting regulation, 58% of Group energy use was UK energy use, based onScope
1 emissions and Group electricity use in UK-based offices, up from 56% in 2022.
Scope 3 emissions calculations
IAG Scope 3 emissions accounted for approximately 20% of total emissions in 2023. Our target is to achieve a 20% drop in net
Scope 3 emissions compared to the 2019 baseline, from 8.3 MT to6.6 MTby 2030. In 2023 IAG Scope 3 emissions were 6.5 million
tonnes CO
2
e.
IAG GBS operates a supply chain sustainability programme which includes ESG scorecards and supplier risk screening.
In 2023, IAGGBS ran a proof-of-concept trial with Watershed to improve Scope 3.1 emissions reporting across the Group. In
previous measurements, IAG reported Scope 3.1 emissions based on emissions calculated from water usage only. Under the trial with
Watershed, a spend-based methodology for Scope 3.1 emissions was applied, combining IAG GBS supply chain spend data with
Watershed’s emissions database. This improved reporting accuracy as emissions factors could be associated with the location and
business activities of each supplier, including supplier-specific emission factors for those with CDP disclosures. The results of this trial
are provided alongside previous emissions data captured in our Scope 3 emissions submission.
IAG is expanding this research across ourScope 3 activities in 2024, to improve our data collection across all Scope 3 emission categories.
Sustainability continued
A. Planet
16

Other metric
GRI
standard Unit
% of Scope
3 emissions v2019 2023 2022 2021 2020 2019
Fuel and energy-related
activities (Scope 3.3) 305-3 tCO
2
e 83% (15%) 5,424,914 4,399,985* 2,266,587* 2,284,992 6,371,621
Franchises (Scope 3.14) 305-3 tCO
2
e 7% (44%) 449,848 475,576 369,718 235,167 810,334
Capital goods (Scope 3.2) 305-3 tCO
2
e 2% (77%) 128,000 232,000 424,000 912,000 568,000
Purchased goods/
services (Scope 3.1) 305-3 tCO
2
e >1% (70%) 204 268 229 525 689
(Scope 3.1 emissions data
following Watershed
proof-of-concept trial) (2,762,833) (2,028,326) (1,172,771) (1,398,858) (2,731,217)
All other Scope 3
categories 305-3 tCO
2
e 8% 2% 523,501 387,579 264,457* 227,033 514,618
Total Scope 3 emissions 305-3 tCO
2
e N/A (21%) 6,526,467 5,495,408* 3,324,992 3,659,717 8,265,262
Descriptions and commentary on other Scope 3 category metrics are available in the Additional Disclosures section of the IAG statement of non
financial information.
Note: Data from Watershed trial is not included in Total Scope 3 emissions. * means restated using the latest data and assumptions.
Carbon footprint calculation methodologies
The Group’s airlines offer passengers the ability to calculate their emissions footprint associated with their flights. This emissions
footprint is estimated using a carbon calculator, which determines a volume of CO
2
emissions that an aircraft emits per passenger
over a defined flight route and cabin.
Additionally, some airlines offer customers the opportunity to offset or mitigate part of their emissions through investing in carbon
removals projects and/or SAF.
IAG continues to develop the carbon calculation methodology that underpins our passenger emission calculators used by the Group,
and advocates for an industry-wide standard that provides transparency and simplicity for customers.
Key developments in 2023 include:
• Aer Lingus continues its partnership with charity Pure Leapfrog to help passengers contribute towards mitigating some of the
emissions generated from their flights;
• British Airways continues to collaborate with the CHOOOSE platform that enables customers to understand their flight emissions
and take steps to address their climate impact before or after their journey, or directly from their seat on board. This includes
carbon removals from the ‘case study’ projects listed in section A.1.2.;
• Iberia has certified its carbon footprint calculator methodology with AENOR (third-party verification entity); and
• Vueling offers its customers the opportunity to make a contribution to the supply of SAF. Vueling matches its customers’
contributions, doubling the amount of SAF supplied. Almost 197,000 passengers have contributed 246 tonnes of SAF purchased
since the initiative started in 2022. Passengers can also mitigate flight emissions by contributing towards the purchase of carbon
removals though the collaboration with CHOOOSE.
Non-CO
2
effects
IAG is supporting the ongoing research and development of mitigations for the non-CO
2
effects of aviation. This includes
participating in the UK Jet Zero Council’s non-CO
2
working group, and supporting research by the Rocky Mountain Institute (RMI).
The Group’s airlines already participate in several non-CO
2
research projects.
• British Airways and Iberia are collaborating with Breakthrough Energy to identify which of our flights’ trajectories pass through
Ice Super-Saturated Regions (ISSR) and may contribute to non-CO
2
climate effects;
• Iberia participates in the IAGOS* project, which combines the knowledge of scientific institutions with the civil aviation
operations to obtain essential data on atmosphere and air quality conditions for the subsequent development of more accurate
climate models. New IAGOS equipment has been installed in an Airbus A330-200 which mainly operates routes across the
Atlantic, providing atmospheric data from a valuable climate region;
• Vueling completed several trials with SATAVIA** that aimed to reduce the creation of contrails and measure the improvements
from adjustments made in-flight; and
• Group airlines are also preparing to monitor, report and verify non-CO
2
emissions for their future obligations under the EU ETS
from 2025.
IAG advocates for further scientific research to support effective policy-making that can deliver true emission reductions.
* IAGOS - In-service Aircraft For a Global Observing System
** SATAAVIA - Company supporting airline control management
17

A.1.4. Emissions reduction initiatives
Relevant standards: TR-AL-110a2. GRI 305-5.
Reducing gross and net emissions is a collective effort across the Group. Examples are provided throughout this report.
By 2030, fleet renewal and SAF programmes will have the biggest impact on reducing gross emissions, and CORSIA will have the
biggest impact on reducing net emissions. In addition, other specific initiatives are run within operating airlines.
Our savings from key initiatives in 2023, rounded to the nearest 1,000 tonnes, are shown in the table below. See section ‘Leading our
industry in SAF projects’ for more details on our emission reductions:
Fleet efficiency SAF Operational efficiency Carbon markets Supply chain
€12 billion 157,000 86,000 2.6m 38
investment between
2024 and 2028 for 178
new, more efficient
aircraft
tonnes of CO
2
saved
from SAF used this
year, representing 0.6%
of our total annual
emission
tonnes of CO
2
e saved
from operational
efficiency initiatives such
as reduced use of
landing flaps, single-
engine taxi-in and
reduced weight
on-board
net tonnes of CO
2
e
reduced through
participation in carbon
pricing mechanisms
including the EU ETS,
UK ETS and Swiss ETS
supply chain audits
were completed in
2023
Examples of emission reduction initiatives across the Group:
Operating company 2023 examples Initiative type
Aer Lingus Aer Lingus took its first new Airbus A320 aircraft delivery flight with 50% Sustainable Aviation
Fuel onboard. 2023 also saw Aer Lingus procure SAF for the first time at London Heathrow as
part of the Group deal with Phillips 66.
Fleet
efficiency and
SAF
More efficient alternate routings. This change means that one-third of Aer Lingus flights can
carry 160kg less fuel, reducing daily CO
2
emissions by 3.2 tonnes.
Operational
efficiency
British Airways British Airways was the first airline in the world to use SAF produced on a commercial scale in
the UK after signing a multi-year agreement with Phillips 66.
SAF
British Airways took delivery of 10 new aircraft into the fleet, whilst retiring some of its older
aircraft, which continues to help increase CO
2
efficiency.
Fleet
efficiency
Sustainability is now integrated into annual pilot simulator checks with training rolled out across
all fleets and a sustainability update issued to all flight crew.
Operational
efficiency
IAG Cargo IAG Cargo allows customers to purchase Scope 3 emission reductions from SAF production to
support their own emissions reductions. In 2023, customers including Bolloré Logistics, DB
Schenker, DHL Global Forwarding and Kuehne + Nagel engaged with this programme.
SAF and
Supply Chain
IAG Cargo delivered trials including a lease of 40 tractor units running on Hydrogenated Vegetable
Oil (HVO) biofuel, and an electric tractor.
Operational
efficiency
IAG GBS IAG GBS operated a proof-of-concept trial with Watershed, a digital automated solution for
carbon calculation measurement and sustainability accounting, to improve reporting of its
Scope 3, category 1 (purchased goods andservices) emissions footprint. See Section A.1.3.
formore details.
Supply chain
IAG GBS continues to partner with other companies through the ‘Business vs Smog’ programme
to leverage its resources to help the fight against climate change. During the five years that GBS
has been involved, programme volunteers have run 2,000 free workshops for 45,000
participants in 150 towns.
Supply chain
IAG Loyalty British Airways Executive Club members can use their Avios to contribute towards the purchase
of SAF onshort-haul flights via the High Life Café.
SAF
IAG Tech Migration of IT services to Amazon cloud servers, saving energy and reducing CO
2
. Supply chain
Iberia Iberia continues to deliver efficiency initiatives across the whole flight phase including take-off,
cruise, approachand landing.
Operational
efficiency
Iberia welcomed six new Airbus A350-900, which increase CO
2
efficiency and reduce carbon
emissions byaround 65,000 tCO
2
e compared to 2022.
Fleet
efficiency
Vueling Vueling took delivery of four Airbus A321neos, increasing carbon efficiency by 20% by saving
fuel and having ahigher passenger capacity than the aircraft they replace.
Fleet
efficiency
Vueling is working with EUROCONTROL and ENAIRE to define a new KPI that measures the
airspace efficiency according toCO
2
emissions instead of distance flown. This will support
changes within European airspace and promote optimal trajectories that reduce CO
2
emissions.
Operational
efficiency
Vueling was the first European LCC to partner with WheelTug, to accelerate the development of
its device that will allow minimising engine use on the ground, reducing emissions and noise.
Operational
efficiency
Sustainability continued
A. Planet
18

Fuel efficiency programme
As part of the IAG sustainability
commitment, each Group airline has
afuel efficiency programme which
supports flight planning and enables
pilots to increase fuel efficiency.
Bestpractices are shared across the
Group toleverage synergies and further
increase fuel efficiency.
2023 examples include:
• British Airways and Vueling deployed
NAVlink Wind Updates services in
their A320 fleets. NAVlink provides
optimised in-flight wind data updates,
allowing pilots to plan a more efficient
descent trajectory. NAVlink has
proven to reduce around 22kg of CO
2
emissions per descent. This
partnership was developed with the
support of Hangar 51 – IAG’s
innovation team;
• Group airlines collaborated with
Honeywell for the use of its Forge
software. This software uses in-flight
data to improve flight planning and
increase fuel efficiency; and
• Vueling has implemented the ‘Pilot
App’ which provides transparent data
on individual pilots' contribution
towards sustainability goals. This app
tracks the CO
2
emissions saved during
each flight, enhancing decision-
making in their day-to-day duties.
A.1.5. Scenario analysis
Overview
In 2023, IAG carried out multiple
andaligned forms of scenario analysis:
• the IAG Sustainability team and the
Enterprise Risk Management (ERM)
team reviewed all climate-related
risksand opportunities and potential
impacts to 2026 and 2030.
Theimpacts of material risks are
quantified as part of the Company-
wide ERM process which receives
Board oversight;
• operating airlines modelled
compliance-related costs, including
from the UK and EU ETS and CORSIA,
to 2050;
• TCFD-aligned scenario analysis was
repeated using a dual timeframe
of2030 and 2050; and
• ongoing analysis was carried out
onthe Flightpath Net Zero strategy
to2050.
This scenario work informs strategy,
planning, risk management and financial
management.
IAG takes a proactive approach to
managing climate-related risks and
opportunities, and is committed to
managing their regulatory, reputational,
financial, market and technology aspects.
Applying carbon prices
IAG concurrently applies carbon prices
to financial planning and to future
scenario analysis.
The Fleet team uses updated carbon
prices and price forecasts for short-haul
and long-haul fleet purchasing decisions,
based on market values and reputable
external sources. The Group airlines use
carbon prices in financial planning, and
flight operations teams and pilots use
carbon prices in operational decisions
about fuel uptake.
Potential acquisitions include an
assessment of exposure to climate-
related issues and policy.
For the period 2024 to 2033, UK ETS
prices of £55 – £89/tonne, EU ETS
prices of €84 – €124/tonne and CORSIA
prices of $11 – $25/tonne were used for
modelling compliance costs.
EU and UK ETS prices are based on
market prices and the UK Department
forTransport (DfT) Aviation Forecast,
andCORSIA prices are based on internal
analysis and ICAO industry price forecasts.
TCFD-aligned scenario analysis
Since 2018 IAG has been incorporating
the TCFD recommended guidance on
climate risk disclosures. In 2023, IAG
repeated a TCFD-aligned scenario
analysis exercise, building on previous
years’ exercises.
This was a structured, qualitative
discussion of potential climate-related
impacts and business responses, using
the latest evidence and analysis from
reputable sources like the UN,
EUROCONTROL and Climate Action
Tracker (CAT). IAG conducted its 2023
analysis in line with the latest TCFD
guidance update published in 2021.
Temperature scenarios of 1.5°C
1
were
chosen for transitional risks, in
recognition of IAG and global targets.
The 2°C and 3°C warming scenarios
were chosen for physical risks, based on
the latest UN projections.
The year 2030 was chosen as the key
timeframe, based on IAG targets and
key policy timelines, e.g. for SAF
mandates. The year 2040 was also
considered due to the possibility of the
world overshooting 1.5°C in the 2030s
leading to faster societal changes.
IAG exercises involved representatives
from multiple teams including Strategy,
Treasury, Finance, Government Affairs,
Commercial Planning, Investor Relations,
People, Enterprise Risk Management,
IAG Tech, IAG GBS, IAG Loyalty and
sustainability representatives from
alloperating airlines. The Group
Sustainability team collated inputs,
which were reviewed by the IAG
Sustainability Steering Group and the
Safety, Environment and Corporate
Responsibility (SECR) Committee.
The Group remains resilient to the most
material climate-related impacts –
industry-wide policy shifts – and these
have been quantified and mitigation
plans embedded into financial and
strategic planning. Industry-wide
changes also create opportunities for
the Group to become more resilient than
its competitors.
To address significant uncertainty
around future policy, technology and
market trends, IAG is repeating this
scenario analysis annually. We will keep
implementing action plans in coming
years to further improve resilience
towider changes.
1 ‘Orderly’ and ‘Disorderly’ scenarios were chosen as per TCFD definitions. These scenarios
compare smooth, predictable and idealised climate-related changes with abrupt, variable and
disjointed changes across regions.
19

TCFD
risk type Risk and/or opportunity combined description
Risk time
frame Risk trend
1
Scenario
dependency
2
Physical Resilience to acute weather events M Stable Temperature
Resilience of routes and assets to chronic climate changes L Stable Temperature
Market Customer spend due to perceptions of ESG progress in IAG or the
aviation sector
S Down Transition
Perceived quality of offset and removal projects M Up Transition
Supply chain readiness L Stable Transition
SAF delivery against committed offtake agreement volumes M Up Transition
Policy Litigation against claimed carbon reductions from offsetting S Up Transition
Demand impact of EU and UK climate policy L Stable Transition
Resilience to changes in ETS/CORSIA pricing M Up Transition
Policy asymmetry across regions M Up Transition
Extra regulation on activity rather than emissions L Stable Transition
Lack of supporting SAF infrastructure or policy M Down Transition
Regulation on non-CO
2
effects M Up Transition
Technology Access to and readiness for lower-emission technologies L Stable Transition
Access to SAF supply M Down Transition
Key: short-term (S) is 1-3 years, medium-term (M) is up to 5 years, long-term (L) is more than 5 years.
IAG continues to analyse risk and transition scenarios to inform mitigation plans to 2030. Key parameters for defining scenarios are
below, based on UN, Climate Action Tracker (CAT), UK Climate Change Committee and internal analysis. These are kept under
review.
Physical risk parameters Current projection 2°C scenario 3°C scenario
Global scenario to 2100 2.4°C RCP
3
2.6 RCP 4.5
Transition risk parameters – 2030 Current policies/projections Current targets 1.5°C-aligned scenario
Global emissions vs 2019 0% -7% -41% (-27%)
4
UK emissions vs 2019 -28% -42% -42%
EU emissions vs 1990 -55% (via Fit for 55) -55% -62%
US emissions vs 2005 -37% -50% -58%
Aviation (net) emissions vs 2019 -15% (via CORSIA) -15% -15%
1 Risks might be increasing (up), decreasing (down) or stabilising from a business perspective. IAG calculates this based on central strategy modelling
and economic forecasting, and the risk trend shown is based on an end-of-year assessment, relative to in-year review.
2 Whether the cost impacts depend more on the temperature scenario (2°C or 3°C), or type of transition (Orderly or Disorderly).
3 Representative Concentration Pathway (RCP), a globally recognised scenario for physical changes under different temperature ranges.
4 A 41% drop by 2030 represents an Orderly transition. A 27% drop represents a Disorderly transition because smaller global emissions reductions
to2030 require rapid decarbonisation after 2030 to return to 1.5°C by 2100.
A.1.6. Risks and opportunities
Climate-related risks are assessed and
managed within the ERM framework as
described in Section C.6. and in the Risk
management and principal risks factors
section under the principal risk
‘Sustainable aviation’. Opportunities are
managed within relevant teams.
Transitional risks primarily affect airline
activity between European destinations,
which contributed to 34% of flying
activity in 2023. Physical risks could
affect IAG operations across its global
network, reflecting the global nature of
climate change.
IAG considers the relevant risk factors
that could impact each risk by region
and timescale. Such variability may arise
from fragmented policy definition, scope
and implementation, changeable market
perceptions, or unpredictable delivery of
new technology (among other causes).
IAG considers its mitigation strategy for
each risk accordingly. Please refer to the
‘Risk impacts and mitigation’ table for
more information.
The carbon-reduction targets in the
Flightpath Net Zero strategy are the key
measures for assessing the mitigation of
these risks, along with the consideration
of these risks in relevant governance
processes. The external risk
environment, materiality of risks,
mitigation actions and KPIs for these
mitigating actions are reviewed
regularly.
The table below lists risks assessed
through the ERM process. The most
material risks are policy risks. Risk
timeframes align withcorporate
planning timelines.
Sustainability continued
A. Planet
20

Risk impacts and mitigation
Description as per previous page Potential unmitigated financial impacts How IAG is mitigating
Physical
Resilience to acute
weatherevents
Days of lost revenue due to additional
flightdisruption and associated mitigation
andpassenger compensation costs
Existing operational resilience processes
canminimise extra disruption (for example
frommoreturbulence from US-UK flights)
Resilience of routes and
assets to chronic climate
changes
Changed revenue from a different route network
ora different frequency of flights to climate-
affected destinations, changes in operational
maintenance costs
Scale of route network means impacts above
plan are not material so no immediate action
needed. Aircraft are mobile assets which can be
moved to different locations to account fore.g.
more hurricanes in the Caribbean
Market
Customer spend due to
perceptions of ESG progress
in IAG or the aviation sector
Customers change frequency of flying, duration
oftrips, or spend less relative to other carriers
orother travel modes
Delivering emissions reductions, developing
emissions dashboards for customers,
expanding customer communications, support
for global instruments like CORSIA, working via
trade associations to advance solutions
Perceived quality of offset
and removal projects
Exposure to sudden variability in prices, cost of
CORSIA credits, scale of growth in costs by 2050
due to available volume of removals to deliver
netzero
Strategy to avoid price spikes, governance
toensure offset quality, a removals roadmap
based on external evidence, advocacy
forpolicy support and monitoring regimes
Supply chain readiness Sustainability compliance or technology change
causing unplanned changes in cost of goods and
services provided to IAG or associated supplier
management costs, margin erosion
Supply chain sustainability programme
whichincludes ESG scorecards and supplier
risk screening
SAF delivery against
committed offtake
agreements
SAF delivery from agreed commitments fail to
materialise from weak market supply or failed
project development, exposing IAG to market
priced SAF, buyout penalties or carbon costs
Securing SAF deals and taking equity in
early-stage projects where relevant. Monitoring
SAF project development and seeking volume
above target levels
Policy
Litigation against claimed
carbon reductions from
offsetting
Litigation for use of credits towards voluntary or
compliance offsetting that do not deliver claimed
emission reductions leads to legal cost
Due diligence conducted on carbon offsetting
projects, internal guidance prepared for
external communications
Demand impact of EU
andUKclimate policy
Pass-through of industry-wide costs affects ticket
prices and, therefore, demand
Impacts of emerging policy assessed as part
oflonger-term financial planning and strategy
Resilience to changes in
CORSIA/ETS pricing
Exposure to long-term price increases affects
compliance costs
Strategy to reduce impact of price spikes; using
carbon prices in fleet and financial planning
Policy asymmetry across
regions
Changing numbers of customers relative to other
carriers who are under more favourable or more
restrictive policy regimes
Advocacy for global solutions such as the ICAO
Long-Term Aspirational Goal agreed in 2022
Extra regulation on activity
rather thanemissions
Industry-wide taxes or levies increase operating
costs and have potential demand impacts; demand
management measures equate to lost revenue.
Noise restrictions are not included in this risk but
are reviewed as a separate risk through the ERM
framework
Advocacy in support of emissions-reducing
measures like SAF and against economically
inefficient measures like taxes
Lack of supporting SAF
infrastructure or policy
Higher prices of SAF in core markets due to lack of
investment in SAF production or cost of inputs
Advocacy for SAF policy, e.g. via UK Jet Zero
Council, and a strategy to procure SAF in
regions where supportive policy exists
Regulation on non-CO
2
effects
Potential multiplier on ETS costs, lost revenue due
to route restrictions, or operational costs due to
non-CO
2
management
External research suggests just 10% of flights
could account for 80% of impacts. Advocacy
via trade associations to support monitoring
and targeted solutions such as route
optimisation and SAF uptake
Technology
Access to and readiness for
lower-emission technologies
Higher ETS costs if technology access is restricted
or technology development is slow
Hangar 51 Ventures team aligns research and
work with the Flightpath Net Zero strategy
Access to SAF Changing unit prices of SAF in core markets Securing SAF deals and taking equity in early
stage projects where relevant
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21

A.1.7. Stakeholder engagement
Relevant standards: GRI 102-
13/43/44
Overview
The aviation industry will decarbonise
faster with stakeholder and policy
support.
The Group and its operating airlines
regularly engage with key stakeholders:
governments and regulators, shareholders,
lenders and other financial stakeholders,
trade associations, customers, suppliers,
employees, communities, NGOs and
academic institutions to advocate for
support foremissions reductions and to
share progress on Flightpath Net Zero.
Following our successful first IAG ESG
day for investors in 2022, IAG delivered
a sustainability update as part of its
Capital Markets Day in November 2023.
Internal governance ensures that wider
stakeholder engagement on climate
change is consistent with material issues
and environmental goals.
Key stances on climate change
IAG supports cost-effective approaches
to deliver net zero emissions by 2050,
advance low-carbon solutions, and
support global efforts to align with 1.5°C.
Actions within associations focused on
UK aviation, Spanish aviation and global
aviation policy are listed in the table
opposite. If the climate-related positions
of trade associations are deemed to be
substantially weaker or inconsistent
withthese internal stances, IAG
representatives take roles on task forces
and working groups and respond
toconsultations to communicate
ourposition and constructively move
toalignment.
IAG is proud to have consistent views on
climate change with all the organisations
of which it is a member (below). IAG has
positively influenced this outcome by
contributing expertise and time to drive
net zero commitments, and create and
support roadmaps to net zero emissions
across SA, A4E, oneworld, JZC, and
ATAG. IAG has also driven and
encouraged higher SAF ambitions
across the JZC, oneworld andWEF. IAG
and key trade associations are listed on
the EU Transparency Register.
Key principles of climate-related
engagement
Aviation is a global industry and IAG
remains committed to global
policyapproaches.
IAG supports carbon pricing asakey
instrument to determine both thepace
of emissions reductions for theaviation
industry and the balance ofin-sector
and out-of-sector reductions. We
advocate for the use ofgreenhouse gas
emission removal technologies in carbon
markets, bybothnatural and engineered
means. By 2050 we are committed to
using onlyGGRs to cover ourresidual
carbon emissions.
IAG prioritises policy advocacy on SAF
too, asthis is a key emissions reduction
driver in the next decade, and supports
policies on operational efficiency,
zero-emission aircraft and carbon
offsets and removals.
The Group seeks to ensure that policies
delivered are effective and fair across
multiple airlines.
Luis Gallego participated
inasustainability panel
attheSustainability Skies
WorldSummit2023.
Risks associated with SAF
SAF is a key solution in IAG’s
transition plan to net zero (Section
A.1.2.), but remains a developing
market, which in many regions is still
awaiting policy definition to drive
infrastructure investment. IATA
projects SAF production will meet
just 0.5% of global aviation fuel
demand in 2024
1
. IAG separates SAF
risks into market, policy and
technological risks associated with
scaling up the global SAF industry.
IAG considers the respective
impacts on fulfilling IAG’s 2030
commitments and future regulatory
obligations, by modelling the impact
of regional differences in future SAF
supply and costs, associated with
different policies (policy risk), SAF
feedstock technologies (technology
risk) and market prices (market
risk). IAG uses this modelling to
influence SAF strategy and
investments.
1 IATA Pressroom report: SAF Volumes
Growing but Still Missing
Opportunities, published 6 December
2023.
Sustainability continued
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22

Member of organisation IAG involvement in organisation and actions to ensure and move to consistent stances
UK focus
Sustainable Aviation (SA) One of 13 members of SA Council, which governs activities for 44 members
Drove development of SA’s net zero roadmap in 2023, which for the first time included
the demand impact of a net zero transition. IAG was also an active participant in
workstreams to advance low carbon solutions
Jet Zero Council (JZC) Chairs SAF Delivery Group and supported creation of UK Jet Zero Strategy in 2022
todeliver net zero UK aviation by 2050. British Airways CEO a member
Royal Aeronautical Society (RAeS) –
Greener by Design group (GbD)
Executive Committee of GbD, attended non-CO
2
conference in 2022 and 2023 to
understand how best to mitigate these effects
Spain/Europe focus
Grupo Español para el Crecimiento Verde
(Spanish Group for Green Growth)
Formed in 2023. Iberia is one of over 50 corporate members supporting green growth
Alianza para la Sostenibilidad del
Transporte Aéreo en España (AST)
(Spanish Alliance for Sustainable Air
Transport)
The main stakeholders of the Spanish air transport sector formed the alliance with
theobjective of promoting the development of sustainable aviation. Three working
groups have been defined to respond to the main challenges that the sector now faces:
operational efficiency, SAF and policy
Airlines 4 Europe (A4E) Founding member, drove development of net zero roadmap in 2021, supported
ReFuelEU consultation responses and other work to advance low carbon solutions
In 2023, IAG has supported the update of the A4E decarbonisation roadmap, and
participated in working groups looking to develop solutions for non-CO
2
emissions
Global focus
Coalition for Negative Emissions Founding member in 2020, Steering Group member, active contributor to consultation
responses to UK Government on how to scale up carbon removals
oneworld (represents 15 airlines) Chaired the Environment Strategy Board (ESB), coordinated net zero roadmap
and10% SAF ambition across 2020-21, hosted two ESB meetings in London in 2023,
continues to provide support for advancing low carbon solutions
Air Transport Action Group (ATAG) Significant airline contributor to global aviation roadmap to net zero in 2020-21,
whichhelps to inform industry priorities for continual advancement of low carbon
solutions
World Economic Forum (WEF) – Clean
Skies for Tomorrow Coalition
Regular contributor to reports on how to scale up SAF as a low-carbon solution,
advocated for 10% SAF ambition by 2030
IATA (represents 300 airlines worldwide) Chaired the IATA Sustainability and Environment Advisory Council (SEAC),
representatives on IATA working groups to advance policies for low carbon solutions,
supported advocacy for net zero commitment at ICAO and strengthening of CORSIA
baseline. Moderated a panel at the inaugural IATA World Sustainability Symposium in
Madrid in October 2023
IAG are an investor in Nova
Pangea, an innovative company
producing SAF feedstock.
Jonathon Counsell, IAG Group
Head of Sustainability and Jim
Davies, IAG Programme Director
– Sustainable Flight are pictured
here with Anthony Brown MP,
UK Aviation Minister and Sarah
Ellerby, CEO Nova Pangea.
23

UK – Jet Zero Council
The UK Government’s Jet Zero Council
(JZC) launched in 2021 as the first of
itskind partnership between the aviation
industry and Government. The JZC aims
to provide advice on the Government’s
ambitions to deliver net zero aviation
and zero-emission flights. It brings
together ministers and CEO-level
stakeholders, with regular meetings
andsubgroups to drive the ambitious
delivery of new technologies and
innovation to cut aviation emissions.
Through the success of the JZC, several
countries have followed its example,
including in Spain and Ireland.
In 2023 IAG supported the JZC’s
focuson SAF. This included the UK
Government’s second consultation on
SAF, participation in the SAF mandate
sub group and the commercialisation
sub group, and supporting a revenue
certainty mechanism for SAF, which
theUK Government has now committed
to through the UK Energy Bill.
The Ninth Jet Zero Council focused
ongreenhouse gas removal technology,
and BAshowcased its nature-based
carbon removal projects
Left: Mark Harper, Secretary of State
for Transport, UK Government
Right: Jonathon Counsell, Group Head
of Sustainability, IAG
Spain – Alianza para la Sostenibilidad
del Transporte Aéreo en España
(Spanish Alliance for Sustainable Air
Transport)
The Spanish Alliance for Sustainable
AirTransport (AST) was launched in
April 2023. The AST is a joint initiative
comprising the air transport industry,
academia, and NGOs to promote the
development of sustainable aviation
inSpain, favouring the implementation
ofnew technologies and innovative
processes that make the long-term
sustainability of the sector possible,
andboost pathways towards
decarbonisation. Iberia played a key role
in creating the AST, and both the Iberia
and Vueling CEOs are members.
Key engagement forums in the UK, Spain and Ireland
Ireland
In 2023, the Irish Government
announced plans to establish
aGovernment-Industry SAF forum
toinform and guide its work onSAF.
IAG welcomed this announcement and
Aer Lingus is continuing toengage at
European level, andwiththe Irish
Government onpolicy support to
incentivise SAFproduction in Ireland.
Sustainability continued
A. Planet
24

A.2.1. Waste
Relevant standards: GRI 306-1/2/3
(2020).
Overview
IAG has one of the most comprehensive
waste reduction plans in the airline
industry. Our priorities include reducing
food waste, and eliminating the use of
single-use plastics, in addition to
increasing recycling across our
operations.
On-board services are the main source
of waste. Key waste outputs include
plastic packaging, leftover food waste,
A.2. Planet – wider issues
drinks cans and cabin items such as
wrappers. Key inputs included on-board
meals and amenity kits supplied to
passengers.
In 2023, IAG operations generated:
• 52,699 tonnes overall (52,655 tonnes
in 2022); comprised of
• 51,749 tonnes non-hazardous waste;
and
• 950 tonnes hazardous waste.
We recovered or recycled
7,650tonnes(19%).
Waste is typically offloaded and
processed at airports by third-party
caterers, with some materials recovered
on-site and other materials incinerated
or sent to landfill. The majority of cabin
and catering waste is processed at IAG’s
hub airports – Barcelona, Dublin, London
and Madrid – although the Group fliesto
over 200 airports worldwide.
Below is the Group’s most
comprehensive waste disclosure to date.
Waste trends are stabilising with the
return to normal operations following
the COVID-19 pandemic and IAG
remains committed towards delivering
our 2025 goals.
Metric Unit 2019 base 2025 target 2023 2022 2021 2020 vly
On-board waste per passenger Kg/pax 0.33 0.26 (-20%) 0.32 0.41 0.47 0.75 (22%)
Office waste per full-time employee Kg/FTE 95.7 47.8 (-50%) 81.8 83.0 103.1 124.5 (1%)
Maintenance waste per unit of activity Kg/person-hr 0.63 0.47 (-25%) 0.11 0.12* 0.28* 0.38* (8%)
Cargo waste per unit of cargo carried Kg/tonne cargo 1.55 1.16 (-25%) 1.54 1.59 1.43 1.59 (3%)
On-board waste at hubs recycled/recovered % 24% 40% 20% 24% 26% 31% (4pts)
Office waste recycled/recovered % 35% 60% 26% 26% 13% 16% 0pts
Maintenance waste recycled/recovered % 50% 70% 72% 60% 45% 35% 12pts
Cargo waste recycled/recovered % 63% 80% 77% 59% 61% 55% 18pts
Note: * means restated using the latest data and assumptions.
Commentary on key metrics
Key metrics Description Commentary
Overall waste Includes waste from all streams – on-board, office, cargo and
maintenance waste – and an extrapolation of waste processed
at overseas airports, where waste destinations are not always
reported by third parties.
Waste volumes have increased less than 1% in
2023. This is despite activity levels returning
topre-pandemic levels. Please refer to examples of
waste reduction initiatives across the Group for
more details.
Waste
recycling and
recovery
Includes re-use, downcycling, upcycling, composting and
anaerobic digestion. Regulations, including International
Catering Waste (ICW) regulations, limit the amount which
canbe recycled.
Overall recycling/recovery rates are 19%. Recycling
of maintenance and cargo waste has increased
significantly owing to initiatives implemented in
this section of the report. Onboard recycling has
fallen year-on-year as operations recover to
pre-pandemic levels. Office waste has not
increased year-on-year, but initiatives launched in
2023, such as new recycling bins at Waterside, are
expected to deliver an increase in office waste
recycling rates in 2024.
Single-use
plastic (SUP)
Items made wholly or partly of plastic and are typically
intended to be used just once or for a short period of time
before they are thrown away. This aligns to the EU definition.
160 tonnes of SUP were reduced from initiatives
such as using birchwood cutlery and replacing
packaging on blankets. The IAG GBS Procurement
team is evaluating alternatives to plastic as part
ofprocurement processes.
Waste/pax at
hubs
On-board catering waste generated per passenger, including
volumes later recycled and recovered.
Passenger numbers are based on those inbound and outbound
passengers who have their waste processed at hub airports:
Barcelona, Dublin, London Heathrow and Gatwick, and Madrid.
Waste generation ratios per passenger have
improved to pre-pandemic levels, and we are
committed to meet our 2025 target (a 20%
reduction compared to 2019 levels).
Detailed descriptions of all waste metrics are available in the Consolidated Statement of non-Financial Information.
Reducing waste across our operations
IAG launched a ‘5 by 2025’ plan in 2021 that covers five waste streams and five business units, using 2019 figures as the baseline
forour targets. The plan includes waste generation and recycling targets across on-board, office, cargo and maintenance waste
anda zero-based approach to single-use plastic (SUP). IAG is committed to reducing, reusing and recycling waste and dealing with
any hazardous waste in line with relevant national and international regulations.
25

Our action on reducing waste is increasing
Year 2016 2021 2022 2023 2025
Targets First Group-wide
waste targets
launched
New initiatives to
recycle more
on-board waste
Delivery of ‘5 by
2025’ waste targets
Action Iberia joins the EU
LIFE Zero Cabin
Waste project
EU SUP ban comes
into force
Aer Lingus worked
with the Irish
Department of
Climate, Action &
Environment and
Department of
Agriculture to make
it possible to recycle
and segregate
recycling on-board
• IAG launches
working group
dedicated towards
advancing waste
strategy;
• Aer Lingus
becomes the first
airline to segregate
and recycle
on-board waste
arriving on short-
haul flights into
Ireland; and
• Vueling eliminates
single-use plastics
in on-board items
and products
Examples of waste reduction initiatives across the Group:
Operating
company 2023 examples
Aer Lingus Aer Lingus becomes the first airline to segregate and recycle on-board waste arriving on short-haul flights into
Ireland.
British Airways British Airways offers a pre-ordering service for products from the on-board SpeedBird Cafe, to give passengers
the choice of buying fresh and ambient products before departure. These services remove food waste from
unpurchased short-haul economy cabin meals while maintaining customer choice. British Airways has a target
tohalve food waste volumes between 2019 and 2025.
British Airways becomes the first airline to be certified to recycle into New York as part of the IATA Transatlantic
trial. Regulated garbage restrictions in the US dictate that anything that has touched food waste onan international
flight has to be disposed.
IAG Cargo Colleagues from IAG Cargo’s graduate programme have helped develop and launch re-usable cups for any
beverages purchased from our canteen at London Heathrow in September 2023. This has reduced single-use
plastic cups across the hub by 41%.
The graduate programme has also developed a prototype of a new luggage tag made from waste aluminium
pallets, which will be made available for sale to customers. IAG Cargo is also exploring how this may be achieved
using other materials that are difficult to recycle or re-use.
IAG GBS The office at Waterside has launched new bins across all floorplates, divided into either five or seven sections
toallow for multiple waste streams to be collected and disposed of easily. The trial aims to improve waste
segregation and increase recycling levels.
Iberia Iberia offers a Buy-Before-You-Fly service on short-haul flights and runs the Zero Cabin Waste project which aims
to recycle on-board generated waste. Iberia segregated glass on-board for the first time in 2023.
Vueling Vueling replaced all on-board cabin trolleys in 2022 with lighter trolleys that allow the segregation of waste
on-board. Thishelps ensure waste can be processed more easily, resulting in a higher share of waste recycled and
a lower environmental impact. The lower weight of the trolleys also helps reduce CO
2
emissions from aircraft
operations, by up to 400tCO
2
e annually.
Sustainability continued
A. Planet
26

A.2.2. Noise and air quality
Relevant standards: GRI 305-7.
IAG has delivered a 14% reduction in noise per take-off and landing cycle (LTO) versus 2019, driven by fleet renewal. Noise per
take-off has improved by 3% from 2022 levels owing to the use of newer, quieter aircraft and changes in the mix of short-haul and
long-haul operations following the COVID-19 pandemic. IAG remains committed to reducing the impact of aircraft noise and air
pollution on local communities near airports and supports innovation asameans of delivering this. Noise and air quality performance
are monitored using national databases and global aircraft noisestandards.
Group airlines continue operational practices to minimise noise impacts, such as the use of continuous descents. They engage with
stakeholders such as community groups, regulators and industry partners to understand their concerns and participate in research
and operational trials to identify and refine solutions.
Noise reduction targets
IAG is updating noise reduction targets as flying levels return to pre-pandemic levels. Iberia is continuously improving the KPIs
related tonoise levels, as the new fleet we are introducing has better noise certification levels than the previous aircraft.
Detailed descriptions on all noise metrics are available in the IAG statement of non-financial information.
Metric Unit
1
vly v2019 2023 2022 2021 2020 2019
Noise per cycle QC per LTO (2%) (14%) 0.86 0.88 0.88 0.96 1.00
NOx per cycle kg per LTO <1% (4%) 8.89 8.83 9.22 9.84 9.23
ICAO Chapter 14 % at standard 3pts 9pts 62% 59% 56% 58% 53%
CAEP Chapter 8 % at standard 6pts 12pts 47% 41% 39% 40% 35%
1 % at standard is based on the fleet position at the end of 2023, including parked aircraft and excluding leased aircraft. Metrics per LTO are based on
aircraft operational during the year. Details of Chapter 6-compliant aircraft are available in the IAG statement of non-financial information.
Related risk: Operational noise restriction and charges
Risk and/or opportunity description and potential impact Mitigating actions
Airport operators and regulators apply operational noise
restrictions and charging regimes which may introduce additional
costs or restrict airlines’ ability to operate, e.g. restrictions on
night flights.
• Investing in new, quieter aircraft as part of fleet modernisation
• Continually improving operational practices including
continuous descents, slightly steeper approaches, low-power/
low-drag approaches and optimised departures
• Internal governance and training and external advocacy
inIreland, Spain and the UK to manage noise challenges
A.2.3. Environmental management
Relevant standards: GRI 103-2
Overview
IAG is committed to improving our environmental performance and complying with recognised standards in our sector for
environmental management on material issues identified in this report. Key priorities include working towards theIATA
Environmental Assessment (IEnvA), meeting ISO 14001 requirements and improving the EcoVadis score of Group airlines
participating in the questionnaire (British Airways and Iberia).
Additionally, IAG GBS partnered with EcoVadis in 2022 to assess suppliers using EcoVadis scorecards, which consist of a holistic
view of environmental, social and governance (ESG) issues. This gives IAG and its suppliers a baseline for improvements across
ESGissues, and suppliers can share this with customers and other stakeholders to support sustainability across the industry.
27

Group airlines 2023 progress
In 2023, all Group airlines were fully certified under the IEnvA standard which is equivalent to ISO 14001 inall our flight operations
and corporate buildings, complying with the core scope defined by IATA.
Additionally, British Airways and Iberia have extended the certification to their maintenance activities at hub airports and, in the case
of Iberia, also to its handling services in Madrid Airport. Iberia Airport Services holds an ISO 14001 in all the airports at which it
operates, with the aim of guaranteeing that an environmentally responsible service is provided to its customers.
In line with our commitment to supporting a more responsible supply chain, British Airways and Iberia respond annually to the
EcoVadis questionnaire. EcoVadis is a market-leading provider of business ESG ratings. The response to this questionnaire is
supported by the Group’s policies and practices, such as supplier engagement policies administered by IAG GBS, which also allows
us to identify points of improvement to annually improve the score of all Group airlines.
As part of our supply chain management objectives and our partnership with EcoVadis, IAG GBS has screened 90% of IAG’s spend
using EcoVadis scorecards, which means screening more than 550 suppliers.
Airline EcoVadis 2023 score
British Airways Bronze
Iberia Silver
IAG third-party ESG assessments and awards
The Group also continues to provide evidence to support third-party ESG disclosures and rating assessment frameworks.
In 2023, IAG has been awarded an A- grade by the Carbon Disclosure Project (CDP) for its climate change disclosure, which
assessed more than 21,000 companies globally on climate action. This is the fourth year IAG has achieved a ‘leadership’ rating of A-
or higher, the longest consecutive leadership rating of any airline, and places the Group in the top 25% of respondents worldwide.
IAG was also the highest ranked aviation group in the global Transition Pathway Initiative (TPI) in 2022, which assesses 600
companies across 47 countries on their readiness for the low-carbon transition. IAG is in the top 10% of airlines assessed by
Sustainalytics, which gives ESG risk ratings to around 15,000 companies worldwide based on public disclosures.
IAG was also awarded 2024 Eco-Airline of the year by Air Transport World for industry leadership and a best-in-class SAF
programme, while Aer Lingus received the Aviation Sustainability and Environment award at the Irish Aviation 2023 Awards.
Reporting requirement Current rating Comments
TPI Highest-ranked airline in 2022 TPI climate ratings
(Score: 17/18)
TPI assess around 600 companies on their
readiness for a low carbon transition
CDP A- rating in 2023 (top 25%) Leadership rating achieved for fourth consecutive
year, longest running of any airline
Sustainalytics Top 10% of airlines in 2022 Sustainalytics provide ESG ratings to around
15,000 companies
For IAG’s engagement with the Transition Pathway Initiative, please refer to section A.1.2. of this report. For more information
onourengagement with carbon disclosure providers, please refer to the ‘Principles of sustainability governance’ section.
Working with pathway initiatives
IAG supports the 1.5°C ambition of the Paris Agreement and continues to review evidence on aviation pathways which support this.
Where possible, IAG will work with relevant stakeholders, including the Science-Based Targets initiative (SBTi) and Transition
Pathway Initiative (TPI), to build an understanding of aviation industry pathways to net zero, how these contribute to national
andglobal goals, and how companies and policymakers can drive investment into a low carbon transition. IAG is supporting work
led bythe Mission Possible Partnership (MPP) and the SBTI to update the 1.5
o
C guidance for the aviation sector.
Left: Aer Lingus received the
Aviation Sustainability and
Environment award at the Irish
Aviation 2023 Awards. The
award was received by Rebecca
Hill, Head of Sustainability,
Aer Lingus.
Right: In 2023, Group airlines
were fully certified under the
IEnvA standard in all our flight
operations and corporate
buildings
Sustainability continued
A. Planet
28

B.1. Overview
IAG's structure is unique. Together we
work towards our common purpose of
connecting people, businesses and
countries. The IAG model empowers
each operating company and platform
business to deliver for its customers and
people – with each being responsible for
managing recruitment, pay and
conditions for their colleagues, as well as
careers and development – while
centrally we look at opportunities for
synergies across the Group.
Each operating company and platform
business has its own culture and values
which support its unique brand,
business, customer and employee
propositions. At IAG, we hold
commitment, pragmatism, execution,
ambition, resilience, challenge and
innovation, responsibility, people focus
and team players as key values that
enable us to fulfil our purpose. These are
woven throughout our ways of working,
people processes and our people
strategies.
Colleagues have consistently
demonstrated these values in
responding to the various challenges
and opportunities they have faced
across the year. We've made substantial
headway in rebuilding capacity,
enhancing resilience and flexibility, and
making transformative changes in our
business, whilst navigating operational
challenges, particularly in British Airways
and Aer Lingus.
Across the Group, our focus on culture
and values is essential to our
transformation and the execution of our
strategy. Our operating companies are
working to constantly evolve their
cultures to enable their businesses to be
more competitive and achieve our
transformation agenda and to provide a
great working environment in which all
colleagues can thrive. We measure
progress on our culture through a
six-monthly Organisational Health Index
(OHI) survey sent to all employees and
through other employee listening
channels (see the Stakeholder
Engagement section for details). Insights
from these channels feed into our
operating companies’ priorities for
improving and progressing our people
policies, ways of working and shaping
our people strategies.
B. People
In 2022, our primary focus was to build
back capacity to support our business
and operations. In 2023, we have been
able to focus on a broader range of
people initiatives including:
• investing in the skills of our workforce
and commitment to professional
development and careers – including
our award-winning apprentice
programmes and our pilot and
leadership programmes;
• building the culture within each of our
operating companies creates a
positive colleague experience and
drives customer-centricity and
operational performance. Twice-yearly
organisational health surveys enable
tracking of progress and help focus
people plans;
• continuing to make progress towards
our ambition of 40% senior leadership
roles held by women by 2025. At year
end 2023 we have 36% of senior roles
held by women, a two-point increase
in 2023 versus 2022 and an overall
increase of six points since 2020;
• building on initiatives already carried
out in some of the operating
companies, in 2023, we launched a
voluntary, anonymous and confidential
online survey to our senior leaders
across the Group to gain a deeper
understanding of the composition and
diversity of IAG’s senior leadership,
going beyond gender to include a
broad range of factors regarding
identity. The survey results will be
shared with senior leaders to inform
IAG’s people strategies and provide a
baseline of the diversity of IAG’s
senior leaders, enabling us to track
progress over time and support
discussions around equity, diversity
and inclusion. An output of the survey
feeds into the UK Parker Review,
which focuses on ethnic diversity of
Boards and senior leadership teams.
6% of our UK senior leaders self-
disclosed as ethnically diverse and our
senior leaders globally represent over
20 nationalities. To ensure continued
focus on increasing ethnic
representation, we have introduced an
ethnic diversity ambition of10% for
the Group’s UK senior leadership
population by the end of 2027;
• continued focus on creating an inclusive
and diverse culture and organisation,
encompassing the promotion of equity,
diversity andinclusion, and upholding
Group-wide policies designed to
eradicate discrimination;
• supporting the wellbeing of our
colleagues through the provision
ofarange of health, financial, and
lifestyle benefits. Each operating
company is committed to creating
apositive work environment
andtoactively contributing to and
supporting the overall wellbeing of
everycolleague;
• supporting colleagues through the
broader transformation of the
business including digitalisation,
artificial intelligence, modernisation
ofour fleet, investments in customer
and products; and
• operating companies have actively
engaged with trade unions to secure
balanced agreements, ensuring fair
and competitive remuneration.
Thesenegotiated agreements
providea critical foundation to
support investment and foster growth.
Sustainability continued
29

B.2. Key metrics and progress
Relevant standards: GRI 2-8, 401-1, 405-1
Headcount
71,794
+9% vly
at 31 December 2023
New hires
13,561
-22% vly
at 31 December 2023
Overall attrition
9.50%
of which 7.40% were voluntary leavers
Full year 2023
Airport Operations
Cabin Crew
Corporate
Maintenance, Engineering & Logistics
Pilot
23%
33%
22%
10%
12%
2023
2022
7,868
8,223
6,782
6,972
14,025
15,811
22,278
24,004
15,091
16,784
Airport Operations
Cabin Crew
Corporate
Maintenance, Engineering
& Logistics
Pilot
Workforce composition
North America
950
3%
Europe
67,748
8%
Latin America
and Caribbean
324
1%
Africa, Middle East
and South East Asia
2,527
24%
Asia Pacific
245
-9%
United
Kingdom
Ireland
Europe
(other)
Spain
37,500 (+11%)
23,743 (+7%)
5,159 (+10%)
1,346 (-21%)
Headcount by geographical location
at 31 December 2023
Workforce composition
Headcount by professional category at 31 December 2023 vly
European countries
Sustainability continued
B. People
30

B.3. Equity, Diversity
andInclusion
Relevant standards: GRI 405-1
At IAG we are proud of the diversity of
the workforce across our Group
companies and the richness of
backgrounds, experiences, cultures and
ideas that makes our businesses thrive.
Our aim is that all colleagues feel their
unique difference is recognised and
valued. IAG continues to bring positive
change and progress towards our equity,
diversity, and inclusion (EDI) ambition to
create a diverse and inclusive culture
representative of the communities we
live and work in and the customers we
serve.We also believe that a diverse
workforce performs better and is more
resilient, innovative and productive.
Progress on gender diversity
With regards to gender, our Board
comprises 45% women, the IAG
Management Committee 25% women
and we have over 44% of women across
our workforce. In 2022, we set a Group-
wide ambition to have 40% of senior
leadership roles held by women by 2025.
We have seen a significant increase in
gender diversity in senior leadership to
36% in 2023, a two-point increase since
2022 and six points since 2020 and are
on track to achieve our 40% ambition.
Going beyond gender
Our Group-wide plans go beyond
gender, and we are implementing
arange of initiatives to support our
diversity and inclusion ambition, whilst
recognising the cultural sensitivities and
legal contexts we operate in globally,
and the need to comply with evolving
reporting requirements.
In 2023, we partnered with an
independent UK-based talent and
diversityconsultancy, Green Park, to
gain a deeper understanding of the
composition and diversity of our senior
leaders, going beyond gender to include
a broad range of factors regarding
identity. A voluntary, anonymous
andconfidentialonline survey was sent
to senior leaders across the Group.
We are delighted that 88% of our senior
leaders globally responded to the survey
(193 out of 219
1
leaders invited) with a
96% response rate in the UK (91 out of
95 leaders invited). While some of the
operating companies were already
capturing broader demographic data
shared by colleagues, this is the first
time we have surveyed our senior
leaders across the Group with questions
tailored to local legal and cultural
contexts.
The survey provides a baseline to better
understand the diversity of our senior
leadership population,enables us to
track progress over time and to continue
and broaden our dialogue with our
senior leaders around equity, diversity
and inclusion.
Females 82
Males 143
64%
Senior
Leadership
36%
Gender diversity of senior
leadership
at 31 December 2023
36%
6 points increase since 2020
We are on track to achieve our
ambition of 40% of senior leadership
roles held by women by 2025.
1 Number of senior leaders at the time of
sending out the survey
31

Focusing on ethnicity and nationality
One of the areas we focused on in the 2023
survey was ethnicity. 6% of our senior
leaders based in the UK self-disclosed as
ethnically diverse. Two leaders responded
Prefer not to Say and four did not consent
to their data being processed.
We recognise that we have progress to
make and are introducing an ambition for
10% of the Group’s UK senior leadership
population to identify as ethnically diverse
by the end of 2027. This has the support
of both the Board and Management
Committee.We have decided to focus our
ethnicity ambition on the UK as ethnicity
and race are well-defined characteristics
aligned with census data.We support the
recommendations of the Parker Review in
the UK both in terms of reporting the ethnic
diversity of our Board and senior leaders,
and in setting an ambition for 2027.
Given IAG’s global focus we see great
value in having diverse ethnic, national
and cultural backgrounds represented in
the workforce: across our 71,794
colleagues,wehave over 150
nationalities. Thesurvey highlighted that
our senior leaders globallyrepresent over
20nationalities. Inthe UK, 34% of senior
leaders self-disclosed as anationality
other than British.
The survey results are being shared with
our senior leaders and used to inform our
people strategies. We remain committed
to creating a diverse and inclusive
culture. We will continue to uphold
Group-wide policies designed to
eradicate discrimination and to focus on
open and transparent people processes,
mindful choices of search partners,
diverse recruitment shortlists and more
rigorous definitions of critical role
requirements, focusing on capabilities
rather than experience.
Right: British Airways’
celebration of Black
History Month
Left: British Airways’
Diwali celebrations
Our data relies on senior leaders
self-disclosing their diversity status.
Individuals who have chosen not to
report their ethnicity are not included in
the calculation as minority ethnic
leaders.
We use the following methodology
tocalculate:
% of ethnically diverse
seniorleadership in UK
=
(Total number of UK leaders who
self-identify as minority ethnic)
(Total number of senior leaders in UK)
Aligned with the UK Parker Review
guidance:
• a leader is identifiedas 'minority
ethnic' ifthey self-disclose as one of
the following groups: Asian, Black,
Mixed/Multiple, Other (with
theoption to describe the ethnicity)
or Prefer to Self-define (where the
ethnicity maps to an ethnic minority
category); and
• a leader is not included as 'minority
ethnic' if they identify asWhite,
Prefer not to Say, Do not Consent to
data being processed, Prefer to
Self-define (where the ethnicity does
not map to an ethnic minority
category) or did not reply to the
survey.
Three different surveys were designed
for the UK, Ireland and Spain – aligned
to each country’s legal and cultural
context – using local census questions
and classifications. In some countries
we did not include the ethnicity
question due to the legal and cultural
context. Where collected, the ethnicity
resultsprovided to IAG have been
aggregated and mapped to the UK
ONS classification categories.
Data is held by Green Park and only
shared with IAG and its companies for
reporting at an aggregate level with
minimum thresholds to safeguard
anonymity.
We define senior leaders as IAG
grades 0, 1 and 2 or equivalent across
the Group, including Senior Executives
(direct reports to IAG's CEO).
Ethnicity reporting methodology
Sustainability continued
B. People
32

Collaborating on EDI across the
Group and supporting progress
across our industry
The IAG Diversity Panel, created in 2021,
sees representatives across all operating
companies sharing best practice and
leading on the co-design and
implementation of new EDI initiatives
that guide us towards our ambition.
We continue to partner with Women in
Hospitality, Travel and Leisure (WiHTL).
This year several operating companies
participated in WiHTL’s EDI maturity
assessment and benchmarking exercise,
in partnership with the Centre for
Diversity Policy Research and Practice at
Oxford Brookes Business School. Both
at Group and operating company level
we continue to collaborate with industry
peers and were recently awarded the
WiHTL ‘Most Engaged Member’ at its
2023 Inclusion Summit.
We actively partner with International Air
Transport Association (IATA) and are
committed to advancing gender diversity
as part of IATA’s 25 by 2025 strategy (a
global initiative to enhance EDI and
gender balance in the aviation sector).
Each airline is looking at increasing the
diversity of its pilot populations through
talent attraction and recruitment
practices and through school
engagement and outreach programmes.
British Airways, Aer Lingus and Iberia
have launched fully or semi-funded pilot
cadet programmes.
Equity, Diversity and Inclusion
examples
Aer Lingus has made strides in gender
diversity within the Future Pilot
Programme, with the first successful
cohort comprising approximately 27%
women. Aer Lingus currently has 11% of
pilot roles filled by women, the third-
highest gender representation of pilots
of all airlines globally (Source:
International Society of Women Airline
Pilots 2021).
British Airways launched the Speedbird
Pilot Academy, funding 70 spaces aimed
at removing financial barriers to entry
for pilot roles, while also introducing the
'Be an Original' inclusion and diversity
learning programme for all colleagues.
British Airways also launched a
reversementoring programme pairing
80 senior managers with colleagues
from under-represented ethnicities to
promoteawareness and improve
inclusion. Additionally, British Airways
focused onincreasingrepresentation
through internships, apprenticeship
programmes and work experience
placements – opening up different entry
routes to a higher proportion of ethnic
minority colleagues and those from
lower socio-economic backgrounds.
Asit participates in Europe's largest event
for black entrepreneurs, British Airways
actively encourages and engages
incultural activities that are important
tocolleagues across the business.
IAG Cargo introduced a new training
hub with a flexible bank holiday policy
topromote inclusivity. Additionally, it has
revamped its prayer room and nursing
room to be fully accessible. IAG Cargo
took second place in The Equity Index
2022/23 produced by Lead 5050, a UK
cross-industry accreditation body, that
ranks firms using official data on average
salaries, bonuses, and pay at every level.
The business also supported the
'everywoman in Transport and Logistics
Awards' that promotes and inspires
women within the industry.
IAG GBS is actively fostering an inclusive
workplace through the initiatives of its
Inclusion Network/Community Groups,
including the LGBTQ+ Network and
Working Parents and Carers Network.
Astrategic partnership with MyGWork,
the largest professional speciality
platform for the LGBTQ+ community,
offers a range of collaborative efforts
such as job postings, speaker events,
Pride celebrations and access to a
substantial talent community.
IAG Loyalty engaged a representative
group of colleagues focused on driving
an inclusion and belonging agenda. The
group designed and led a calendar of
EDI events and experiences based on
colleague listening and survey data.
There have been high levels of
engagement across all topics including
Pride, International Women's Day,
Menopause Day, Baby Loss Awareness,
Ramadan and other events designed by
colleagues, for colleagues.
IAG Tech proudly supports women
inthe tech sector, sponsoring the
‘Outstanding Women of the Year’
awardat the Women in Tech event and
maintaining job postings on platforms
such as the Diversity in Tech website.
Vueling and Iberia have refreshed their
equality plans this year. Noteworthy
progress at Vueling includes an
increased percentage of women
inmanagement positions. Iberia’s
strategic focus through a supported
network ofover 200 colleague diversity
ambassadors who help raise awareness,
identify organisational barriers and
whoare consulted on company
processes. This is supplemented with
mandatory training for the entire
company.
Co-parenting responsibilities
Relevant standards: GRI 401-3
The Group's operating companies
prioritise work-life balance, especially
inthe context of co-parenting
responsibilities. They have a range of
policies covering job-sharing, maternity,
adoption, paternity and shared parental
leave to support employees managing
co-parenting commitments. Online
platforms facilitate a collaborative
community for working parents and
carers, enabling the exchange of ideas
and mutual support, while also providing
access to digital resources offering
valuable information for maintaining
ahealthy work-life balance.
IAG Loyalty, as one of its focus areas,
looked at parental leave with an equity
lens, emphasising support for both
parents rather than just the primary
carer or birthing parent. Thisinitiative
applies in both the UK andSpain.
British Airways' newly
established Colleague
Accessibility Network
Group
33

Universal accessibility for people
with disabilities
Relevant standards: GRI 405-1
The Group adheres to all pertinent
legislation, guaranteeing universal access
for both employees and customers with
disabilities across our operating
companies. Our operating companies
strictly adhere to relevant accessibility
laws in our facilities and overall operations.
Each of our operating airlines is
committed to providing a seamless
customer experience, especially for
those with disabilities. Collaborating
withexternal organisations, including
theBusiness Disability Forum in the UK,
our airlines seek guidance and support
to enhance their efforts and strategies.
British Airways has developed a
comprehensive guide to provide support
for customers with disabilities, ensuring
their needs are addressed with clarity
and thoughtfulness. Furthermore, a
proactive approach to inclusivity is
evident in the neurodiversity training
offered to managers at all levels.
A new Colleague Accessibility Network
Group at British Airways has been
established, with a senior-level sponsor
to steer its initiatives.
B.4. Health, safety and wellbeing
Overview
Relevant standards: GRI 403-4, 403-6
At IAG, we are committed to the health,
safety and wellbeing of employees,
customers, and stakeholders, whether
inthe sky or on the ground. Our focus
encompasses preventing accidents and
diseases, controlling existing risks, and
championing continual improvement in
health and safety conditions. The IAG
SECR Committee plays a pivotal role in
overseeing operational safety and
corporate responsibility.
We operate in compliance with laws,
regulations, company policies and
industry standards, and maintain arobust
suite of health and safety management
systems across our operating companies.
Driving this commitment are governance
processes led by committees within each
operatingcompany.
Operating companies have made
substantial investments in initiatives that
address various aspects of employee
wellbeing, taking a holistic approach that
integrates physical, social, and financial
elements, alongside mental wellbeing.
Accident and severity rates are lower
compared to 2019, with a Lost Time
Injury (LTI) frequency rate of 3.7
instances per 200,000 hours worked.
Key initiatives
Aer Lingus ran a Health and Wellbeing
Week across three locations in Ireland,
featuring 21 different events. The week
included initiatives such as flu
vaccination vouchers for all staff,
comprehensive health checks,
reflexology treatment clinics, in-chair
massage clinics, defibrillator training and
webinars for family carers with guest
speakers. Additionally, Aer Lingus
provided an opportunity for colleagues
to try the ‘’smoothie bike’’, a unique and
engaging way to have fun, keep fit and
promote sustainable energy and healthy
living. The airline actively promotes a
comprehensive wellbeing portal
accessible to all staff. This resource
encompasses content onvarious
wellbeing topics, including mental and
physical health, monthly themed
informational webinars, a digital gym
offering online classes, an exercise
library and nutrition resources.
Regarding safety, Aer Lingus has a
safety engagement programme which
empowers managers and supervisors to
reduce risk of injuries by discussing safe
and unsafe actions.
Aer Lingus and British Airways have
revised their Health and Safety
e-learning induction training for new
staff, in addition toholding regular
communication throughHealth and
Safety action groups, promoting safe
behaviours, handling andtraining.
British Airways provides a leading
peersupport programme for pilots,
tiedto professional psychology support.
The airline is committed to ISO 45001
standards, enhancing operating
processes to prevent work-related injury
and illness. In addition, a dedicated
in-house occupational health service
hasbeen established, providing CAA
regulatory medical examinations tailored
for pilots and cabin crew. This service
extends for all colleagues in specific
trades, all in strict accordance with
UKhealth and safety legislation. British
Airways has a network of 150 dedicated
wellbeing champions collaborating
closely with health services to support
new and existing initiatives. British
Airways provides all colleagues globally
with complimentary access to ‘Unmind’
– an online wellness platform developed
by experts in neuroscience, cognitive
behavioural therapy, mindfulness and
positive psychology. Additionally, British
Airways has signed the ‘working with
cancer’ pledge as well as collaborating
with Endometriosis UK, creating a
supportive workplace for colleagues
living or impacted by these conditions.
Iberia’s commitment to employee
wellbeing is an integral part of the
’Eligecuidarte’ (‘Choose to take care
ofyourself’) programme within
Occupational Prevention Management. In
2023, Iberia’s efforts encompassed a
range ofinitiatives, including
physiotherapy services, heightened
awareness of prostate cancer, annual flu
vaccinations and the promotion of
physical fitness through the 'Use the
Stairs' campaign. Iberia has well-
established health and safety committees
in each of its relevant work centres.
IAG Cargo and British Airways
introduced new menopause guidelines
supported by a combination of online
webinars and roundtable discussions.
IAG Cargo established a cohort of circa
100 Mental Health First Aiders
throughout the organisation and has
implemented fitness classes and a
comprehensive wellbeing guide to
promote a holistic approach to health.
IAG GBS employees access valuable tips
on managing their wellbeing through
medical health webinars, resilience
training, yoga, pilates and online courses.
Additionally, the introduction of the
Headspace app for all employees and
their friends and family has seen
aremarkable 90% participation rate.
IAG Loyalty ensures colleagues have
easy access to wellbeing resources,
acentral hub page allowing seamless
navigation to content at any time.
Inaddition, it orchestrated engaging
events and curated unique content
during Blue Monday and Mental Health
Awareness week, prioritising mental,
physical and financial wellbeing, finding
every opportunity to combine fitness
with community activities.
IAG Tech has implemented Mental
Health employee first aiders who play
acrucial role in offering support to
colleagues during challenging times.
Industry-leading standards are being
recognised across the Group and, in
2023, Vueling received the Premio
Empresa Xcellens award which
recognises all the work Vueling has done
to promote a genuinely preventive
culture and improving employees’
quality of life. Vueling also holds
quarterly meetings with its health and
safety committee, composed of Vueling
management and trade union appointed
safety representatives.
Sustainability continued
B. People
34

B.5. Human rights and modern
slavery
IAG had no known cases of human
rights violations across the Group during
2023, the same as in 2022. IAG is taking
steps to prevent incidents of modern
slavery within the Group and across its
supply chains.
The IAG Group Slavery and Human
Trafficking Statement outlines these
actions and is available on the IAG
website. This statement is made under
section 54, part 5 of the 2015 UK Modern
Slavery Act (MSA). In terms of policies
associated with human rights, IAG asks
suppliers to comply with the Supplier
Code of Conduct, which expressly
prohibits the use of child labour and any
form of slave, bonded, forced or
involuntary prison labour, human
trafficking or exploitation. Modern
Related risk: Human rights
Risk description and potential impact Mitigating actions
Not preventing potential incidents of human trafficking via IAG
routes, damaging efforts to protect human rights and associated
legal, social and reputational impacts.
Potential human rights or modern slavery violations in the supply
chain leading to fines, compliance issues, social impact, business
interruption or reputational damage.
• Updated Group Slavery and Human Trafficking Statement
• Training for staff to recognise signs of potential human
trafficking and guidance and processes in place to report this
• See C.4. Supply chain governance
IAG is working towards the creation of a formal Human Rights policy, alongside the existing Code of Conduct and Supplier Code of
Conduct to consolidate its activities in this area.
slavery clauses feature in all new
supplier contracts as well as contract
renewals, which require full compliance
with all applicable anti-slavery and
human trafficking laws, statutes,
regulations and codes.
IAG remains committed to taking swift
and robust action if any evidence
relating to slavery or human trafficking
in our business supply chain is identified.
IAG is taking steps to prevent human
trafficking. Human trafficking is of
particular concern to IAG and to the
wider aviation industry, as the Group
transports millions of passengers every
year and has tens of thousands of
suppliers across the world. Operating
airlines work closely with governments
and the airports in which they operate to
ensure that any suspected trafficking on
our flights is identified, reported and
dealt with appropriately. IAG also
supports the 2018 IATA resolution
denouncing human trafficking and
reaffirming a commitment to tackle
thisissue and the ICAO Guidelines
forReporting Trafficking in Persons
byFlight and Cabin Crew – in addition
toactively contributing to the
ICAOAdHoc Working Group on
CombatingTrafficking in Supply
Chain(AHWG-TSP), an international,
jointindustry-regulatory group
providing advice to ICAO assisting in
thedevelopment of guidance material
on combating trafficking in persons
inanair operator’s supply chain.
Operating airlines also train staff to
recognise and respond to the signs of
potential human trafficking situations
and provide procedures for reporting
where any cases are suspected.
B.6. Community engagement and charitable support
Relevant standards: GRI 102-13, 201-1
In 2023, IAG raised over €7.4 million for charitable causes across the Group. Of this, 36 per cent came from customer contributions,
39 per cent from Company donations, 17 per cent from employee contributions, and 8 per cent from in-kind donations.
Metric GRI Standard Unit vly 2023 2022 2021 2020 2019
Total raised € million 14% 7.4 6.5 2.7 4.6 5.7
Group operating companies have partnerships with a range of organisations including:
Disasters Emergency Committee (UK), Flying Start (UK), Save the Children (Spain), Lovaas Foundation (Spain), Dublin Pride
(Ireland), Special Olympics (Ireland), Business vs Smog (Poland), Noble Gift (Poland), UNICEF (global)
35

C. Principles of sustainability governance
C.1. Sustainability strategy
IAG’s vision is to be a world-leading
airline group on sustainability.
That means using its scale, influence
andtrack record to not only transform
the business but drive the system-wide
changes required to create a truly
sustainable aviation industry. IAG is
committed to delivering best practices
in sustainability programmes, processes
and impacts, while executing Group
strategy.
IAG aligns its environmental strategy
with the three overall strategic priorities
of the business described in the
Strategysection.
Material issues
IAG focuses its sustainability strategy
onaddressing material issues: those
which are most important to key
stakeholders and which have the biggest
external impacts.
To identify these issues over a three-year
timeframe and to 2030, IAG repeated a
materiality assessment in 2021 which was
facilitated by an independent third party.
External stakeholders included investors,
corporate customers, policy makers,
trade associations, fuel suppliers, airports,
and NGOs. Internal stakeholders included
IAG Board members, all IAG Management
Committee members, and operating
company sustainability representatives.
The results inform ongoing disclosures
and strategy.
In our 2021 materiality assessment,
tackling climate change was identified as
the most material issue in the long-term.
In the short-term, as the business
recovers from the COVID-19 pandemic,
profitability and customer and employee
engagement and wellbeing remain
highpriorities.
IAG does not have specific risk
provisions, targets or guarantees related
to non-material issues such as water
consumption, biodiversity, raw materials
consumption, or light pollution. More
information on water and biodiversity
isavailable in the Additional Disclosures
section of the IAG statement of non-
financial information.
IAG will seek a double materiality
assessment when it next repeats
thisanalysis in 2024.
10 Oct 2019
22 Apr 2021
1992
8 Nov 2019 4 Feb 2020
22 Sept 2021
2005
11 Sept 2020 11 Feb 2021
4 Oct 2021
2009
31 Aug 2021 4 Oct 2021
9 Oct 2021
2021
2023
2021
3 Oct 2022
Leading net zero by 2050 roadmaps and commitments
Leading 10% SAF by 2030 commitments
Airline industry firsts
IAG
commitment
(first airline
group
worldwide)
IAG (first European airline
groupto commit)
British Airways publishes
carbon footprint
IAG roadmap
launched at
Capital Markets
Day
Sustainable
Aviation
roadmap and
commitment
World Economic Forum
(Cleaner Skies for
Tomorrow Coalition)
British Airways' carbon
offset programme for
customers
oneworld
commitment
A4E roadmap
and
commitment
oneworld alliance
British Airways proposes
CORSIA as part of
Aviation Global Deal
oneworld
roadmap
IATA
commitment
UK Government
British Airways and Iberia
Sustainability Linked
Loans (SLL)
30+ airlines globally
IAG makes net-zero
Scope3 commitment
ICAO
commitment
Advanced innovation
IAG awarded CDP
A-List company for
the first time.
Sustainability
category added to
Group accelerator
programme.
Founding member
of Coalition for
Negative Emissions,
supporting carbon
removals.
Secures first aviation
sustainability-linked
loan linked to ESG
targets, via British
Airways
Invests in hydrogen
aircraft (ZeroAvia)
Offers carbon
removals to
customers
(British Airways)
British
Airways in
new carbon
removal
financing
model
Dec 2017 Sept 2019 Oct 2020 Jan 2021 2021 Nov 2022 Dec 2023
Drove/leading role Supported IAG-specific
Sustainability continued
36

1
Clear and ambitious
targets relating to IAG’s
most material issues
2023 action
2025, 2030 and 2050 carbon
targets and published transition
plan. British Airways and Iberia
have sustainability-linked loans
related to 2025 carbon
efficiency.
2
Low-carbon transition
pathway embedded
inbusiness strategy
2023 action
Sustainability aspects included
in one-year, three-year and
2030 business planning for
operating companies.
3
Management incentives
aligned to delivering
alow-carbon
transitionplan
2023 action
Over 7,500 senior executives
and managers have 10% of their
annual incentive linked to
annual carbon intensity targets.
Our
9
KPIs
1
2
9
8
3
4
7
6
5
Sustainability leadership KPIs
4
Leadership in carbon
disclosures
2023 action
A- score received in CDP
climate ratings in 2023, fourth
consecutive year of climate
leadership status.
5
Accelerating progress
inlow-carbon
technologies including
aircraft technology, SAF,
carbon offsets and
carbon removals
2023 action
Sustainability remains a focus
area within the IAG accelerator
programme Hangar 51.
6
Accelerating innovation
in low-carbon
technology
as above
2023 action
British Airways, LanzaJet and
Nova Pangaea Technologies
signed an agreement that will
accelerate Project Speedbird,
an initiative created by the
companies in 2021 to develop
cost-effective SAF for
commercial use in the UK.
7
Industry leadership
inthe innovation and
deployment of SAF
including power-to-
liquids
2023 action
As of 31 December 2023,
ourtotal investment in SAF
is$1 billion, of which 86%
isfuture commitments.
Based on an assumed jet fuel
priceof $800 per metric tonne
andcontracted margins for
SAFproduction.
8
Stepping up our social
commitments including
on diversity, employee
engagement and
sustainability as a
corevalue
2023 action
36% of senior leadership roles
held by women, a 2 percentage
point increase on 2022.
9
Industry leadership in
stakeholder engagement
and advocacy
2023 action
Leadership roles across multiple
trade associations. See A.1.7.
IAG drives progress based on nine
strategic KPIs agreed by the Board
in 2021.
37

C.2. Governance frameworks
Relevant standards: GRI 102-46/-48
Overview
IAG has robust governance in place to ensure joined-up and progressive decisions on sustainability.
This also helps to ensure that wider stakeholder engagement is consistent with material issues and environmental priorities and
goals. An annual meeting planner for the Board ensures sustainability governance processes fit within the reporting and disclosure
framework of the Group.
The Group’s unique structure means that each individual operating company has a distinct sustainability programme. These are
regularly reviewed to ensure alignment with the Group sustainability strategy and principles, which covers material issues, KPIs
andengagement plans.
Relevant forums and levels of responsibility are indicated below. Information flows between groups is covered in section C.6., Risk
Management and Principal Risk factors section, and in the Corporate Governance section.
Board/management committee Frequency of meetings Responsibility in relation to sustainability
Board At least quarterly Approval for strategy, major investments, risk management and
controls and review of progress against environment and people
plans including climate-related goals and targets
Board Safety, Environment and
Corporate Responsibility (SECR)
Committee
At least quarterly Dedicated oversight of Group sustainability programme and
alignment with strategic priorities, review of progress against
environment and people plans. Provides a link between operating
company management committees and the IAG Board
IAG Audit and Compliance
Committee
At least quarterly Ensures compliance with relevant regulation and reviews Annual
Report and Accounts and Non-Financial Information Statement
IAG Management Committee At least quarterly Reviews and challenges Group programmes, the alignment of
operating company-specific programmes with Group priorities
and strategy, and progress against plans
Operating company management
committee
At least quarterly Reviews and challenges operating company-specific
environment and people programmes
Sustainability Governance
Forum Frequency of meetings Responsibility in relation to sustainability
IAG Sustainability Steering Group
(SSG)
At least quarterly Comprised of senior representatives from across the Group who
provide oversight of environmental and social initiatives and
reporting
IAG Sustainability network Monthly Sharing sustainability updates and ideas across all business units
and over 30 sustainability representatives. In 2023, the ISN
Sustainability network met 12 times, including 4 workshops
hosted in the UK, Spain, Ireland and Poland. Reports into the IAG
Sustainability Steering Group (SSG)
Hangar 51 Governance Committee At least bi-annually Reviews new potential investments to consider emerging climate
technologies and partnerships with sustainability start-ups.
Members include the Chief Commercial Strategy Officer, Chief
Financial Officer, Chief Information, Procurement, Services and
Innovation Officer
Sustainability continued
C. Principles of sustainability governance
38

Sustainability Working Groups (launched in 2023)
Forum Frequency of meetings Responsibility in relation to sustainability
Reporting and Disclosures Working
Group
Monthly A cross-Group working group designed to monitor IAG
sustainability disclosures against our regulatory requirements.
Assessment framework responses also discussed.
Waste Working Group Monthly A cross-Group meeting focusing on waste strategy, projects
andprogress.
Sustainability Key Performance
Indicator (KPI) Working Group
Monthly A cross-Group forum for sharing best practice and improving
KPIreporting
SAF Governance
Forum Frequency of meetings Responsibility in relation to sustainability
IAG SAF Steering Group At least quarterly Comprised of senior representatives from across the Group who
provide oversight of SAF strategic direction and approval for
new purchases and investments
IAG SAF Management Group Monthly A cross-Group meeting focusing on SAF strategy, projects, and
progress. Reports into IAG SAF Steering Group.
Governance responsibilities
Individual Frequency of reporting Responsibility in relation to sustainability
IAG CEO At least quarterly Chairs the IAG Management Committee, updates the Board,
andensures Board-level decisions are directed into action across
the Group
IAG Chief People, Corporate Affairs
and Sustainability Officer (CPCASO)
At least quarterly Reports to the IAG CEO. A member of IAG Management
Committee. Chairs the SSG and provides approval and direction
of Group programmes
IAG Group Head of Sustainability Regularly as relevant Reports to the IAG CPCASO. Chairs the Sustainability network
IAG Group Head of People Regularly as relevant Reports to the IAG CPCASO
Wider governance
Wider governance processes integrate sustainability aspects. As part of the Group-wide ERM process, sustainable aviation and
people, culture and employee relations risks are presented bi-annually to the Audit and Compliance Committee and annually to the
Board. One-year financial plans and three-year business plans are coordinated by Group Finance and include sustainability aspects.
39

C.3. Workforce governance
Relevant standards: GRI 2-30, 404-1,
404-2.
Each operating company within IAG
iscommitted to creating a work
environment in which safety and
wellbeing are paramount, in which
employees are treated fairly and
rewarded appropriately, and feel
motivated and can thrive. We believe
our employees are central to the
continued success of the Group.
Working policies and rights at work
At IAG our core principles include fair
and equal treatment, non-discrimination,
fairness and respect for human rights.
These are central to our IAG Code of
Conduct which applies to all employees
and directors across the Group.
Employees have been equipped with
comprehensive training and
development opportunities, ensuring
they are well-versed in essential topics
such as the Code of Conduct and
Compliance with Competition Laws.
Operating companies are responsible
fortheir own supplementary employee
policies and procedures, including
appropriate reward frameworks aligned
to local markets and roles, so they
remain competitive in attracting the best
talent. We have seen a wide selection
ofemployee benefits and recognition
schemes introduced in the operating
companies. For senior leader
remuneration across our operating
companies, we have deliberately focused
on variable pay and long-term incentives,
aligning leadership compensation with
performance and long-term strategic
goals to drive performance. We have
taken a restrained approach to executive
pay, remaining committed to fairness
and competitiveness.
Collective bargaining arrangements are
in place for 87% of the workforce.
Our operating companies have focused
on securing collective bargaining
agreements with unions to ensure fair,
competitive and sustainable pay –
providing stability for our business and
colleagues in challenging times.
IAG complies with International Labour
Organization (ILO) conventions. These
conventions cover fundamental
principles and rights at work: freedom of
association, the effective recognition of
the right to collective bargaining, the
elimination of all forms of forced or
compulsory labour, the elimination of
discrimination in respect of employment
and occupation.
IAG operating companies have effective
dialogue through employee forums and
through trade unions where they are
recognised. In addition, the IAG
European Works Council (EWC)
facilitates communication and
consultation between employees and
management on transnational European
matters. The EWC includes
representatives from the different
European Economic Area (EEA)
countries. It meets regularly throughout
the year to inform and, where
appropriate, consult on transnational
matters which impact employees in two
or more EEA countries.
Each operating company continues to
focus on engagement, listening and
acting on colleague feedback. In addition
to specific initiatives to measure
employee satisfaction, IAG runs a
twice-yearly Organisational Health Index
(OHI) survey to track our transformation
and culture development, and to
benchmark management practices and
leaders against a global external
framework. Alongside leadership support,
each operating company has established
teams to identify themes and incorporate
these into broader people plans.
Finally, Board members carry out
workforce engagement visits with
colleagues across our operating
companies – meeting a variety of
employees and leaders in their work
context to better understand the
challenges and opportunities of the
different businesses, employee issues
and levels of engagement. This is shared
with the Board to provide a balanced
perspective of stakeholder views and to
support broader decision-making.
Training and development
Each operating company is responsible
for the learning, development and talent
management within its business and
ensuring its workforce has the necessary
skills to support its strategy.
While training policies and programmes
are implemented at the operating
company level, all companies are
required to run mandatory corporate
training courses on topics such as the
Code of Conduct, Compliance with
Competition Laws, Anti-bribery and
Corruption Compliance, and Data
Privacy, Security, and Protection.
74,282
Employees trained
1
3,219,091
Training hours
Average Training Hours
Average training hours per employee
Collective bargaining arrangements
at 31 December 2023
United
Kingdom
Ireland
Europe
(other)
Spain
89%
96%
83%
49%
Female
Global
population
Male
55.2 hrs
39.3 hrs
45.8 hrs
C.4. Supply chain governance
Relevant standards: GRI 308-2,
GRI 414-2.
Overview
IAG Global Business Services (IAG GBS)
continues to engage with, support and
monitor suppliers to ensure all products
and services provided to IAG are on a
path to net zero by 2050.
The IAG GBS Group Procurement team
leads the Supply Chain Sustainability
Programme by delivering in four key areas:
• The Supplier Code of Conduct (SCoC);
• Independent risk screening and
sustainability assessments;
• Corporate Social Responsibility (CSR)
Audits; and
• Embedding sustainability as standard
in the procurement process.
1 Average training hours is based on the totaltraining hours performed per average headcount, pro-rated to Full Time Equivalent (FTE)
Sustainability continued
C. Principles of sustainability governance
40

Tracking metrics and progress
GRI Standard vly 2023 2022 2021 2020 2019
Total number of suppliers
308-2,
414-2
14% 15,998 14,045 13,272 22,947 27,033
Suppliers screened 14% 15,998 14,045 13,272 22,947 18,369
Suppliers with additional compliance assessments (28%) 400 557 1,510 1,818 2,912
Critical suppliers under regular risk monitoring (41%) 19 32 34 35 n/a
Independent CRS audits 19% 38 32 30 25 28
Total number of EcoVadis’ scorecards 12% 568 561 228 120 nr
Issued Supplier Code
of Conduct
All suppliers screened
for sustainability risks
Embedding
sustainability
intocategory planning
2019 2020 2021 2022 2023
Net Zero Scope 3
commitment
EcoVadis partnership
and supplier
sustainability clause
Activities in 2023
The SCoC continues to be shared with
new suppliers as part of the onboarding
process. New suppliers are requested
toacknowledge their commitment
toachieving net zero emissions by 2050,
and the need for a roadmap, supported
by deliverable plans, to achieve this target.
IAG GBS is also partnering with
EcoVadis, a market-leading provider
ofbusiness sustainability ratings,
toassess supplier scorecards with a
comprehensive methodology covering
environment, labour and human rights,
ethics and sustainable procurement.
This gives IAG and its suppliers a
baseline for improvements, and suppliers
can share them with customers and
other stakeholders, which benefits wider
industry sustainability. Once a scorecard
is shared with IAG GBS, results are
reviewed to ensure the suppliers
sustainability performance is aligned
with IAG’s vision and strategy. If a
supplier's performance score is assessed
as less than 45 (out of 100), a Corrective
Action Plan (CAP) is requested for
improvement.
IAG became a SEDEX member in 2023.
SEDEX provides data insights to help
companies improve ESG performance.
As part of the SCoC adherence and
legislation requirements under the UK
Modern Slavery Act, suppliers are
subject to third-party audit under a
labour and human rights protocol such
as the SEDEX Members Ethical Trade
Audit (SMETA) methodology. In 2023,
38 of these audits were completed. By
joining SEDEX, IAG aims to understand
information about the ethical practices
of their suppliers, including audits.
All suppliers also undergo annual
compliance screening for any legal and
financial risks. The Group Procurement
and Compliance teams assess any
suppliers identified as having potentially
higher levels of risk and implement
mitigation plans where necessary. Any
issues are flagged to the risk owners
within the Group to jointly take
appropriate action.
IAG GBS has embedded sustainability
aspects into the day-to-day operation of
the organisation and included
sustainability targets in the performance
objectives of all IAG GBS employees.
IAG GBS has verified the existing, active
supplier base and IAG's airlines’ interline
relationships in Russia and Belarus in
order to determine the potential
implications of, and actions to be taken,
due to the trade sanctions issued as a
response to the war in Ukraine. IAG has
provided operating companies with
support on mitigation actions to be
taken (e.g. payment stop/blockage).
This has been performed in coordination
with Compliance Teams.
Building a sustainable future in 2024
In 2024, IAG GBS will work to have
EcoVadis scorecards in place covering
90% of IAG’s total spend. “High-risk”
suppliers based on SEDEX’s risk
assessment will also be required to
perform an independent SMETA audit.
Related risk: Supply chain sustainability compliance
Risk and/or opportunity description
andpotential financial impact Mitigating actions
Potential breach of compliance on
sustainability, human rights or anti-
bribery by an IAG supplier resulting in
financial penalties, legal, environmental,
social and/or reputational impacts.
• IAG GBS procedures above as well as integrity, sanctions and IAG Know Your
Counterparty due diligence for higher-risk third parties
• Internal governance on supplier management to identify challenges and mitigation
• Supplier screening using external business intelligence databases which actively monitor
supplier status and flag risks including sustainability
Timeline of supply chain engagement activities
41

C.5. Ethics and integrity
governance
Relevant standards: GRI 102-16/-17,
205-1/-2/-3
Overview
All directors and employees are
expected to act with integrity and in
accordance with the laws of the
countries in which they operate.
IAG’s Code of Conduct, last revised in
2019 and approved by the Board, sets
out the general guidelines that govern
the conduct of all directors and
employees of the Group when
performing their duties in their business
and professional relationships. IAGdoes
not use Company funds orresources to
support any political party or candidate.
Mandatory Code of Conduct training
and communications activities are
carried out for directors, employees and
third parties on a regular basis to
maintain awareness and understanding
of the principles that govern the
conduct of the Group. This document is
available on the IAG website.
In 2023, a new Group Head of Ethics and
Compliance was appointed, with the
overall responsibility for developing,
maintaining and overseeing the
implementation of the enterprise-wide
IAG compliance programme, which
includes the harmonisation of the
programme across the different operating
companies and supporting an overarching
ethics and compliance culture.
IAG has in place a Group-wide
Whistleblowing Policy and a
consolidated whistleblowing channel
provided by an independent third-party
provider, Navex, where concerns can be
raised on an anonymous and confidential
basis. This channel is available to
members of staff as well as suppliers,
with information on how to access it
published in IAG’s Code of Conduct and
Supplier Code of Conduct. If any
employee has a concern about unethical
behaviour or organisational integrity,
they are encouraged to first speak with
their manager or a member of the Legal,
Compliance or Human Resource teams.
Similarly, suppliers are encouraged to
contact their primary contact within the
business. Regardless, the whistleblowing
channel is available for everyone who
wishes to report a concern.
IAG will not tolerate any retaliation
against individuals using the
whistleblowing channel or contributing
to investigations arising from reports to
the whistleblowing channel.
Whistleblowing reports received for
each operating company are triaged by
the Compliance teams to direct to the
most appropriate area for investigation,
maintaining independence in this
investigation process.
The IAG Audit and Compliance
Committee reviews the effectiveness of
the external whistleblowing channel and
internal relevant reporting channels on
an annual basis. This annual review
considers the volume of reports by
category; timeliness of follow-up;
process and responsibility for follow-up;
emerging themes and lessons; and any
issues raised of significance to the
financial statements or reputation of the
Group or other areas of compliance.
In 2023, whistleblowing reports
concerned issues relating to
employment matters (61%), dishonest
behaviour/reputation (34%), health and
safety (3%) and regulatory matters (2%).
All reports were followed up and
investigated where appropriate and
measures were implemented where
concerns were identified.
Anti-corruption and anti-money
laundering
IAG and its operating companies do not
tolerate any form of bribery or
corruption. This is made clear in the
Group Code of Conduct and supporting
policies which are available to all
directors and employees. An anti-bribery
policy statement is also set out in the
Supplier Code of Conduct.
IAG has in place a Group-wide anti-
bribery and corruption policy. This
document sets out the minimum
standards that are expected by the
Group, its directors and employees,
including definitions and guidance for
bribery, gifts and hospitality guidance,
political and charitable donations, public
officials, facilitation payments amongst
others.
Each Group operating company has a
Compliance Department, responsible for
managing the anti-bribery programme in
its business. The compliance teams from
across the Group meet regularly through
Working Groups and Steering Groups,
under the coordination of IAG’s Group
Head of Ethics and Compliance. They
conduct an annual review of bribery
risks at operating company and Group
level.
The main compliance risks identified for
2023 were unchanged from the previous
year and relate to the use of third
parties, operational and commercial
decisions involving government
agencies, and the inappropriate use of
gifts and hospitality. No material
compliance breaches were identified in
2023, as in 2022. Anti-bribery and
corruption training is mandatory for all
relevant personnel in IAG operating
companies and Group functions.
Individual training requirements are set
by each operating company and
function and are determined by factors
such as the level and responsibilities of
an employee. A Group-wide anti-bribery
e-learning module was rolled out in 2019
and is required to be completed every
three years.
To identify, manage and mitigate
potential bribery and corruption risks,
IAG uses risk-based third-party due
diligence which includes screenings,
external reports, interviews and site
visits depending on the level of risk that
a third party presents. Any risks
identified during the due diligence
process are analysed and a mitigation
plan put in place as necessary. Certain
risks could result in termination of the
proposed or existing relationship with
the counterparty. The IAG Audit and
Compliance Committee receives an
annual update on the anti-bribery
compliance programme.
There were no legal cases regarding
corruption brought against the Group
and its operating companies in 2023, as
in 2022, and management is not aware
of any impending cases or underlying
issues.
IAG has processes and procedures in
place across the Group, such as supplier
vetting and management, Know Your
Counterparty procedures and financial
policies and controls, which help to
combat money laundering and other
compliance risks across the business.
vly 2023 2022 2021 2020 2019
Employees completing anti-bribery e-learning 76% 8,574 4,880 1,404 1,984 7,933
Speak Up (whistleblower) reports 29% 324 252 164 193 nr
Sustainability continued
C. Principles of sustainability governance
42

C.6. ESG risk management
Relevant standards: GRI 102-11/-15.
Overview
Sustainable aviation risks and People,
culture and employee relations risks
arereported as principal risks to IAG.
These risks are considered and assessed
under the Group Enterprise Risk
Management (ERM) framework which
ispresented bi-annually to the Audit
andCompliance Committee and
annually to the SECR Committee and
Board. More details on this framework,
risk identification and assessment, and
risk management can be found in the
Risk management and principal risk
factorssection.
All principal risks are linked to the
Groupstrategic priorities which include
sustainability.
Sustainability risks and opportunities,
including climate-related risks and
opportunities, are also identified and
assessed by the Group Sustainability
team, in conjunction with the Group
ERM team, and presented to the IAG
CPCASO, IAG Management Committee
and SECR Committee. Plans to mitigate
risks are developed by relevant risk
owners in specific areas of the business,
with agreed initiatives included in
relevant operating company business
plans. Where risk treatments require
time to implement, short-term
mitigations are assessed and the
timeline to risk mitigation and
consequent risk acceptance discussed
and agreed by stakeholders.
People, culture and employee relations
risks are managed by the Group’s
operating companies with guidance
from the Group as appropriate.
Impact on operations and strategy
Sustainability risk assessments have
informed specific decisions related to
business operations and strategy, and
IAG allocates significant resources to
environmental risk management.
Examples include:
• In 2019, IAG designed and adopted
the industry leading Flightpath Net
Zero strategy in response to the need
for more ambitious action on climate
change. The Group maintains its
commitment to net zero emissions
by2050, and continues to invest
tomeet that strategy;
• In 2021, IAG set a new net zero target
by 2050 for Scope 3 emissions and
IAG GBS appointed EcoVadis to
helpto track supplier sustainability
performance and mitigate supply
chain-related sustainability risks;
• In 2022, IAG expanded its
commitment to invest in SAF
development, production and supply,
to manage climate policy risks and
take advantage of energy-related
opportunities; and
• As of 31 December 2023, IAG
investment in SAF production and
supply increased further to $1 billion,
of which 86% is future commitments,
as we continue to scale up the use
ofSAF in our operations. This price is
based on an assumed jet fuel price of
$800 per metric tonne and contracted
margins for SAF production.
IAG is committed to mitigating the
impacts of hazards which, if they occur,
have uncertain but potentially negative
outcomes on the environment or people.
IAG adopts precautionary measures to
mitigate these hazards, an approach
known as the precautionary principle.
For example, the precautionary principle
is applied to the planning of operations
and the development and launch of new
services IAG integrates climate
considerations into three-year business
plans and one-year financial forecasts
and aligning activities with
theFlightpath Net Zero strategy.
IAG also manages risks via the use of
ISO-14001-aligned environmental
management systems. IEnvA is the
airline industry version of ISO 14001, the
international standard for environmental
management systems. IEnvA is tailored
specifically for airlines and is fully
compatible with the International
Organization for Standardization (ISO).
The Group’s airlines completed the
certification process for the IEnvA
standard in 2023, except for Vueling
which achieved Stage 2 certification in
2022. Following this exercise, both
British Airways and Aer Lingus were
awarded Stage 2 certification in 2023.
Iberia was awarded Stage 2 certification
in January 2024. Please refer to section
A.2.3. ’Environmental Management’
formore details.
In terms of the amount of provisions and
warranties for environmental risks, IAG
and its operating companies does not
currently take out any specific insurance
to cover environmental risks.
Related risk: Environmental regulation compliance
Risk description and potential financial impacts Mitigating actions
An inadvertent breach of compliance
requirements related to ESG reporting,
emissions or waste management, or other
environmental issues, leading to fines and
potential reputational damage.
• Strengthening sustainability governance including reviews of annual disclosures via
the Audit and Compliance Committee
• Internal governance, training and assigning ownership for environmental compliance
obligations
• Maintaining IEnvA accreditation to improve internal compliance processes
43

C.7.1. Reporting and data
governance
The full contents of this sustainability
report are included in the IAG Non-
Financial and Sustainability Information
Statement (NFIS), which is third-party
independently verified to limited
assurance standards in line with
ISAE3000 (Revised)
1
standards. IAG is
working towards reasonable assurance
by 2026. Compliance with specific
frameworks and standards is listed
under relevant section headings.
IAG complies with current and emerging
standards on sustainability reporting.
These include obligations under EU
Directive 2014/95/EU on non-financial
reporting and its transposition in the
UKand Spain, the 2018 UK Streamlined
Energy and Carbon Reporting
regulation, the Task Force on Climate-
related Financial Disclosures (TCFD),
and the EU Taxonomy Regulation
(2020/852).
IAG aligns with selected GRI standards
based on compliance with Spanish Law
11/2018. In cases where GRI alignment
was not possible, other standards
aligned to airline industry guidance or
internal frameworks were used and
described.
Emissions data from intra-European
flights is also independently verified
within six months of the year end, for
compliance with the UK and EU ETS,
and for all flights for the UN CORSIA
scheme. Any material changes to key
metrics are highlighted in future Annual
Reports.
IAG also goes beyond compliance
requirements and voluntarily aligns
sustainability reporting with the
Sustainability Accounting Standards
Board (SASB), the IATA Airlines
Reporting Handbook, GRI Standards
formaterial issues, and relevant criteria
from external ESG rating agencies.
IAGsupported IATA and the GRI
todevelop the IATA handbook.
The scope of environment performance
data in this report includes all IAG
airlines, subsidiaries and cargo
operations over which IAG has
operational control. This is also the
scope of the net zero targets. Some
exceptions for non-material business
units have been applied for specific
metrics, and these are clearly stated
withrationale provided.
The scope of workforce and ethics and
integrity data includes all IAG operating
companies and support functions. Some
exceptions have been applied and these
are clearly stated with rationale
provided.
The scope of human rights and modern
slavery reporting is as above and
includes data from all suppliers in the
IAG supply chain.
For any specific cases where full-year
data was not available for selected
metrics, estimates have been applied
based on business forecasts and data
from prior months. Internal governance
is in place to ensure that any estimations
made are robust. Any prior-year
restatements are indicated next to
relevant metrics with reasons provided.
C.7.2. Alignment with GRI and SASB standards
Sustainability section Sustainability subsection GRI SASB
A.1. Planet –
climate change
A.1.3. Metrics and progress 305-1/2/3/4/5, 301-1, 302-1 TR-AL-110a.1.
A.1.4. Emissions reduction initiatives 305-5 TR-AL-110a.2.
A.1.7. Stakeholder engagement 102-13/-43/-44
A.2. Planet –
widerissues
A.2.1. Waste 306-1/-2/-3 (2020)
A.2.2. Noise and air quality 305-7
B. People and
prosperity
B.2. Workforce metrics 102-7/8, 401-1, 405-1, 102-41, 404-1, 403-9 TR-AL-310a.1.
B.6. Community engagement and charitable support 102-13, 201-1
C. Principles of
sustainability
governance
C.2. Governance frameworks 102-46/-48
C.3. Workforce governance 403-4, 408-1, 409-1
C.4. Supply chain governance 308-2, 414-2
C.5. Ethics and integrity 102-16, 102-17, 205-1/-2/-3
C.6. ESG risk management 102-11, 102-15
1 ISAE3000 is the assurance standard for compliance, sustainability and outsourcing audits, issued by the International Federation of Accountants
(IFAC).
Sustainability continued
C. Principles of sustainability governance
44

Agile risk management helping
toprotect the Group as it delivers
its strategic plan
Enterprise risk policy and framework
The Group has an enterprise risk
management (ERM) framework
underpinned by an ERM policy, which
has been updated in accordance with
Spanish corporate law and governance
and UK corporate governance
requirements and has been re-approved
by the Board in 2023. This sets out a
comprehensive risk management
process and methodology to ensure a
robust identification and assessment of
the risks facing the Group, including
emerging risks. The risk management
framework is embedded across all of the
Group’s businesses. Enterprise risks are
defined as any risk that could impact the
three-year strategic business plan (“the
plan”). They are assessed and if the
impact is above a threshold, plotted on
an enterprise risk heat map, based on
probability and impact. Consideration
isgiven to changes in the speed of
potential impact and how principal risks
influence other principal risks to help
assess where key mitigations can have
agreater effect on reducing overall risk
to the business. Risks are also
considered in combining events where
anumber of risks could occur together.
This process is led across the Group
bythe IAG Management Committee
supported by the ERM function.
Although the Group considers enterprise
risks that could impact the plan (defined
as the short term), it also considers
potential risks that could impact over
the medium term of up to five years and
in the longer term, beyond five years.
Risk outcomes are quantified as the
potential cash impact to the plan over
three years. Non-cash outcomes that
could impact our customers, employees,
reputation, sustainability targets or our
regulatory obligations are considered
forevery risk.
Key controls and mitigations are
documented, including appropriate
response plans. Where risk treatments
require time to implement, short-term
mitigations are assessed and the
timeline to risk mitigation and
consequent risk acceptance discussed
and agreed.
Every principal risk has clear
Management Committee oversight
atthe Group level and in each business.
Risk management and principal risk factors
45

IAG has a risk appetite framework which
includes statements informing the
business, either qualitatively or
quantitatively, of the Board’s appetite
for certain risks. Each risk appetite
statement applies either on a Group-
wide basis or for specific programmes,
initiatives or activity within the Group.
In the second half of 2022, the Board
assessed its appetite across a number of
critical strategic priorities to set
tolerances for the Group for 2023. This
approach allows tolerances to be set
more dynamically across the plan period
and aligns to the Group strategy as
approved by the Board, which set the
level of ambition and investment across
the plan period. The exercise allowed the
Board to discuss and consider the
trade-offs within the plan and ensure
that it was satisfied that management
had set the appropriate prioritisation
ofinitiatives to seek opportunities and
manage risk within its defined appetite
tolerances. This framework and
tolerances have been in place
throughout the year, with the Board
assessing its appetite across all of the
framework statements at year end
against the Group’s performance and
itsanticipated delivery of the Board-
approved strategic business plan
priorities and initiatives.
The Board is satisfied that the Group
continued to perform and deliver
initiatives throughout 2023 as planned
to mitigate risk as set out in its
framework statements and where
further action has been required, the
Board has considered potential
mitigations and, where appropriate or
feasible, the Group has implemented or
confirmed plans that would address
those risks or retain them within the
Board’s determined Group risk appetite.
In the second half of 2023, following the
Board strategy review, the Board
re-assessed its appetite for key risk
areas, taking account of changes in the
risk landscape since the prior year
exercise, for the upcoming plan period.
Regular re-assessment and confirmation
of the risk appetite of the Board ensures
its relevance and ongoing alignment to
the Group strategic priorities and allows
the Group to take appropriate risks to
deliver the plan.
Emerging risks
Where emerging risks and longer-term
threats that the Group or the industry
could face are identified, they are
managed within the overall risk
framework as “on watch” until they are
re-assessed to be no longer a potential
threat to the business or where an
assessment of the risk impact over
theplan period can be made, and
appropriate mitigations can be put in
place or the risk becomes a principal
risk. Other high-impact, low-likelihood
risks are also considered.
Agility in risk management
The Group’s ERM framework continues
to adapt and evolve to the needs of the
business and our stakeholders. This
allows the Group and its businesses to
both respond to changes in the external
risk environment and support the pace
and scale of business transformation,
recognising the Board’s appetite for risk.
During the year, management across the
Group have reviewed the
macroeconomic and geopolitical
landscape to identify emerging risks and
implications for existing principal risks as
well as competition and market risk
changes, particularly those that could
impact operational resilience, our
sustainability ambitions or the Group’s
transformation, innovation and change
agenda. By continuing to develop
theGroup’s assessment of the
interdependencies of risks, using
scenarios to quantify risk impact under
different combinations and assumptions,
and considering the risks within the
Group’s risk environment that have
increased or changed in their nature,
either as a result of external factors or
decisions within the Group’s businesses,
its Board and management are better
informed and can react more quickly.
New guidance from regulators and
investors is reviewed on an ongoing
basis and best practice sought from
other risk management sources.
Viability assessment
The Board’s assessment of the viability
of the Group is directly informed by the
outputs of the ERM framework. Full
details of our approach, scenarios
modelled and the viability assessment
are shown at the end of this report.
The IAG Board has overall
responsibility for ensuring that
the Group has an appropriate,
robust and effective risk
management framework.
Risk appetite
Risk management and principal risk factors continued
46

Risk management roles and responsibilities
The IAG Board has overall
responsibility for ensuring that
the Group has an appropriate,
robust and effective risk
management framework,
including the determination
ofthe nature and extent
ofrisk it is willing to take to
achieve its strategic
objectives.
The IAG Audit and
Compliance Committee
discusses risk and considers
the risk environment regularly
throughout the year, as does
the IAG Board as part of wider
Board discussions, in addition
to the IAG Audit and
Compliance Committee’s
bi-annual risk heat map
review, including a review of
the assessment of the Group’s
performance against its risk
appetite for the financial year,
scenarios for assessment of
viability and theoutputs from
the viability modelling. The
Audit and Compliance
Committee has early sight of
management consideration of
viability scenarios to enable it
to challenge subjectivities and
confirm rationale. It then
reviews the outputs at year
end and makes
recommendations on the
viability assessment and
statement to the Board.
The IAG Board reviews the
Group’s risk heatmap annually
and it has completed a robust
assessment of the Group’s
emerging and principal risks in
the year.
The IAG Board sets risk
appetite for the plan period.
Across the Group, risk owners
are responsible for identifying
potential risks and
appropriately managing
decisions within their area of
responsibility that could
impact business operations
and delivery of the plan.
As the Group undertakes
transformation activities within
its operating companies,
thepace and agility of the
changes required create risks
and opportunities. For
transformational risks,
business owners are assigned,
and the business will agree
appropriate mitigations and
timelines for implementation,
following discussions with all
relevant stakeholders.
Emerging risks are assessed
and risk owners consider and
identify any potential impact
to plans. Longer-term ‘on
watch’ risks are subject to
review as part of the
framework.
Management is responsible for
the effective operation of the
internal controls and execution
of the agreed risk mitigation
plans.
The IAG Management
Committee reviews risks
during the year, including the
Group risk heat map semi-
annually in advance of reviews
by the Audit and Compliance
Committee, in accordance
with the 2018 UK Corporate
Governance Code and the
Spanish Good Governance
Code for Listed Companies.
At the year end, the IAG
Management Committee
reviews the performance of
the Group during the full year
against the risk appetite
framework and reports any
near tolerance or out of
tolerance assessments to the
Audit and Compliance
Committee.
The IAG Management
Committee recommends
severe but plausible scenarios
for stressing the strategic
business plan as part of the
annual Group viability
assessment.
IAG Board and Audit
and Compliance
Committee
Risk owners
and management
Operating companies’
management
committees
IAG Management
Committee
Risk heat maps for each
operating company and
central functions are reviewed
semi-annually by their
operating company’s
management committee or
function leadership team.
Where the Group’s operating
companies have a reliance on
other parts of the Group for
services delivery, risks are
reflected appropriately across
risk heat maps to ensure
accountability is clear.
They escalate risks that have a
Group impact or require Group
consideration in line with the
Group ERM framework.
They confirm to their
operating company board and
audit committees, where they
exist, as to the identification,
quantification and
management of risks within
their operating company at
least annually.
Local risk heat maps are in
place for subsidiary
businesses, together with
Group support platforms
including Group Procurement
and Services and IAG Tech.
Enterprise Risk Management
function
The Enterprise Risk Management
function provides support across the
Group to ensure risk management
processes areappropriately embedded
and applied consistently, as well as
working with management to identify
risk, challenge assessments and
strengthen the risk culture across the
Group. The function provides risk
management guidance and shares
best practice across the Group and its
operating companies, keeping them
informed of any risk-related regulatory
developments. The function is
responsible for ensuring that the ERM
framework remains agile and
responsive to meet the needs of the
business and its stakeholders.
The ERM function works with other
compliance and Group functions, such
as Group Finance, Government Affairs,
InvestorRelations, Legal, Ethics and
Compliance, and Sustainability,
leveraging their frameworks and
assessments where appropriate.
Riskassessments form an important
input into the Internal Audit planning
and delivery process.
47

Key for principal risk factors table
The highly regulated and commercially
competitive environment, together with
the businesses’ operational complexity,
expose the Group to risks, where its
influence and ability to directly manage
the risks may be limited.
Examples include aircraft and
component availability, and engine
performance and reliability; the wider
ongoing fundamental weaknesses in the
resilience of the aviation sector’s supply
chain; air traffic control (ATC) resilience
and industrial unrest in third parties
impacting operations; and policy
measures taken by governments to
address the economic environment or
policy proposals that could impact the
Group’s airlines’ ability to set capacity
and/or pricing.
Principal risks influence
The relative level of influence each principal risk has on the
other principal risks
Principal risk radar
The assessed likelihood of risk materialisation for each
principalrisk
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Business and
operational
risks
Strategic
risks
Financial
risks
Compliance
and regulatory
risks
Influence of risk
1
2
3
4
6
7
Business and
operational
Strategic
Financial
Compliance
and regulatory
8
9
10
11
12
13
14
15
16
Low High
5
Stakeholder
impact
Customers Employees Suppliers Shareholder,
lenders
andother
financial
stakeholders
Governments
and regulators
Strategic
imperatives
Strengthening
our core
Driving earnings
growth through
asset-light
businesses
Operating under
a strengthened
financial and
sustainability
framework
Other external threats which remain
heightened include: the impact of
inflation and interest rates on demand
and customer confidence; higher costs
in the supply chain; and the impact of
escalating and ongoing geopolitical
tensions and conflict in various regions
impacting our customers and flight
operations as well as creating further
airspace restrictions.
In assessing its principal risks, the Group
has considered its operational resilience
across its businesses, the status of the
financial markets, customer mix changes,
political risk and government changes,
including upcoming elections, pace of
transformation, artificial intelligence (AI)
adoption, the Group’s industrial relations
landscape and people engagement and
securing talent and expertise to support
operations and deliver cultural change.
No new principal risks were identified
through the risk discussions in the year.
One risk has been reconsidered as part
of the reviews and has been reframed
as‘Transformation, innovation and AI’
from ‘Transformation and change’ to
recognise how the Group’s change
agenda is underpinned by investment
which will leverage innovation and AI
tools to accelerate the delivery of
customer-centric, efficient processes
and tools to run our businesses.
The risk around ‘Critical third parties in
the supply chain’ is now assessed under
Business and Operational risk given the
nature of the potential impacts facing
the Group (having previously been
categorised as a Strategic risk).
Year in review
Principal
risk number
1
Risk
trend
Increase
Stable
Decrease
Risk management and principal risk factors continued
48

Principal risk
Principal risk factor table
Strategic
imperatives
Stakeholder
impact
Risk trend
2023 2022
Viability
scenario
Strategic
Financial risk including tax
Compliance and regulatory
1
1
32
2
4
Business and operational
1
Brand and customer trust
Chief Commercial Strategy Officer/Operating
company CEOs
2
Competitive landscape
Chief Commercial Strategy Officer
3
Economic, political and regulatory environment
Chief Commercial Strategy Officer
4
Sustainable aviation
Chief People, Corporate Affairs and
Sustainability Officer
1
1
1
1
3
3
3
2
2
2
4
4
5
Critical third parties in the supply chain
Chief Information, Procurement, Services
andInnovation Officer
6
Cyberattack and data security
Chief Information, Procurement, Services
andInnovation Officer/Operating company CEOs
7
IT systems and IT infrastructure
Chief Information, Procurement, Services and
Innovation Officer/Operating company CEOs
8
Operational resilience
Chief Information, Procurement, Services and
Innovation Officer/Operating company CEOs
9
People, culture and employee relations
Chief People, Corporate Affairs and Sustainability
Officer/Operating company CEOs
10
Safety or security incident
Operating company CEOs
11
Transformation, innovation and AI
Chief Information, Procurement, Services and
Innovation Officer/Chief Transformation and
Corporate Development Officer
12
Debt funding
Chief Financial Officer
13
Financial and treasury-related risk
Chief Financial Officer
14
Tax
Chief Financial Officer
15
Group governance structure
General Counsel
16
Non-compliance with key regulation and laws
General Counsel
49

Principal risk register
1
Brand and customer trust
Chief Commercial Strategy Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
2 3 4
Strategic relevance Status
• The Group’s brands are positioned in their
respective markets to meet their customer
propositions and deliver commercial value. Any
change in engagement or travel preferences
could impact the financial performance of the
Group.
• IAG will continue to focus on its customer
propositions to ensure competitiveness in its
chosen priority customer demand spaces and to
ensure that it adapts to meet changing customer
expectations.
• The Group is clear on the key levers to improve
brand perception and satisfaction for each of its
operating company brands.
The Group’s ability to attract and secure bookings and generate revenue
depends on customers’ perception and affinity with the Group airlines’
brands and their associated reputation for customer service and value. The
Group airlines’ brands are, and will continue to be, vulnerable to adverse
publicity regarding events impacting service and operations. Operational
resilience and customer satisfaction underpin customer trust. Reliability,
including on-time performance (OTP), service and product delivery, are key
elements of brand value and of each customer’s experience. Investment in
cabin and service propositions helps ensure that our customers choose to
fly with the Group’s airlines.
The Group continues to improve its disruption management capabilities
given the extent of the external disruption due to ATC and third-party
resilience issues, particularly over engine reliability. IAG remains focused on
strengthening its customer-centricity and all of the Group’s airlines continue
to support their customers through any disruption including schedule
adaptions where required. The Group continues to ensure that its operating
companies continue to adapt and focus their business models, products and
customer propositions to meet changing customer expectations and needs
(including those with additional needs). Customer sentiment to travel and
their expectations when they travel are intrinsic to brand health. The
resilience and engagement of our people as customer service ambassadors
to deliver excellent customer service is critical to retaining brand and
customer trust.
Risk description Mitigations
• Erosion of the brand and customer trust through
poor customer service or lack of reliability in
operations, may adversely impact the Group’s
leadership position with customers and
ultimately affect future revenue and profitability.
• If the Group is unable to meet the expectations
of its customers and does not engage effectively
to maintain their emotional attachment, then the
Group may face brand erosion and loss of
market share.
• Failure to meet customer expectations on
sustainability and the Group’s impact on
stakeholders and society could impact the Group
and its brands.
• All IAG airlines are considered within the brand portfolio review.
• Brand initiatives for each operating company have been identified and are
aligned to the Group’s business plan.
• Product investment to enhance the customer experience supports the
brand propositions and is provided for in the plan.
• All airlines track and report to IAG on their OTP and Net Promoter Score
(NPS) to measure customer satisfaction.
• Reviews of resilience, resourcing levels and schedule operability.
• Enhanced disruption management tools within airlines to allow customers
to manage their travel preferences.
• Increased focus on the end-to-end customer journey from flight search
through to arrival and baggage reclaim.
• The Group’s global loyalty strategy builds customer loyalty within IAG
airlines.
• The Group’s focus on sustainability and sustainable aviation including the
IAG climate change strategy to meet the target of net zero carbon
emissions by 2050.
• Robust portfolio process to determine the right investments across the
Group.
• Additional focus on customer feedback and proactive customer care.
Strategic
Guidance is provided below on the key
risks that may threaten the Group’s
business model, future performance,
solvency andliquidity.
Risks are grouped into four categories:
strategic risk, business and operational
risk, financial risk including tax, and
compliance and regulatory risks.
Where there are particular
circumstances that mean that the risk
ismore likely to materialise, those
circumstances are described below.
Additional key business responses
implemented by management are also
setout.
The list is not intended to be exhaustive
but does reflect those risks that the
Board and IAG Management Committee
believe to be the most likely to have a
potential material impact on the Group
during the plan period.
Risk management and principal risk factors continued
50

2
Competitive landscape
Chief Commercial Strategy Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• The markets in which the Group operates are
highly competitive. The Group faces direct
competition on its routes, as well as from
indirect flights, charter services and other
modes of transport. Some competitors have
other competitive advantages such as
government support or benefits from insolvency
protection.
• Regulation of the airline industry covers many of
the Group’s activities including route flying
rights, airport landing rights, departure taxes,
security and environmental controls. The
Group’s ability to comply with and influence
changes to regulations is key to maintaining
operational and financial performance.
The demand environment in the year has seen the restoration of capacity
into the market, with some markets exceeding pre-pandemic capacity levels.
The distortionary effects of government policy and/or aviation-specific
taxation or other regional or country-specific measures on the competitive
landscape, continue to be assessed. The Group is investing in new fleet and
products to maintain its competitive position in the markets in which its
airlines operate.
IAG supports the use of the Worldwide Airport Slots Guidelines system,
formulated by the International Air Transport Association (IATA), that
encourages competition but also supports reliable, established networks. The
Group responded to relevant consultations to inform regulators and to
propose balanced regulation and avoid introducing additional rules that
hamper the competitiveness of the industry.
In February 2023, IAG agreed the acquisition of the remaining 80% of Air
Europa, subject to relevant regulatory approvals.
The Group continues to consult and keep different stakeholders informed
over the impacts of government policies on aviation or policy asymmetry,
such as increases in Air Passenger Duty (APD) or distortionary policies on
carbon offsets.
Risk description Mitigations
• Competitor capacity growth in excess of
demand growth could materially impact
margins.
• Any failure of a joint business or a joint business
partner could adversely impact the Group’s
airline business operations and financial
performance.
• Some of the markets in which the Group
operates remain regulated by governments, in
some instances controlling capacity and/or
restricting market entry. Changes in such
restrictions may have a negative impact on
margins.
• Regulatory or policy changes may create
competitive distortion, impacting the Group’s
airlines and their competitiveness or business
model.
• The IAG Management Committee meets weekly and undertakes regular
operating company-specific reviews.
• The Board discusses strategy throughout the year and dedicates two days
per year to undertake a detailed review of the Group’s strategic plans.
• The Group strategy function supports the IAG Management Committee by
identifying where resources can be devoted to exploit opportunities and
accelerate change.
• The airlines’ revenue management departments and systems optimise
market share and yield through pricing and inventory management
activity.
• The Group maintains rigorous cost control and targeted investment to
remain competitive.
• The Group Procurement function reviews all critical contracts.
• The Group’s airlines are focused on customer-centricity and operational
resilience.
• The portfolio of brands provides flexibility as capacity can be deployed at
short notice as needed.
• The IAG Management Committee regularly reviews market share and the
commercial performance of joint business agreements.
• The Group’s airlines review their relationships with business partners,
supported where appropriate by the Group strategy function.
• The Group’s Government Affairs function monitors government initiatives,
represents the Group’s interest and forecasts likely changes to relevant
laws and regulations and responds to consultations on regulatory change
or policy that could impact the aviation industry or create competitive
distortion.
Strategic
See Financial review section
51

3
Economic, political and
regulatory environment
Chief Commercial Strategy Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• IAG remains sensitive to political and economic
conditions in the markets globally, particularly in
our hub markets. All of the following can be
influenced by political and economic change:
• Business and leisure demand for travel;
• Inflation impacts on the cost base;
• Access to markets for new or existing routes;
• Increasing levels and costs of regulation;
• Supply of products;
• Availability of services and/or resource;
• Ability to fly scheduled operations; and
• Pricing and pricing over ancillaries.
The economic impact of geopolitical events coming after the energy crisis
last winter, increases in commodity and wage costs from inflation and higher
interest rates drive continued significant uncertainty over the economic
outlook. The Group is closely reviewing the impacts of wage and supplier
inflation on margins and customer demand.
The re-opening of China at the beginning 2023 and removal of remaining
restrictions in countries, post the pandemic, has simplified operations and the
customer experience at airports. However ongoing conflicts, wars and
heightened tensions across the Middle East further increase airspace
restrictions and congestion for flows to Asia.
Wider macroeconomic trends are being monitored such as a potential
economic recession and tone of dialogue between the US, Russia, China and
the EU and UK which can influence markets and result in imposition of
misaligned policies or tariffs. The trend of increased nationalism and the
potential impact to the Group is also kept under review. Recent supply chain
disruptions have occurred in many markets and the level of disruption and
potential impacts are considered across the Group. The Group also considers
changes in government in key markets and the implications for trade,
respective economic health and how governments view the aviation industry,
with elections expected in the UK, Ireland and the US over the next year.
Developments in relevant international relationships, where they affect air
services agreements to which the EU or UK are party, are monitored
throughout the year and the Group’s positions advocated with the relevant
national governments. Recent government proposals to set floor or ceiling
caps on pricing, including the scope of ancillaries that airlines may be allowed
to charge their customers for, may impact the ability to freely set pricing, sell
ancillaries to meet customer needs and/or set capacity.
IAG has worked through trade associations, IATA, as well as national
governments to put its case on issues of the importance of aviation to
international trade and customer connectivity and the value that it brings.
Any further macroeconomic trends or potential requirements arising from
Brexit are monitored by the IAG Government Affairs function.
Risk description Mitigations
• Economic deterioration or structural change in
either a domestic market, key customer
segment or the global economy may have a
material impact on the Group’s financial position,
while foreign exchange, fuel price and interest
rate movements create volatility.
• Failure to adequately plan for and be able to
respond to uncertainty driven by geopolitical or
market events or health-related concerns
impacts the operations, costs and customers of
the Group.
• Changes in government may result in a change
in sentiment to aviation and access to markets.
• Government policy asymmetry impacting a
domestic market could increase the burden of
regulation and cost to our passengers.
• The IAG Board and the IAG Management Committee review the financial
outlook and business performance of the Group through the monthly
trading results, financial planning process and the quarterly reforecasting
process.
• Reviews to assess and drive the Group’s financial performance through the
management of capacity, together with appropriate cost control measures
including the balance between fixed and variable costs, management of
capital expenditure, and actions to improve liquidity.
• External economic outlook, fuel prices and exchange rates are carefully
considered when developing strategy and plans and are regularly
reviewed by the IAG Board and IAG Management Committee as part of
business performance monitoring.
• The Group’s Government Affairs function monitors government initiatives,
represents the Group’s interest and gives the Group and its operating
companies early sight of likely changes to laws and regulations.
• The Group engages with its regulators, governments and other political
representatives and trade associations to help represent the views and
contribution of the Group and aviation to society and economies.
• The Group’s airlines have increased their focus on enhanced disruption
management tools within airlines to increase operational resilience to
restrictions e.g. capacity constraints at airports or health-related measures.
Strategic
See the Regulatory environment section
Risk management and principal risk factors continued
52

4
Sustainable aviation
Chief People, Corporate Affairs
andSustainability Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1 2 4
Strategic relevance Status
• IAG is playing a leading role and working with
industry to accelerate aviation decarbonisation.
This means that environmental considerations
are integrated into the business strategy at
every level and the Group uses its influence to
drive progress across the industry.
• Our stakeholders and potential investors seek
confirmation over our sustainability agenda and
may link their purchasing, investment or lending
decisions to our commitments and progress
against them.
• Our customers look to ensure that our airlines
allow them to minimise their carbon footprint.
IAG is committed to a target of net zero carbon emissions across its
operations and supply chain by 2050, along with 2030 targets. The
Procurement function will have a key role to play in ensuring its delivery of
the Scope 3 commitment for the Group with supplier sustainability ratings
and sustainability clauses in supplier contracts key considerations for future
contract negotiations and renewals. IAG has also committed to 10%
Sustainable Aviation Fuel (SAF) usage on average across its fleet by 2030.
Plans implemented by the EU, UK and US governments to decarbonise
aviation have resulted in fragmentation of policy measures and support
offered by governments for green initiatives across the different regions in
which the Group airlines operate. SAF infrastructure and availability lags
demand, impacting the ability to achieve the aviation industry’s carbon
reduction commitments. Mandates and other tax-based measures may
disproportionately impact the Group’s airlines versus their competitors. All of
the Group’s airlines have agreed new deals for the production of SAF to
meet the Group’s target on the path to decarbonisation. Overall aviation
industry requirements will require infrastructure investments across markets
to support the production of SAF to meet demand expectations.
The Group continues to model potential impacts and costs, which includes
the removal of aviation jet fuel tax exemption, with mitigation plans
embedded into strategic and financial planning.
IAG was an early adopter of the Task Force on Climate-related Financial
Disclosures (TCFD) guidelines for climate-related scenario analysis and
climate-specific risk assessments. The Group continues with its assessment
of climate-related risks, by testing and revising the assumptions on updated
forecasts for future business growth and the regulatory context and future
carbon pricing. The Group has also embedded forecasting of its climate
impacts into its strategic, business and financial planning processes and has
assessed that it is resilient to material climate-related impacts.
Risk description Mitigations
• Increasing global concern about climate change
and the impact of carbon affects Group airlines’
performance as customers seek alternative
methods of transport or reduce their levels of
travel.
• New taxes, the potential removal of aviation jet
fuel exemptions and increasing price of carbon
allowances impact on price and demand.
Customers may choose to reduce the amount
they fly.
• The airline industry is subject to increased
regulatory requirements and policy asymmetry
driving costs, distortion and operational
complexity, as well as the potential for sub-
optimal outcomes for the planet.
• Demand exceeds supply to meet sustainable
fuel mandates or infrastructure and production
is not available in the markets the Group airlines
serve.
• SAF policy fragmentation results in different
in-scope allowances across markets, distorting
the competitive environment and levels of
carbon costs.
• Increasing severity of weather events results in
operational and customer disruption.
• IAG climate change strategy to meet target of net zero carbon emissions
by 2050.
• Annual incentive plans link manager bonuses to annual carbon intensity
targets.
• All of the Group’s airlines have platforms for customers to contribute
towards mitigating their flight emissions over time, including contributing
towards SAF or projects which remove carbon from the atmosphere.
• Embedded climate impacts into the financial statements, balance sheet,
financial forecasting and other relevant disclosures.
• IAG investment in SAF with operating companies continuing to secure
mid- and long-term supply agreements.
• IAG actively monitors the delivery of SAF procured.
• Fleet replacement plan is introducing aircraft into the fleet that are more
carbon efficient.
• Reporting on sustainability performance in the IAG supply chain to better
mitigate supply chain-related sustainability risks.
• Partnering with ZeroAvia to explore hydrogen-powered aircraft
technology.
• Participating in CORSIA, the ICAO global aviation carbon offsetting
scheme and the EU-ETS and UK-ETS emission trading schemes.
• Horizon scanning for potential partners and technology.
• Engagement across UK, EU and global trade associations to shape
effective climate policy and drive support for low-carbon solutions.
Strategic
See the Sustainability risks and opportunities section
53

5
Critical third parties
inthe supply chain
Chief Information, Procurement,
Servicesand Innovation Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
2
Strategic relevance Status
• Any sub-optimal service delivery or asset
supplied by a critical supplier can impact on the
Group airlines’ operational and financial
performance as well as disrupting our customers
and impacting our brand and reputation.
• Infrastructure decisions or changes in policy
bygovernments, regulators or other entities
could impact operations but are outside
theGroup’s control.
• London Heathrow has no spare runway capacity.
• An uncontrolled increase in the planned cost
ofexpansion of a hub airport, particularly
London Heathrow, could result in increased
landingcharges making the airport
uncompetitive versus other European hubs.
• Airport charges represent a significant
operatingcost to the airlines and have
animpact on operations.
• Inflationary cost pressures within the supply
chain may increase the cost of travel.
The aviation sector continues to be affected by global supply chain
disruption which has impacted aircraft deliveries, engine and component
availability and reliability, resource availability and/or threat of employee
industrial action in critical third parties and airport services, the level of
resilience of airports, particularly London Heathrow, and ATC capability and
restrictions. In August, a failure of UK national ATC services impacted flight
operations across the UK.
The Group proactively assesses its schedules for operability and continues to
work with all critical suppliers to understand any potential disruption within
their supply chains from either a shortage of available resource, strike action
or production delays which could impact the availability of new fleet, engines
or critical goods or services. Delays in new aircraft and spare engines, and
technical performance issues requiring additional maintenance continue to
impact operations and turnaround times for aircraft. This has led to increased
costs to secure such services. Focus has been placed on key suppliers given
the inflationary environment impacting wages and costs of goods, to
understand any business or operational continuity impacts, and where
possible identify other suitable suppliers. The Group has been impacted by
reliability and performance of GTF engines, which is mitigated with
replacement aircraft and remedy support from the engine manufacturer.
Many elements of the supply chain remain outside of the Group’s ability to
directly manage, including aircraft deliveries and availability of components,
airport performance and ATC resilience.
The Group continues to consult stakeholders and raise awareness of the
negative impacts of ATC airspace restrictions and performance issues on the
aviation sector and economies across Europe, particularly with the capacity
recovery and continued closure of airspace driven by geopolitical events.
The Group relies on the provision of airport infrastructure and is dependent
on the timely delivery of appropriate facilities. The Group continues to
challenge unreasonable levels of increases in airport charges, especially at
LondonHeathrow.
Risk description Mitigations
• IAG is dependent on the timely entry of new
aircraft and the engine performance of aircraft
to improve operational efficiency and resilience
and meet the commitments of the Group
sustainability programme.
• IAG is dependent on the timely, on-budget
delivery of infrastructure changes, particularly
atkey airports.
• IAG is dependent on resilience within the
operations of ATC services to ensure that its
flight operations are delivered as scheduled.
• IAG is dependent on the performance and costs
of critical third-party suppliers that provide
services to our customers and the Group such
as airport operators, border control and
caterers. Increases in costs or where suppliers
face ongoing financial stress or restructuring
where they exit the market for supply of
services may impact the Group’s operations.
• IAG is dependent on the availability and
production of alternative fuels to meet its
carbon commitments. This may require
investments in infrastructure in the markets
inwhich the Group operates.
• The Group mitigates engine and fleet performance risks, including delays to
delivery and unacceptable levels of carbon emissions, to the extent possible
by working closely with the engine and fleet manufacturers, as well as
retaining flexibility with existing aircraft return requirements and aircraft
lessors.
• The Group engages in regulatory reviews of supplier pricing, such as the
UKCivil Aviation Authority’s periodic review of charges at London Heathrow
and London Gatwick airports.
• The Group is active at an EU policy level and in consultations with airports
covered by the EU Airport Charges Directive.
• The Group proactively works with suppliers to ensure operations are
maintained and the impact to their businesses understood, with mitigations
implemented where necessary and inflation minimised.
• The Group Procurement function has oversight of all critical contracts
across the Group’s businesses.
• Alternative suppliers are identified where feasible.
• Transformation initiatives to offset inflation.
Business and operational
Risk management and principal risk factors continued
54

6
Cyberattack and datasecurity
Chief Information, Procurement,
ServicesandInnovation Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
3
Strategic relevance Status
• The cyber threat environment remains
challenging for all organisations, including the
airline industry. Cyber threat actors, criminals,
foreign governments and hacktivists have the
capacity and motivation to attack the airline
industry for financial gain and other political
or social reasons.
• The fast-moving nature of this risk means
that the Group will always retain a level
ofvulnerability.
The risks from cyber threats continue as threat actors seek to exploit any
weaknesses in defences particularly through social engineering and human
behaviours. The threat of ransomware attacks on critical infrastructure and services
remains high and increased in the year with heightened geopolitical tensions, with
the Group exposed to threat actors targeting IAG, its operating companies and its
suppliers. The Group continues toimprove its cybersecurity posture either through
major IT transformational change or additional monitoring through tools.
In the first half of the year, some of the Group’s businesses were impacted by an
attack on a third-party services provider holding employee data. The Group is
focused on improving its cybersecurity posture and better understanding the risk
presented by its suppliers.
The regulatory regimes associated with data and infrastructure security are also
becoming more complex with different regulators applying different framework
approaches and guidance for reporting. The Group airlines are subject to the
requirements of privacy legislation such as GDPR and the National Information
Security Directive (NISD).
The emergence and usage of AI to bypass cybersecurity controls, produce
phishing emails and malware has also accelerated attempts to access
organisations’ systems and data and increases the threat and scale of social
engineering attacks.
Investment in cybersecurity systems and controls continues as planned, although
addressing the risk is also dependent on business capacity and the delivery
ofsolutions to address technical obsolescence within IAG Tech. All planned
investment is linked to a Group-wide maturity assessment based on the National
Institute of Standards and Technology (NIST) cybersecurity framework, a leading
industry standard benchmark. Data centre migration activity to the cloud across
the Group’s airlines will further help to improve the security controls environment.
As the Group improves its security posture and maturity, it better understands
the rapid nature of potential attack vectors and how to detect them.
Risk description Mitigations
• The Group could face financial loss,
disruption or damage to brand reputation
arising from an attack on the Group’s
systems by criminals, foreign governments
orhacktivists.
• If the Group does not adequately protect
customer and employee data, it could breach
regulations and face penalties and loss
ofcustomer trust.
• Changes in working practices and
environments for the Group’s employees
andthird-party suppliers could result in new
weaknesses in the cyber and data security
control environment.
• The Group has a Board-approved cyber strategy that drives investment and
operational planning.
• A cyber risk management framework ensures the risk is reviewed across all
operating companies.
• The IAG Cyber Governance board assesses the portfolio of projects quarterly
and each operating company reviews its own portfolio at least quarterly.
• The IAG Chief Information, Procurement, Services and Innovation Officer
(CIPSIO) provides assurance and expertise around strategy, policy, training
and security operations for the Group.
• Detection tools and monitoring are in place. The Group-wide security
engineering and operations teams proactively seek to identify and respond to
threats and vulnerabilities, including ongoing testing of the Group’s defences.
• External attack surface monitoring and threat intelligence is used to analyse
cyber risks to the Group.
• External benchmarking on cyber posture with independent assessment in the
year by a specialist third party.
• Regular cyber awareness training run by the operating companies, including
annual mandatory training on cyber risk and data protection for all staff.
• Oversight of critical systems and suppliers to ensure that the Group understands
the data it holds, that it is secure, and regulations are adhered to.
• Data Protection Officers are in place in all operating companies, coordinated
through a Group-wide Privacy Steering Group.
• Working practices reviewed to ensure integrity of cyber and data security.
• All suppliers must adhere to IAG security requirements. A Group-wide
third-party risk management process integrates cybersecurity due diligence
into contracting processes to monitor supplier security performance.
• Security architecture team embedded into Datacentre migrations programmes.
• Desktop and simulated exercises to test business response plans.
Business and operational
55

7
IT systems and IT infrastructure
Chief Information, Procurement,
Services and Innovation Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
3
Strategic relevance Status
• IAG is dependent on IT systems for most key
business processes. Increasingly, the integration
within IAG’s supply chain means that the Group
is also dependent on the performance of
suppliers’ IT infrastructure, e.g. airport
baggageoperators.
• Competitors and new entrants to the travel
market may use digital tools, innovate or use
AIand technology more effectively and disrupt
the Group’s business model.
The Group recognises the importance of technology to business
transformation and growth. The CIPSIO works with the Group’s operating
companies to ensure appropriate prioritisation andinvestment in the Group’s
digital and IT transformation. Both are members of the IAGManagement
Committee.
The Group continues to review its IT operating model as it progresses with
digitalisation, migration to the cloud from on-premises data centres,
remediation and transformation of its networks and addressing
obsolescence. It has moved more resources into product teams more closely
aligned to business needs. The Group is reliant upon the resilience of its
systems and networks for key customer and business processes and is
exposed to risks that relate to poor performance, vulnerability or failure of
these systems. TheGroup continues with major programmes and upgrades
to modernise, including new commercial capabilities and customer-centric
enhancements using agile-based models, as well as replacing core IT
infrastructure and improving network connectivity and redundancy.
Mitigating actions that prioritise operational stability and resilience have been
built into all cutover plans for the go-live of IT systems-related changes. This
has strengthened the Group’s operating companies’ focus on addressing
their legacy estates to deliver digital customer experiences. The CIPSIO
works with the operating companies to ensure that their IT investment and
requirements are appropriately prioritised and delivered, value to the Group
from IT investment is maximised and central services can support the
Group’s businesses appropriately.
Risk description Mitigations
• The dependency on IT systems and networks
for key business and customer processes is
increasing and the failure of a critical system
may cause significant disruption to the
operation and lost revenue.
• The level of transformational change at pace
required by the Group’s airlines may result in
disruption to operations as the legacy
environment is addressed.
• Obsolescence within the IAG Tech estate could
result in service outages and/or operational
disruption or delays in implementation of the
Group’s transformation.
• Technology disruptors may use tools to position
themselves between our brands and our
customers.
• IAG Tech works with the Group operating companies to deliver digital and
IT change initiatives to enhance security and stability.
• Operating companies’ IT governance boards are in place to review delivery
timelines.
• Reversion plans are developed for migrations on critical IT infrastructure.
• System controls, disaster recovery and business continuity arrangements
exist to mitigate the risk of a critical system failure.
• Robust portfolio process to determine the right investments across
theGroup.
• IAG Tech CIPSIO and operating company management committee
members have strategic relationships with all critical IT suppliers and
oversight of all critical IT contracts across the Group’s businesses.
• The Group continues to develop platforms such as the New Distribution
Capability, changing distribution arrangements and moving from indirect
todirect channels.
• IAG Tech continues to create early engagement and leverages new
opportunities with start-ups and technology disruptors.
Business and operational
Risk management and principal risk factors continued
56

8
Operational resilience
Chief Information, Procurement,
Servicesand Innovation Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1 2 3
Strategic relevance Status
• The Group’s airlines may be disrupted by
anumber of different events.
• A single prolonged event, or a series of events
inclose succession, impact on the Group airlines’
operational capability, financial status and brand
strength.
• The Group needs to adhere to local
governments’ restrictions and regulations,
especially related to safety and public health,
and is therefore sensitive to any consequential
impact on demand.
The Group is reliant on critical third parties for services and goods, many of
which have been impacted by resourcing challenges, inflation and supply
chain disruption. Ongoing labour shortages, particularly for technical licensed
staff, industrial unrest and strike action in the aviation sector combined with
goods availability shortages in the supply chain, especially engines, and
airspace and ATC restrictions can all impact the operational environment and
the customer experience of the Group’s airlines and increase the costs of
running operations to provide additional resilience, as well as impacting the
costs and operations of the businesses onwhich the Group relies.
The Group continues with its ambitious IT infrastructure transformation
agenda to modernise and digitalise its IT estates. The Group is focused on
minimising any unplanned outages or disruption to customers with additional
resilience built into the airlines’ networks.
The Group continues to consider and build its resilience to withstand severe
unexpected stresses. Potential high-impact, low-likelihood events have been
considered that could have the potential to disrupt IAG and/or the aviation
sector. Many of these events remain outside the Group’s control such as
adverse weather, another pandemic, civil unrest or a terrorist event seen
incities served by the Group’s airlines.
Risk description Mitigations
• An event causing significant network disruption
or the inability to promptly recover from
short-term disruptions may result in lost
revenue, customer disruption and additional
costs to the Group.
• Public health concerns impacting populations
atscale could see an adverse effect on the
Group where governments choose to impose
restrictions, as would any future pandemic
outbreak, or other material event impacting
operations or customers' ability to travel.
• The Group’s airlines may not be able to resource
their operations sufficiently resulting in impacts
to customers and brands.
• The Group’s airlines are reliant on critical third
parties to deliver goods and services to maintain
operations and meet customer expectations and
any failure of the level of service or reliability
and delivery of goods may impact operational
resilience and our customers.
• Management has business continuity plans to mitigate this risk to the
extent feasible, with focus on operational and financial resilience and
customer and colleague safety and recovery.
• The Group’s airlines have standby aircraft and crew in place to improve
resilience.
• Resilience to minimise the impact of ATC airspace restrictions and strike
action on the Group’s customers and operations is in place.
• All of the Group’s airlines are focused on developing customer disruption
management tools to help our customers in times of disruption.
Business and operational
57

9
People, culture and employee
relations
Chief People, Corporate Affairs
andSustainability Officer
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
2
Strategic relevance Status
• The Group has a large unionised workforce with
around 87% of colleagues represented by one
ofa number of different trade unions under
collective bargaining agreements (CBA). IAG
relies on the successful agreement of collective
bargaining arrangements across its operating
companies to operate its airlines.
• The right skillsets and culture are needed to
transform our businesses at pace.
• The Group’s airlines require specialist skillsets
tocontinue to operate.
Our people, their engagement, cultural appetite and mindset for change are
critical to the Group’s current performance and future success. Our
leadership recognises the efforts of our staff and their commitment through
the continued operational challenges facing our airlines. Resource shortages
in crew have been addressed and our businesses are building the knowledge
and experience of their new starters and managing the cultural impacts of
onboarding at scale to ensure they have the right capabilities to operate.
Shortages in technical licensed staff across the aviation sector and in the
Group airlines may impact maintenance delivery timelines unless resource
levels can be secured.
Across the Group, collective bargaining is in place with various unions.
Where agreements are open, our operating companies continue to engage
indiscussions with unions to secure sustainable agreements and address
concerns arising within the negotiations. In September, AENA announced
theresult of its competitive tender for ground handling licences at airports
across Spain, which resulted in the loss of key airports to another provider,
with unions for Iberia ground handling services taking strike action in January
2024. Iberia plans to create a new handling company, which will provide
handling services and all airport staff affected by the AENA decision will be
moved to the new company, with a new sector CBA and conditions for
existing Iberia employees.
The Group is focused on staff wellbeing and people morale and motivation,
including supporting agile and hybrid working models. Welfare support
schemes are in place to support the Group’s staff, and initiatives to build
trust and engagement continue across the Group’s businesses. The Group
has identified the skills and capabilities that are required to manage its
transformation, which include enhancing its leadership capability and
delivering on the Group’s diversity and inclusion plans. All operating
companies recognise the critical role that their employees will play in the
transformation and future success of the Group and they are focusing on
improving organisational health and employee engagement.
Risk description Mitigations
• Any breakdowns in the bargaining process
withthe unionised workforces may result in
subsequent strike action which may disrupt
operations and adversely affect business
performance and customer perceptions
oftheairlines.
• Our people are not engaged, or they do not
display the required leadership or cultural
behaviours.
• The Group businesses fail to attract, motivate,
retain or develop our people to deliver service
and brand experience.
• Critical skillsets are not in place to execute on
the required transformation plan or to exploit
innovation and AI opportunities and drive the
business forward.
• Technical licensed staff, including pilots
andengineers, may be impacted by Brexit
recruitment restrictions.
• Ongoing information sharing, consultation and collective bargaining with
unions across the Group take place on a regular basis led by operating
companies’ human resources specialists, who have a strong skillset in
industrial relations.
• Ensuring that remuneration is aligned to local markets in terms of
productivity and pay.
• Operating companies’ people strategies are in place in our businesses.
• Succession planning within and across operating companies has been
reviewed by the IAG Management Committee and Board and a consistent
process is being implemented across the Group.
• Focus on recruiting and developing skills to run and transform our business.
• The Group is investing in apprentice programmes and retention initiatives to
help secure and retain engineers.
• Operating companies’ engagement and organisational health surveys have
been conducted with subsequent action plans developed to create
apositive and inclusive culture.
• Access to support individuals’ wellbeing.
• IAG Code of Conduct is supported by annual awareness programmes
andmandatory training for all of our staff.
Business and operational
Risk management and principal risk factors continued
58

10
Safety or security incident
Operating company CEOs
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• The safety and security of our customers
andemployees are fundamental values for
theGroup.
• High profile external events impacting the
aviation sector and aircraft may change
customer sentiment towards air travel.
The IAG Safety, Environment and Corporate Responsibility (SECR)
Committee of the Board and the board of each operating company continue
to monitor the safety performance of IAG’s airlines. Safety and security
responsibility lies with each Group airline in accordance with its applicable
standards. Further detail is provided in the SECR Committee report.
Risk description Mitigations
• A failure to prevent or respond effectively
toamajor safety or security incident or
intelligence may adversely impact the Group’s
brands, operations and financial performance.
• The corresponding safety committees of each of the airlines of the Group
satisfy themselves that they have the appropriate resources and procedures,
which include compliance with Air Operator Certificate requirements.
• The Group’s airlines have comprehensive training and maintenance
programmes in place, supported by a just culture environment, where
everyone is accountable for their actions and their performance is reflective
of the knowledge, behaviours and skills they have.
• There is ongoing security engagement with airports, regulators and public
authorities across the airlines’ networks.
• Incident centres respond in a structured way in the event of a safety
orsecurity incident or intelligence.
Business and operational
See SECR report
59

11
Transformation, innovationandAI
Chief Information, Procurement,
Services and Innovation Officer
Chief Transformation and Corporate
DevelopmentOfficer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
4
Strategic relevance Status
• The transformation, innovation and AI agenda
iscritical to the Group’s ability to deliver strong
returns and to compete in the new competitive
marketplace, where distortionary effects of
aviation support schemes may have allowed
competitors to accelerate their change agendas
and invest to improve capabilities and customer
propositions.
The Group has an established Transformation Programme Management
Office which has oversight of an agreed portfolio of initiatives across the
Group focused on improving customer service, revenue and cost efficiency
and the transformation mindset is becoming part of our culture. Many of the
programmes are multi-year and all are subject to the ongoing review and
investment approvals of the IAG Board. In the year, the Group established an
AI governance committee and guidance for data usage in respect to AI tools
and technology.
Risk description Mitigations
• Failure to transform the business to effectively
deliver cost efficiency initiatives, maintain or
grow share in the new competitive environment,
fully implement all programmes across the
Group and realise the benefits of the change
initiatives to deliver Group digital platforms
andcustomer propositions.
• The pace of change may expose the Group to
execution risk as multiple initiatives are delivered
across processes and systems that serve our
operations and customers.
• The impact on our people of the wide-ranging
change agenda if poorly managed or
uncoordinated could lead to logistical and
engagement challenges with the potential
tonegatively impact NPS, revenue and
efficiency benefits.
• Further standardisation, simplification and
efficiencies of the Group platforms are not
delivered.
• Competitors, or new entrants, may invest
andinnovate deploying digital technologies,
AI,sustainability initiatives and/or platforms
ahead of the Group.
• The levels of data capture, data storage and
security and availability of data, are not
sufficient and ready to exploit AIuse cases.
• The Chief Transformation and Corporate Development Officer has clear
oversight of all programmes across the Group’s businesses.
• Mirrored structures in the operating companies.
• Consistent core metrics and dashboard reporting used to assess
performance against plan.
• The IAG Management Committee has regular operating company-specific
meetings to assess their transformation agenda and the risks to delivery.
• The Group transformation agenda is subject to Board approval and progress
is regularly monitored by the Board.
• Group AI governance committee to assess AI initiatives to allow the Group
businesses to exploit AI capabilities.
• There is operating company-led communications to our employees
onchange initiatives and changes that may affect them.
• Consideration is given to the Group’s sustainability commitments
andagenda for all programmes.
• Any potential changes that could impact the brands are reviewed
tomitigate against reputational and brand damage.
Business and operational
Risk management and principal risk factors continued
60

12
Debt funding
Chief Financial Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• The Group’s ability to finance ongoing
operations, committed aircraft orders, future
fleet growth plans or acquisitions is vulnerable
to various factors including financial market
conditions, financial institutions’ appetite for
secured aircraft financing and the financial
market’s perceptions of the future resilience and
cash flows of the Group.
Access to the secured and unsecured debt markets may be disrupted by
geopolitical and economic uncertainty, impacting funding options and
interest rates available to the Group for new aircraft financing or where it
chooses to re-finance debt. Interest rate increases implemented by central
banks in 2023 to address inflation increase the cost for the Group of existing
floating rate debt, as well as for new financing. As at 31 December 2023
approximately 13% of the Group’s debt, including hedges, was floating rate as
the Group has paid down a substantial part of its floating debt in 2023. The
Group successfully raised financing for all aircraft deliveries it sought to
finance during 2023, using traditional long-term aircraft financing
arrangements. The Group’s credit rating with Standard & Poors was
upgraded to investment grade (BBB-) during the year, whilst its rating with
Moody’s was increased by onenotch to Ba1. In December, Fitch upgraded
British Airways to BB- investment grade.
Risk description Mitigations
• Failure to finance ongoing operations,
committed aircraft orders, future fleet growth
plans, business acquisitions and third-party
financial guarantees.
• New financial arrangements, in addition to
therepayment of existing arrangements, may
impact plans to transform the Group and will
influence the timing for IAG to resume paying
dividends to its shareholders.
• Higher interest rates in the market, or more
restrictive terms, for new finance arrangements
or re-financing may impact the Group’s cost
base.
• The IAG Board and Management Committee review the Group’s financial
position and financing strategy regularly.
• The Group has maintained its clear focus on managing liquidity and ensuring
that critical investment in the Group is maintained.
• During 2023, the Group extended the availability for $1,655 million of its
$1,755 million revolving credit facility by one year to March 2026.
• Maintain strong relationship with banks, lenders and lessors.
• Scenario planning for different financial environments.
• Continuous review of capital structure to minimise interest rate exposure
and lower cost of capital.
Financial risk including tax
See Financial review section
61

13
Financial and treasury-related risk
Chief Financial Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
Viability
scenarios2023 2022
1
Strategic relevance Status
• The volatility in the price of oil and petroleum
products can have a material impact on the
Group’s operating results.
• The volatility in currencies other than the
airlines’ local currencies can have a material
impact on the Group’s operating results,
particularly the US dollar.
• Higher interest rates can have a material impact
on the Group’s operating results.
• The Group is exposed to non-performance of
financial contracts that may result in financial
losses.
Fuel cost volatility driven by geo-political events has been partly mitigated
by the Group’s fuel hedging policy. Access to fuel hedging instruments or the
ability to pass increased fuel costs on to consumers could impact the
Group’s profits. The Group continues to assess the strength of the US dollar
against the euro and pound sterling and the potential impacts on the Group’s
operating results. All airlines hedge currency risk in line with the Group
hedging policy.
The approach to fuel risk management, financial risk management, interest
rate risk management, proportions of fixed and floating debt management
and financial counterparty credit risk management and the Group’s exposure
by geography continue to be assessed to ensure the Group responds to the
rapidly changing financial environment appropriately. Details are set out in
the Group financial statements.
Risk description Mitigations
• Failure to manage the volatility in the price of oil
and petroleum products.
• Failure to manage currency risk on revenue,
purchases, cash and borrowings in foreign
currencies other than the airlines’ local
currencies of euro and sterling.
• Failure to manage the impact of interest rate
changes on floating finance debt and floating
operating leases.
• Failure to manage the financial counterparties’
credit exposure arising from cash investments
and derivatives trading.
• The IAG Audit and Compliance Committee and IAG Management
Committee regularly review the Group’s fuel and currency positions and
other financial contracts.
• All airlines hedge in line with the Group’s hedging policy under the Group
Treasury oversight.
• Fuel price risk is partially hedged through the purchase of oil and oil
distillates derivatives inaccordance with the Group risk appetite.
• Currency risk is hedged through matching inflows and outflows and
managing the surplus or shortfall through foreign exchange derivatives.
• All airlines review routes to countries with exchange controls to monitor
delays in the repatriation of cash and/or with the risk of material local
currency devaluation.
• The impact of interest rate changes on floating debt positions is mitigated
through interest rate derivatives as well as structuring selected new debt
and lease deals at fixed rates throughout their term.
• The Group has a financial counterparty credit limit allocation by airline and
by type of exposure and monitors the financial and counterparty risk on
anongoing basis.
• The IAG Management Committee and the IAG Audit and Compliance
Committee regularly review the financial risks and the hedged amounts.
Anymaterial position outside policy limits has to be approved by the IAG
Audit and Compliance Committee.
Financial risk including tax
Risk management and principal risk factors continued
62

14
Tax
Chief Financial Officer
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• Payment of tax is a legal obligation. Changes
inthe tax regulatory environment, including
changes in tax rates, may result in additional tax
costs for the Group and in additional complexity
in complying with such changes.
• The Group’s tax strategy aims to balance the
needs of our key stakeholders, recognising that
tax is one of the Group’s positive contributions
to the economies and wider societies of the
countries in which IAG operates.
Tax is managed in accordance with the tax strategy, found in the Corporate
Policies section of the IAG website. The Group has a number of scheduled
tax audits, by local tax authorities, in progress across its businesses. In the
UK, there are ongoing discussions with HMRC on certain treatments of VAT.
Further information about taxes paid and collected by IAG is set out in note
10 of the Group financial statements.
Risk description Mitigations
• The Group is exposed to systemic tax risks
arising from either changes to tax legislation
andaccounting standards or challenges by tax
authorities on the interpretation or application
of tax legislation.
• Businesses and consumers may be subject
tohigher levels of taxation as governments seek
to increase environmental taxes, redesign the
global tax framework and rebuild public finance.
• The Group’s stakeholders’ expectations of the
tax behaviours of large corporates may lead
toreputational risk from the Group’s
managementof tax.
• The Group adheres to the tax policy approved by the IAG Board and is
committed to complying with all tax laws, to acting with integrity in all tax
matters and to working openly with tax authorities.
• Tax risk is managed by the operating companies in conjunction with the IAG
Tax function.
• Tax risk is overseen by the Board through the Audit and Compliance
Committee.
• The Group seeks to understand its stakeholders’ expectations on tax
matters, e.g. cooperative working with tax authorities and its interaction with
non-governmental organisations.
• The IAG Board annually reviews and approves the Tax Strategy.
• The Group takes expert advice on tax matters as required.
Financial risk including tax
63

15
Group governance structure
General Counsel
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• Airlines are subject to a significant degree of
regulatory control. In order for air carriers to
hold EU operating licences, an EU airline must
be majority-owned and effectively controlled by
EU nationals. British Airways is a UK carrier and
not subject to the same requirement.
The aviation industry continues to operate under a range of nationality
andother restrictions, some of which are relevant to market access under
applicable bi-lateral and multi-lateral air service agreements, while some
arerelevant to eligibility for applicable operating licences. The Group will
continue to encourage stakeholders to normalise ownership of airlines in line
with other business sectors.
Risk description Mitigations
• IAG could face a challenge to its ownership and
control structure.
• The Group has governance structures in place that include nationality
structures to protect Aer Lingus’, British Airways’ and Iberia’s operating
licences and/or route rights. These have been approved by the relevant
national regulators.
• IAG will continue to monitor regulatory developments affecting the
ownership and control of airlines in the UK and EU.
See Corporate Governance section
16
Non-compliance with key
regulation and laws
General Counsel
Stakeholder
impact
Strategic
imperatives
Risk trend
2023 2022
Strategic relevance Status
• Carrying out business in a compliant manner
and with integrity is fundamental to the values
of the Group, as well as the expectations of the
Group’s customers and stakeholders.
The Group has maintained its focus on compliance with key regulations and
mandatory training programmes have continued throughout the year. For
safety- and security-related regulatory risks, please refer to the ‘Safety or
security incident’ risk.
Risk description Mitigations
• The Group is exposed to the risk of an individual
employee’s or groups of employees’
inappropriate and/or unethical behaviour
resulting in reputational damage, fines or losses
to the Group.
• Failure to meet legal or regulatory standards
may result in breach with the potential to hurt or
impact ourcustomers, employees, or third
parties, or impact our operations, and lead to
reputational damage, fines or losses to the
Group.
• The Group has clear frameworks in place including comprehensive Group-
wide policies designed to ensure compliance, monitored by the IAG Audit
and Compliance Committee.
• There are mandatory training programmes in place to educate employees
as required for their roles in these matters.
• Compliance, human resources and legal professionals specialising in
competition law, anti-bribery and other legislation and regulations that apply
to the Group businesses support and advise the Group’s businesses.
• IAG’s Code of Conduct is supported by annual awareness programmes
andmandatory training, with additional focus for higher-risk areas.
• Compliance Officers and Data Protection Officers are in place in all
operating companies.
• Speak up and whistleblowing channels are available across the
Group’sbusinesses.
Compliance and regulatory
Risk management and principal risk factors continued
64

Viability assessment
Longer-term trends
and risk considerations
Risk assessment across
the timeline of the plan
Viability scenario process
The directors have assessed industry,
Group-specific and non sector-specific
longer-term trends over a timeframe
beyond the plan period, such as climate
change regulation, infrastructure proposals
at hubs, availability and timing of
technologies in fleet, move to and
exploitation ofthe cloud, AI and disruptive
innovation tools. These trends may require
the business to consider strategic
responses, business model adaptions and
new skillsets ahead of any potential impact
to the Group plan.
Other considerations include:
• economic trends and shifts in the relative
strengths of global economies including
rise of emerging markets and hubs,
market shifts and interconnectivity
including partnerships and alliances, the
competitive landscape and changes in
customer mix or sentiment to travel;
• supply chains and proximity and
reliability of supply, inflationary,
resource and availability pressures on
key suppliers;
• costs of compliance to environmental
and climate change regulations and/or
lack of availability of infrastructure
within countries to meet commitments
or government mandates;
• increasing regulatory burdens,
asymmetry in policy and/or government
intervention impacting aviation and the
Group’s business model;
• areas of risk or opportunity for the
Group, such as workforce availability,
migration, war for talent, impact of
AIon business and skillsets, outcomes
of mis- and dis-information, diversity
and inclusion ambitions, hybrid ways
ofworking and different career
expectations from new joiners into
workforces and the aviation industry;
• structural changes in how
customerstravel;
• the potential macroeconomic
consequences of interest rates and
inflation especially where there are
labour shortages in key markets or
ashortage of technical specialists;
• the potential longer-term impacts
ofBrexit and the UK’s divergence from
EU policy and laws;
• the Group’s resilience to future events
impacting aviation or global markets,
financial markets, interest rates and
exchange rates, particularly the US
dollar; and
• stakeholder expectations over
commitment to acting with integrity
toprotect our planet, particularly
climate change and carbon impacts.
The directors have assessed key threats
and trends faced by the industry,
emerging risks and opportunities, as well
as other industry and Group-specific
risks that could impact the Group’s
business plan:
• these are considered in light of their
impact on our business model and
relevance, operations, customers and
financial status and include changes in
regulations, customer trends and
behaviours, macroeconomic
predictions on growth, regional
market opportunities, technology
trends, environmental implications and
infrastructure developments that
could impact our operations, as well
as more existential threats to aviation;
• when developing the Group’s three-
year business plan, longer-term
considerations have been assessed by
the IAG Management Committee and
the Board in conjunction with the
priorities of and risks faced by the
business; and
• the Board has also conducted its
annual strategy session in addition
toregular performance and strategy
delivery progress reviews during the
year. Following this process, short-,
medium- and longer-term priorities,
challenges and opportunities have
been identified and actions agreed.
When considering the viability of the
Group, for the purposes of this report,
the directors have evaluated the risk
landscape facing the Group and
recommended plausible but severe
downside scenarios that could impact
the Group’s three-year plan to determine
the Group’s resilience to such impacts.
The results of these scenarios on the
plan have been presented both pre
andpost an assessment of the likely
effectiveness of the mitigations that
management reasonably believes would
be available over this period (and not
already reflected in the plan).
The directors have assessed key threats
and trends, and emerging risks and
opportunities, to determine plausible
but severe downside scenarios that
could impact the Group’s three-year
business plan.
65

Viability scenario includes
sustainability-related stress
No. Title
Link to
principal risks
1 Downside case
This scenario configures a blend of commercial and operational adverse impacts which would result in capacity
reductions, in addition to an increase in fuel prices, over and above the Group’s business plan assumptions.
Economic considerations include a combination of events reducing capacity up to a maximum of 25%,
increasing fuel prices up to 20%, reducing passenger unit revenue and increased operational costs.
The Downside case assumes that British Airways would be required to draw down, in full, its portion of the
available US dollar Revolving Credit Facility. The Downside case also builds in a downside impact in Air Europa
Holdings, which the Group plans to acquire in the plan period, subject to regulatory approval.
The period to June 2025 of this Downside case has also been applied as the Downside case in the going
concern analysis (see note 2 of the Group financial statements).
2, 3, 4,
8, 12, 13
2 Operational resilience challenges
Lost revenue within some IAG airlines from pre-emptive flight cancellations in response to resourcing
challenges with resultant reputational impact.
Ongoing challenges in the global supply chain, particularly engine availability, reliability and performance leads
toan increase in grounded aircraft awaiting maintenance with further capacity reductions also impacting
revenues. Revenues from the Group’s maintenance business also impacted by the lack of available spare parts.
Further revenue impact considered from reduced capacity as a result of airport capacity and air traffic control
airspace restrictions.
Revenue impact from schedule disruption due to extreme weather events also considered within the scenario.
1, 4, 5,
8, 9
3 Cybersecurity and IT infrastructure
A stress to model the impact of a ransomware attack on an IAG airline. The scenario assumes a disruption
period of five days resulting from the attack before full connectivity is restored, impacting customers and
operations of the affected airline. It also assumes lost revenue due to disruption of operations at the affected
airline with knock-on impacts to other IAG airlines due to the need to isolate and switch off connectivity of
Group shared credentials platforms. There are also further lost revenues due to reputational impact and
increased EU 261 and other customer goodwill costs. Associated costs of recovery from the incident include
the disruption through the investigation period including increased IT costs as well as brand impacts, and the
potential for regulatory scrutiny and fines.
In addition, the scenario considers an unplanned outage owing to data centre migration activity resulting in
short notice flight cancellations causing further lost revenue and increased EU 261 and other customer goodwill
costs.
1, 6, 7, 8
4 Sustainability and business transformation
An increasing revenue stress on short-haul operations across the Group to reflect changes in customer
behaviours towards short-haul travel where other travel options exist.
Increased carbon costs and sustainable fuel costs to meet mandates and where supply cannot be secured. Revenues
in key markets below plan expectations also modelled to reflect a potential long-term change in mix and travel
behaviours.
Potential for lost revenue impact arising from delays in delivering and realising the benefits of business
transformation initiatives and increased costs of securing required resourcing levels.
Longer-term consideration of the impacts of climate change and carbon and regulatory initiatives to address
this within the aviation sector, such as the implementation of new regulatory policy, carbon costs and the cost
and availability of Sustainable Aviation Fuel are also subject to assessment and modelling by the Group in
addition tothe viability scenario assessments.
1, 4, 11
The scenarios have been defined
bymanagement and designed
toconsider principal risks (or
combinations of risks) that could
materialise over the viability period and
weaken the Group’s liquidity position,
and therefore its financial sustainability.
Each scenario is regarded as severe but
also plausible and has considered the
impact onliquidity, solvency and the
ability toraise financing in an uncertain
andvolatile environment.
Management has also assessed
mitigations that are available to the
business beyond operating cost
reductions including further financing,
capital expenditure plans and potential
disposals. Options are presented, as
appropriate, for the Board to assess. In
reviewing and approving the scenarios,
the Board considered, amongst other
matters, the availability and sufficiency
of potential mitigations, the expected
speed of implementation in response to
the uncertainty and the future flexibility
required for the Group to adapt further
as needed.
Sensitivities in the scenarios’
assumptions have been highlighted by
management and challenged by the
Board. In addition, the Board reviewed
the results of revenue and margin
reverse stress tests, which demonstrated
the level of sustained passenger revenue
decline, and, separately, margin decline
before mitigations, that would resultin
the Group using all available liquidity
(including cash and currently available
undrawn credit facilities) andcompared
this to the outputs from the scenarios.
Scenarios modelled
Risk management and principal risk factors continued
66

Viability statement
The directors have assessed the viability
of the Group over three years to
December 2026. They have considered
the global macroeconomic environment
and geopolitical uncertainty, the health
of the aviation industry and its supply
chain, the assumptions of the plan, the
strategy of the Group and the Board’s
risk appetite. Although the prospects of
the Group are considered over a longer
period, the directors have determined
that a three-year period is an
appropriate timeframe for assessment
as it is aligned with the Group’s strategic
planning period (as reflected in the
plan), and as the external uncertainties
facing the aviation sector continue to be
significant and many are beyond the
Group’s ability to influence directly.
The Board recognises the pace of
change required within the Group to
further adapt, build appropriate
resilience and respond tothis
environment, in addition to the rapidly
changing competitive landscape and
wider global macroeconomic conditions.
The Group has reviewed the modelling
of the impact of mitigating actions to
offset further deterioration in demand
and capacity, including reductions in
operating expenditure and capital
expenditure. The Group expects to be
able to continue to secure financing for
future aircraft deliveries and in addition
has further potential mitigating actions
itwould pursue in the event of adverse
liquidity experience.
Further details on debt financing can be
found in the going concern disclosures
in note 2 of the Group financial
statements.
Based on this assessment, the directors
have a reasonable expectation that the
Group will be able to continue in
operation, meet its liabilities as they fall
due and raise financing as required over
the period to December 2026. However,
this is subject to a number of significant
factors that are outside the control
ofthe Group. In reaching this
assessment the directors have made
assumptions when considering both the
plan and the Downside case (the most
severe and plausible of the viability
scenarios considered):
• the Group will continue to have access
to funding options and that the capital
markets retain a level of stability
andappetite for funding within the
aviation sector;
• the Group can implement any further
structural changes required in
agreement with any union
consultation processes and regulatory
approvals;
• any future pandemic or other public
health-related restrictions do not
result in further prolonged and
substantial capacity reductions and
groundings as governments do not
have the appetite for the economic
impact and stress that it would place
on their respective economies and
populations;
• any new virus strain or threat to public
health that emerges during the
viability period can be managed within
existing health and testing regimes
without recourse to government
regulations that significantly affect
ourairlines’ operations; and
• geopolitical events do not result
insignificant war zones impacting
financial markets, airspace operations
and connectivity flows across our
flight schedules.
67

Engagement context
The strong recovery in demand for
travel during 2023 was accompanied by
the usual close scrutiny by regulators
and policy-makers with additional
challenges created by the geopolitical
background. Political dynamics in Spain
and forthcoming elections in the UK and
for the European Parliament mean that
policymakers have tended to focus on
shorter-term priorities which is a
challenge for an industry with long
investment cycles.
With this overall context, IAG continued
to engage with policymakers in the
institutions of the European Union and in
the countries in which its operating
airlines are based or serve, to promote
the economic and social benefits of
aviation and explain the impacts of
policy proposals on our business. We
continue to encourage aviation
regulators to adopt measured policies
that recognise the competitive nature
ofinternational aviation (including
proposals to amend airport slot
allocation rules in the EU or the UK)
andto promote a greater balance of
therisk and reward in the regulation
ofmonopoly airports and Air Navigation
Service Providers (ANSPs), given
thesignificant cost to airlines of
theirservices.
In addition to direct engagement
withpolicymakers, IAG worked through
tradeassociations, notably Airlines
4Europe (A4E) and the International
AirTransport Association (IATA), as
wellasnational industry and business
associations, to put its case to
governments and institutions such
asthe International Civil Aviation
Organisation (ICAO) on issues of
importance to the Group and its
customers, especially in sustainability.
Geopolitical instability
The far-reaching impacts of the Russian
invasion of Ukraine in 2022 on the world
also had immediate practical effects on
airlines by preventing European and UK
airlines from operating through Russian
airspace, a situation which, along with
the war, endured throughout 2023. IAG’s
operating companies adapted by
routing aircraft to and from Asia away
from Russian airspace with the resultant
increase in flying time driving more
complex planning and a need for
additional crew.
At various times in 2023, military coups
and other conflicts in West Africa and
the Sahel region resulted in further
temporary restrictions to airspace.
Although the risks to smooth operations
from such events can usually be
managed and are isolated in their
geographical impact, they also
exacerbate industry-wide challenges.
A further impact of the war in Ukraine
was seen in 2023 with the extension of
sanctions on Russia by the EU and the
UK to prohibit, from the end of
September, the import of Russian iron
and steel products processed in a third
country. The additional requirements to
scrutinise the origins of steel and the
location of manufacture have slowed
procurement of aircraft parts adding
topressure on the global supply chain.
Engagement for the
benefit of our industry
The conflict in Israel from 7 October
andthe subsequent escalation of
military action in Israel and Gaza meant
that IAG’s airlines ceased operations to
Israel. There are immediate commercial
impacts of being unable to operate to
the country and further signs of impact
on markets in the immediate conflict
area. We continue to monitor the wider
economic impacts on the world
economy of this and other conflicts.
The global supply chain has not yet
returned to normal from the disruption
caused by the COVID-19 pandemic,
having the practical effect of putting
pressure on maintenance and
engineering resources affecting fleet
availability. Both Airbus and Boeing have
seen delivery schedules for new aircraft
slip behind their original plan and the
distribution of replacement parts
continues to take longer than it did in
2019, increasing maintenance times for
many airlines. The problems that
emerged during the year for airlines
operating Airbus aircraft with the Pratt
&Whitney PW1100G ‘GTF’ engines
meant significant additional numbers
ofaircraft in the global airline fleet
required additional maintenance at the
end of 2023. While the impacts for IAG’s
own aircraft are limited and manageable,
the pressure on maintenance facilities
increased during 2023 since other
airlines took up capacity to solve this
issue and will continue to do so in the
coming years. IAG engaged with
regulators to explain the potential
difficulties for customers that this
pressure could cause.
Sustainability
Much of IAG’s advocacy and
engagement in 2023 was concerned
with the issue of sustainability. IAG
continues to play a leading role in
developing industry plans for reaching
net zero carbon emissions and the
Group’s strategic approach and practical
actions to reaching our targets
areexplained in detail in the
Sustainabilitysection.
“IAG continues to play a
leading role in developing
industry plans for
reaching net zero carbon
emissions.”
Regulatory environment
68

In our ongoing activities to explain our
position, the Group and its operating
airlines continued to engage with
representatives of the institutions of
theEU and the governments of Spain,
Ireland and the UK. We have long
advocated the development of
Sustainable Aviation Fuels (SAF) which
reduces lifecycle CO
2
emissions by 80%
as the solution, not just to the near-term
need to drive down industry emissions,
complementing the deployment of
moreefficient aircraft, but also to enable
sustainable long-haul aviation alongside
the development of carbon capture
technology and future generation e-fuels.
In Europe, high-level engagement
continued on the most relevant of
theEU’s Fit for 55 policies including
theaviation SAF blending mandate
(ReFuelEU aviation) and the revision
ofthe Emissions Trading System (ETS)
Directive for Aviation. IAG welcomed
theEU’s commitment of 20 million
freeSAF allowances to encourage SAF
uptake between 2024 and 2030 and the
increase to the ETS innovation fund
budget to help deploy net zero
andinnovative technologies. In 2023,
aviation was also included in the
EUTaxonomy as one of the sectors
thathas the potential to contribute
significantly to climate change mitigation.
While the Group continues to support
the principles and approach of the EU’s
Green Deal we maintained our
opposition, aligned with other airlines,
tothe proposed removal of the jet
fueltax exemption since it will reduce
the sector’s ability to invest in more
effective measures and to enable
acompetitive European aviation sector.
IAG’s technical experts and senior
executives engaged with relevant
officials at the European Commission,
the Representations of Member
StatesinBrussels as well as Members
oftheEuropean Parliament, and with
complementary contacts with the
relevant authorities in the respective
EUhubs, in Madrid, Dublin and Barcelona.
In the UK, IAG engaged with cabinet
ministers and officials at all levels
toencourage support for a UK SAF
industry that can provide thousands
ofnew jobs and see plants built in the
regions of the UK. IAG advocates the
use of free allowances from future
revenues that airlines will pay into the
UK ETS (mirroring the EU approach),
tosupport the purchase of advanced
SAF and encourage SAF production
asseen in the US and Europe. We look
forward to providing input to the
UK’sconsultation on a price support
mechanism for SAF production
whichisan essential requirement
tosecuringinvestment.
Aviation policy issues
Potential changes considered by the
EUand the UK to the global system
used to allocate takeoff and landing
slots at congested airports were
animportant focus of government
engagement throughout 2023.
IAG supports the use of the Worldwide
Airport Slots Guidelines (WASG) system,
formulated by IATA, since it provides
astable, internationally accepted system
(reflected in the relevant EU Slot
Regulation and UK laws) that
encourages competition but also
supports reliable, established networks.
In 2023, the EU considered but halted
changes to this system and the UK
announced that it would consult on
potential new approaches during 2024.
We note that no system of allocation
can solve the problem of a lack of
capacity, and these should not be
conflated. We therefore continue to
impress on policymakers the benefits
ofa global system that supports new
market entrants and allows network
airlines to plan their complex schedules
in advance so that they can offer
customers a wide range of destinations
and connections while also managing
operational disruption effectively.
69

Some alleviations from the elements of
slot rules that require airlines to operate
any one slot 80% of the time to retain
itin the following year have remained
inplace around the world during 2023.
IAG welcomed such alleviations as they
recognise the continuing uncertainty
that global supply chain issues and
short-term uncertainty in demand in
individual markets have caused. As we
have seen in the Middle East, in the last
quarter of 2023 there are continued
pressures on airlines which are often
prevented from operating individual
flights. We continue to advocate a
pragmatic approach by airport slot
coordinators to recognise the reality of
factors outside airlines’ control and that
justify retaining slots forthe longer-term
benefit of airlines and their customers.
Since around one third of flights
inEurope operate through French
airspace, the very frequent strikes
byairtraffic controllers in France put
further pressure on operations. IAG
continues tomake representations with
other airlines and A4E, to encourage
EUand French government action to
allow freemovement of traffic flying
over France during industrial action,
apolicy alreadyadopted by several
other EUMemberStates.
Aviation regulators’ concern for the
consumer interest is understandable
following the disruption of 2022 and
inthe light of external factors, and there
were related developments in different
jurisdictions for IAG’s operating airlines.
In the EU, national authorities responded
to the industry recovery and high
consumer demand in different ways,
ranging from proposals to cap airfares
inone EU Member State, to proposals
toestablish minimum fares in another.
IAG engaged with policymakers
toexplain the benefits to consumers
ofthechoice available to them in the
competitive aviation market in the EU.
In the UK, IAG engaged with the Civil
Aviation Authority (CAA) on plans to
introduce an accessibility framework
forairlines, to mirror its existing system
that grades airports on the quality of
their provision of wheelchairs. IAG’s
operating airlines encourage support
forpassengers with additional needs
and believe that cross-industry
engagement and communication to
improve customer service will have
better results for passengers affected
than regulation. The UK also consulted
on potential rules to restrict ‘drip pricing’
during online sales to ensure customers
have all the relevant information at the
appropriate point of purchase. Canada
also introduced new requirements for
airlines to set out their accessibility
policies and consulted on proposals
toincrease passenger protection.
Similarly, the US published notices
ofproposed rulemaking in several
areasincluding to improve the provision
ofrefunds to customers. At the end
of2023, the European Commission
presented a proposal on multimodal
passenger rights with a focus on
passenger rights for access to tickets
covering different transport modes.
IAG responded to relevant consultations
and engaged directly and through our
trade associations to inform regulators,
propose balanced regulation and avoid
introducing additional rules that hamper
the competitiveness of the industry.
TheSpanish Presidency of the EU
in2023 gave an additional opportunity
toengage in Madrid and Brussels.
Economic regulation of monopoly
infrastructure
Aviation infrastructure and price
regulation was another area of focus
in2023. In Ireland, the DAA appealed
against the Irish Aviation Authority’s
December 2022 decision on the
maximum level of airport charges at
Dublin Airport for the period 2023-2026.
This decision, which takes account of the
impact that the COVID-19 pandemic had
onthe aviation industry, also provides
for acapital investment allowance of
approximately €3 billion. IAG was
broadly supportive of the IAA’s final
determination of charges and has joined
the appeal proceedings as a notice party.
In Spain, IATA and Spanish airline
association ALA opposed AENA’s
proposal to increase charges for 2024
that would break the cap in the airport
regulation document (DORA II) that
setsAENA’s airport charges scheme
for2022-2026. IAG broadly supports
theassociations’ objections.
In October, the UK Competition and
Markets Authority confirmed through
itsconsideration of airline and airport
appeals that it was essentially satisfied
with the CAA’s economic review of
London Heathrow airport’s charges.
Itispositive that charges in 2024 will be
lower in nominal terms than in 2023 and
then essentially flat for the remainder of
the regulatory period to 2026. However,
the very significant increase permitted
in2022 and 2023 (despite not allowing
most of the London Heathrow airport
“IAG maintained close
engagement with
regulators in key markets
around the world to
ensure positive relations
and to ensure the
benefits of its operations
are understood.”
Regulatory environment continued
70

torecoup revenues not earned due to
thepandemic) means that London
Heathrow airport’s charges remain
among the highest in the world and
arenot competitive. IAG seeks to work
with the CAA and the Department
forTransport to improve the regulatory
framework for the future.
The importance of aviation infrastructure
to airlines and their customers was
highlighted by the failure of the UK’s
National Air Traffic Services (NATS)
on28 August due to a software failure.
Although services recovered on the
same day, an almost complete outage
ofservice for several hours resulted
inconsiderable cost to IAG’s operating
airlines, not only in managing the outage
but also providing customers with the
necessary duty of care, accommodation,
communication and travel costs. IAG’s
airlines recognise the need to look after
their customers in this way but
encourage the reform of consumer
regulation EU261 and the UK equivalent
to recognise that ANSPs and airports
should equally be responsible for the
costs incurred where their actions are
the cause of delays and cancellations.
This unfortunate NATS incident came
during the regulator’s consideration
ofits regulatory price review, the results
of which see a 25% increase in average
unit rate in nominal terms compared
with 2022. This increase is driven by the
fact that the regulatory system includes
a traffic risk-sharing system that
effectively allows NATS to recover
thelost revenue from the pandemic.
Thedecision does however include
reductions in NATS En Route Limited’s
underlying cost base through to 2027
and provides a balance of efficiency
andeffective service provision.
Through A4E, IAG also engaged
indiscussions with the European
Commission’s Performance Review
Body, aiming to encourage improved
efficiency, better value for money and
enhanced operational performance
fromANSPs in Europe. IAG supports
theimplementation of the Single
European Sky to deliver environmental
and economic benefits over the
longerterm.
International relations
IAG maintained close engagement
withregulators in key markets around
the world to ensure positive relations
and to ensure the benefits of its
operations are understood. This includes
monitoring developments in
international air service agreements
andcontributing to government talks,
where appropriate, between the states
in which IAG’s operating airlines are
based and states representing important
markets around the world.
For example, in November this included
attending the special meeting of the
EU-US Joint Committee on air transport
that explored the US’ complaint
againstthe EU relating to the reduction
incapacity imposed at Amsterdam
Schiphol airport. Along with other
airlines, IAG contends that any such
questions of capacity should be resolved
with reference to the ICAO Balanced
Approach that considers the benefits
and negative aspects of aviation activity
fairly. We welcomed the Government
ofthe Netherlands’ decision in October
to halt its plans and continue to
advocate the continued use of all
available capacity at Amsterdam
Schiphol airport and to address
environmental concerns through
othermeasures.
71

Additional disclosures
Table of contents
Section Subsections
A.1.3a.-3.b. Planet – climate change Scope 1 and 2 emissions and commentary, Scope 3 emissions and commentary
A.2.a.-2.4. Planet – wider issues Noise definitions, waste definitions, biodiversity, water
B.2.a-2.d. People
Key workforce metrics, employment and working organisation, workforce turnover,
other social and employee-related matters and metrics
B.8.1.-8.3. Remuneration and salary gap
Average remuneration by gender/age/job category, Board and Management
Committee remuneration
B.9.1.-9.5. Prosperity
Impact of Company on local employment and development, consumer relationship
management, public subsidies received, accounting profit/loss before tax, income
taxpaid
C.8. Governance
Description of EU Taxonomy and 2023 related activities: methodology/data gathering,
eligible activities, KPI – revenues, KPI – OPEX, KPI – CAPEX
D. Table of contents References to GRI standards and pages
72

Additional disclosures continued
See Sections A.1. and A.2. for 2023 metrics and five-year trends.
A.1.3a. Scope 1 and 2 emissions
Relevant standards: GRI 301-1, 302-1, 303-3, 305-3/4/5
Commentary on key climate change metrics
Footprint
metric Description Commentary on 2023 trends
Scope 1
emissions
(gross)
Direct emissions associated with IAG’s operations including
use of jet fuel, diesel, petrol, natural gas and halon. Sources
of emissions include aircraft engines, boilers, auxiliary
power units and ground vehicle engines.
Gross emissions includes reductions from Sustainable
Aviation Fuel (SAF), in line with globally recognised
accounting standards.
SAF emission reductions are calculated using the volume
of SAF uplifted, multiplied by the Life-Cycle Assessment
(LCA) carbon saving of the fuel, relative to conventional
jetkerosene, and subtracted from our jet fuel emissions.
2023 Scope 1 emissions increased to 25.7 million tonnes (MT),
an increase of 22% y-o-y. This was driven by increased flying
demand, which increased jet fuel consumption by 22% y-o-y.
Emissions saved from SAF use increased to 157.1 KT CO
2
in2023, an increase of 415% y-o-y and representing 0.6%
ofemission reductions.
Scope 2
emissions
Indirect emissions associated with electricity use in
ground facilities like offices, lounges, data centres and
hangars. Market-based emissions are based on the carbon
intensity of electricity purchased from suppliers. Location-
based emissions are based on the carbon intensity of
national electricity grids.
CO
2
e is calculated using gCO
2
e/kWh factors from
national agencies in Ireland, Spain and the UK, and IEA
national electricity emissions factors.
2023 market-based emissions increased to 12.4 KT due to
increased business activity. Location-based emissions
increased to 56.5 KT.
81% of our electricity use in 2023 was from renewable
sources (see ‘Renewable Electricity’ below)
Where electricity data from overseas offices was not available,
kWh was calculated based on leased space in m
2
, multiplied by
relevant kWh/m
2
factors based on historical data.
Scope 3
emissions
Indirect emissions associated with products the Group
buys and sells. 12 out of 15 Scope 3 categories, as defined
by the GHG Protocol, are assessed to be relevant.
IAG continues to review Scope 3 emissions calculations
inline with the latest approaches and data. Please refer
tothe description of Scope 3 emission metrics in this
sectionfor more details.
Scope 3 emissions increased to 6.5 MT due to increased
business activity. Scope 3 category 3 (Fuel and energy-related
activities) account for the greatest share of Scope 3 emissions
(83%), and increased from 4.4 MT to 5.4 MT in 2023.
We have captured emissions under Scope 3 category 1 through
two separate methodologies in 2023. Existing reporting
practices report a decrease in emissions from 268 tonnes
reported in 2022 to 204 tonnes in 2023.
Following a trial by IAG GBS with Watershed, our 2023
scope 3 category 1 emissions are calculated as 2.77 MT.
Wecontinue torefine ourapproach across other Scope 3
categories. Please refer toSection A.1.3b. for more details.
Progress
metric Description Commentary on 2023 trends
Flight-only
carbon
intensity
Grammes of CO
2
per passenger kilometre (gCO
2
/pkm)
isa standard industry measure of flight fuel efficiency.
Itiscalculated by dividing total jet fuel use by total
passenger-km, assuming one cargo-tonne-km is
equivalent to 10 passenger-km – then multiplying this
value by a conversion factor of 3.15.
This calculation excludes the jet fuel used by franchises,
cargo carried on other airlines and engine testing. It excludes
no-show passengers, in line with industry guidance.
The improvement to 80.5 gCO
2
/pkm, a 3.6% reduction y-o-y,
is driven by a recovery in passenger load factors, operational
efficiency initiatives and the use of SAF. This represents an
improvement of more than 10% since 2019. The Group is on
track to exceed its 2025 target of 80 gCO
2
/pkm.
The passenger-km value used in the 2023 calculation is
273,607 million and the cargo-tonne-km value is
4,386 million.
Scope 1
emissions
(net)
Net emissions are calculated based on gross emissions
less any carbon savings from EU, Swiss and UK Emissions
Trading Schemes (ETS) compliance obligations, volumes
of offsets purchased to meet Carbon Offsetting and
Reduction Scheme for International Aviation (CORSIA)
compliance obligations, and volumes of offsets voluntarily
purchased by IAG.
EU ETS allowances purchased from other sectors equate
to a net reduction, aligned to European Commission
guidance. IAG has been disclosing net emissions since
2017 using this methodology.
Scope 1 net emissions in 2023 were 22.8 MT. The Group is on
track to deliver the 2030 target of 22 MT (a 20% reduction
versus 2019), based on the roadmap in Section A.1.2.
2023 net emissions were reduced by 2.6 MT due to
participation in ETS schemes, and 246 KT was offset by
British Airways towards offsetting domestic flights plus the
Group offsetting staff and duty travel. A further 3.3 KT was
offset voluntarily under customer offsetting programmes
offered by Group airlines.
Net emissions reductions will be achieved via use of eligible
CORSIA credits when global international emissions rise
above the baseline agreed at the International Civil Aviation
Organisation (ICAO) General Assembly. This is expected
tobe from 2024.
A. Planet – Climate change
73

Progress
metric Description Commentary on 2023 trends
Renewable
electricity
The share of electricity generated by renewable
sourcessuch as solar power and wind, based on
volumesprocured from renewable electricity suppliers.
Inoverseas offices where data on electricity sources
wasunavailable, the source of electricity is assumed
tobethe national grid.
This percentage includes electricity use from facilities
partially outside IAG’s operational control.
Renewable electricity in 2023 remained at 81% due to the
lack of new available renewable electricity supply at relevant
airport facilities and leased overseas offices.
Description of and commentary on additional climate change metrics
Metric Unit Description Commentary on 2023 trends
Carbon
intensity
(Scope 2)
gCO
2
/
pkm
Based on Scope 2 location-based emissions divided
by business activity, as measured in revenue
passenger-km, including cargo. Complements the
flight-only emissions intensity metric.
2023 efficiency improved to 0.18 gCO
2
/pkm,
from 0.20 gCO
2
/pkm in 2022, as passenger load
factors returned to normal levels following the
COVID-19 pandemic.
GHG reduction
initiatives
’000
tonnes
CO
2
e
Reductions in CO
2
e as a result of specific efficiency
initiatives which started in the reporting year. This
excludes reductions from externally driven changes
applicable to all airlines, such as airspace changes.
The 5% annual increase to 86.7 KT is due to the
Group delivering efficiency initiatives across the
full flight phase including take-off, cruise,
approach and landing and engine washes.
Electricity kWh Consumption of electricity across IAG ground facilities,
in millions of kWh. This includes usage in main offices,
overseas offices, hub airports and maintenance
facilities. A detailed description of the Scope 2
emissions calculation is on the previous page.
Electricity consumption rose to 216,968,602
kWh in 2023, a rise of 1% y-o-y as normal levels
of occupancy in ground facilities and offices
return following the COVID-19 pandemic. 81%
ofthe Group’s electricity usage is derived from
renewable sources, predominantly renewable
electricity.
Energy kWh The sum of the above kWh and energy use from
fuel. Fuel energy use is based on volumes of jet fuel,
diesel, petrol, natural gas and gasoil, multiplied
bythe latest available UK Government
conversionfactors.
UK factors are used across the Group as these
areconsidered the most robust available.
Energy consumption rose to 85% of 2019 levels
in 2023. This is an increase of 24% year on
yeardue to increased flying activity. Jet fuel
isover 98% of MWh as limited volumes of SAF
are available.
Revenue per
tonne CO
2
e
€/tonne
CO
2
e
Calculated by dividing total Group revenue by the
sum of Scope 1 emissions and Scope 2 location-
based emissions.
The 2023 value improved to €1,145/tonne CO
2
e,
an increase of 5% year-on-year, and 38% above
pre-pandemic levels.
CO
2
per
Revenue tonne
kilometre
gCO
2
e/
RTK
The total number of revenue generating tonnes of
both passengers and freight multiplied by the
distance flown.
Grammes of CO
2
per revenue tonne kilometre
(gCO
2
e/RTK) is an activity statistics indicator
commonly used by the aviation industry and third
parties including the EU Commission and Transition
Pathway Initiative (TPI). This metric represents the
distance flown and weight transported associated
with the revenue passengers of a flight.
For the distance flown, the great circle distance is
used and for the weight, the mass and balance
documentation of the flight which according to the
policy of each airline can use a default value of
100kg, which represents the weight of the passenger
plus the hand luggage, or different value approved
by the competent authorities.
The 2023 value was 805 gCO
2
e/RTK, a
reduction of 4% y-o-y. This is consistent with
improvements observed in flight-only carbon
intensity, driven by a recovery in passenger
loadfactors, operational efficiency initiatives
and the use of SAF.
Jet fuel use tonnes Jet fuel used within the aircraft fleet and for engine
testing during the reporting year.
The 22% year-on-year increase in jet fuel use,
to8.1 MT, is due to the recovery in flying
demand. Jet fuel is 16% below 2019 levels.
Fleet age years The average age of aircraft in the IAG fleet as of
31 December, 2023.
The average age of operational aircraft increases
each year. This is offset by the impact of new
deliveries and retirements.
Average fleet age increased from 11.9 to 12.0 years.
74

Additional disclosures continued
A.1.3b. Scope 3 emissions
In 2021 IAG was the first airline group worldwide to target net zero Scope 3 emissions by 2050. This was complemented by a target
of a 20 per cent reduction in net Scope 3 emissions by 2030, compared to a 2019 baseline.
These targets will be delivered in collaboration with suppliers and other stakeholders, by monitoring supplier sustainability
performance, engaging with suppliers on their sustainability plans, embedding climate requirements into supplier contract clauses
and product specifications, and accounting for delivery of existing supplier targets. IAG is on track to meet the 2030 target.
IAG has assessed all 15 categories of Scope 3 emissions, as defined by the global GHG Protocol, and identified 12 relevant categories.
The Group has over 15,000 suppliers and the scope of emissions calculations within these categories is based on material categories
of spend – the two most material categories being jet fuel and aircraft spend, reported under Category 3 and 2 respectively. Four
categories represent over 90 per cent of IAG’s assessed Scope 3 impact.
IAG continues to refine Scope 3 calculations based on the latest data and assumptions. In 2023, IAG GBS ran a trial with Watershed
to improve reporting of Scope 3, category 1 emissions. In previous measurements, IAG has reported on Scope 3.1 emissions based
onwater usage only. The methodology with Watershed recalculated Scope 3.1 emissions using a spend-based approach and
detailed analysis of emissions from IAG’s supply chain. Data from this trial is presented in the table below, compared to emission
values from our previous methodology.
Standardised conversion factors are used where data from suppliers is not available, and as more data from suppliers becomes
available, some values may be restated. Any significant restatements will be provided in future reports with explanations provided.
Total Scope 3 emissions in 2023 are 6,526,467 tonnes CO
2
e, versus 5,495,408 tonnes CO
2
e in 2022.
Scope 3 category in tonnes CO
2
e
1
Method
2
versus
last year
versus
2019 2023 2022 2021 2020 2019
Category 3: Fuel and energy-related
production
Fuel-based/
averagedata
23% (15)% 5,424,914 4,399,985* 2,266,587 2,284,992 6,371,621
Category 2: Capital goods Hybrid data (45)% (77)% 128,000 232,000 424,000 912,000 568,000
Category 14: Franchises Franchise-
specific
(5)% (44)% 449,848 475,576 369,718 235,167 810,334
Category 9: Downstream
transportation and distribution
Fuel-based 2% (33)% 167,666 165,037 174,708 157,554 248,574
Category 11: Use of sold products Other 108% 30% 317,472 152,268 65,391 59,081 244,459
Category 7: Employee commuting Average data 33% (45)% 9,674 7,294 5,514 5,720 17,515
Category 5: Waste generated
inoperations
Waste-type-
specific
51% 12% 4,209 2,790 2,234 2,872 3,747
Category 1: Purchased goods
andservices Average data (24)% (70)% 204 268 229 525 689
(Data following revised
methodology trialwith Watershed)
(2,762,833) (2,028,326) (1,172,771) (1,398,858) (2,731,217)
Other categories: 4, 6, 8 Varies (6)% 2012% 6,863 7,330 2,567 1,807 325
Category 13: Downstream
leasedassets
Asset-specific (67)% n/a 17,617 52,860 14,042 0 0
TOTAL Scope 3 emissions 19% (21)% 6,526,467 5,495,408* 3,324,992 3,659,717 8,265,262
* means restated using the latest data and assumptions.
1 Listed in order of highest to lowest climate impact in 2019. With the exception of Scope 3 category 1 emissions, categories less than 1,000 tonnes
in2019 are grouped together.
2 As described in the GHG Protocol ”Technical Guidance for Calculating Scope 3 Emissions”.
75

Scope 3 category Description Commentary on 2023 trends
Category 1:
Purchasedgoods
andservices
Emissions from activities which represent material
categories of spend and available data. Currently,
this is based on water supply and consumption in
offices and facilities, laundries, and potable water
carried on-board. CO
2
e values are calculated by
multiplying m3 water use by UK government
conversion factors.
Scope 3 category 1 emissions 204. This is a
reduction of 24% from 2022, representing a fall
inour water consumption y-o-y, based on our
current methodology.
IAG GBS completed a trial with Watershed in 2023
to revise the methodology for capturingScope 3
category 1 emissions. Themethodology involved
aspend-based calculation applied to IAG’s
supplychain.
Scope 3 category 1 emissions using the Watershed
methodology were 2,762,833 in2023.
Category 2:
Capitalgoods
Emissions associated with aircraft manufacture and
disposal. Calculated by multiplying the number of
aircraft delivered and retired within the reporting
year, by an effective tCO
2
e per plane, based on
disclosed operational emissions from aircraft and
engine manufacturers in 2018 and 2019.
Scope 3 category 2 emissions 128,000. This is a fall
of 45% from 2022, reflecting 2023 aircraft delivery
and retirement data.
2020 is unusually high due to the number
ofaccelerated fleet retirements related to
COVID-19.
Category 3:
Fuelandenergy-related
production
The well-to-tank emissions from jet fuel use, Scope 1
fuel use, and Scope 2 electricity kWh. CO
2
e values
are calculated by multiplying the weight or energy
content of various fuels by the latest standardised
UK Government GHG conversion factors.
Scope 3 category 3 emissions 5,424,914.
This value is directly correlated to fuel use. The
increase of 23% y-o-y is due to a recovery in flying
demand.
Category 4:
Upstreamtransportation
and distribution
Emissions from subcontracted vehicles used in hub
operations or cargo operations.
Scope 3 category 4 emissions 5,042.
Based on 2020 data but not material.
Category 5:
Wastegenerated
inoperations
Emissions associated with processing waste via
recycling, recovery, incineration or landfill. These are
calculated by multiplying total extrapolated global
waste volumes by appropriate CO
2
e/tonne
conversion factors from the UK Government.
Scope 3 category 5 emissions 4,209.
The 51% increase in 2023 is driven by higher
volumes of onboard waste generated as a result
ofincreased flying activity.
Category 6:
Businesstravel
Emissions from jet fuel related to IAG staff travel
onother airline carriers. Staff travel on IAG aircraft
iscaptured in Scope 1 emissions. Emissions from
crew hotels were included in 2023, where such data
was available.
Scope 3 category 6 emissions 1,820.
The 53% fall in 2023 emissions y-o-y reflects
changes in business activities following the
COVID-19 pandemic, and increased use of IT
forinternal communications in offices.
Category 7:
Employeecommuting
Emissions from staff travelling to and from
workplaces. In the absence of detailed staff travel
data, this is calculated by multiplying the number of
FTE employees in the reporting period by the
average commuting distance (km) and average
weighted carbon intensity (CO
2
e/km) of commuting
based on the UK Government National Travel Survey.
Scope 3 category 7 emissions 9,674.
A 33% increase y-o-y due to higher business
activity, but lower than 2019 as some staff
continue to work from home.
Category 8:
Upstream leased assets
Jet fuel emissions from any aircraft leased from
other carriers on a seasonal basis.
Not applicable in 2023 as no relevant activity
wascarried out, but may be relevant in future.
Category 9:
Downstream transportation
anddistribution
Emissions from the fuel use of subcontracted
airorground freight.
Scope 3 category 9 emissions 167,666.
The increase in 2023 is due to increased cargo
operations.
Category 11:
Use of sold products
Emissions related to products purchased by Avios
members using Avios points. Purchases of IAG
flights are reported under Scope 1 emissions.
Product categories reported here are flights on
non-IAG carriers, hotel stays and car hire, as these
are the most material categories.
Scope 3 category 11 emissions 317,472.
The increase in 2023 is due to Avios customer
purchasing behaviour returning to near pre-
pandemic levels as travel demand recovers.
Category 13:
Downstream leased
assets
Jet fuel emissions from any aircraft leased to other
carriers on a seasonal basis.
Scope 3 category 13 emissions 17,617.
In 2023, emissions reduced 67% y-o-y from leasing
of aircraft to another airline.
Category 14:
Franchises
Emissions from the jet fuel burn of aircraft franchises. Scope 3 category 14 emissions 449,848.
2023 activity in franchises fell 5% y-o-y as business
operations normalise as flying demand recovers.
76

Additional disclosures continued
A.2. Planet – Other
A.2.1a. Waste definitions
Relevant GRI standards: GRI 306-1/2/3 (2020)
See Section A.2.1 for 2023 waste metrics and a description of the ’5 by 2025’ waste targets.
Waste type Waste metric Description of metric
Single-use-plastic Volume Items made wholly or partly of plastic which are typically intended to be used just once
orfor a short period of time before they are thrown away. This aligns to the EU definition.
Onboard kg/passenger Numerator: Onboard waste is both cabin and catering waste. Cabin waste is defined
asitems collected from the cabin following flights, including newspapers, blanket and
headphone wrapping, and packaging which passengers have brought onto the aircraft.
Includes rubbish bins from toilets and excludes lost luggage. Catering waste is defined
asfood and packaging left over from onboard catering, including drinks cans, and
IAG-owned waste from food preparation at catering facilities. Includes all categories
ofcatering waste covering international and domestic flights.
Denominator: The number of inbound passengers at hub airports, plus outbound
passengers on short-haul flights whose waste was kept onboard the aircraft and
offloaded at the hub when the plane returned.
Cargo kg/tonne of cargo
handled
Numerator: Total waste from handling and packaging cargo. This consists largely
ofrecyclable materials such as plastic, wood and cardboard but is impacted heavily
byadhoc disposal of perishable or hazardous cargo.
Denominator: Tonnes of cargo and mail handled in three main hubs: Dublin, Madrid
andLondon Heathrow.
Maintenance kg/person-hour Numerator: Materials from specific maintenance/engineering facilities including paper,
metal and hazardous waste. Excludes airport waste, aircraft disposal, construction waste
and effluent.
Denominator: Number of available person-hours at maintenance facilities, as compiled
bymaintenance teams.
Office kg/employee Numerator: Materials from printing, office stationery and onsite catering. Includes offices,
training facilities, and Irish, Spanish and UK call centres. Includes technology waste,
defined as primarily data centre equipment and IAG-owned IT equipment.
Denominator: Total FTE employees at the end of the reporting period.
Waste disposal method Description (as per GRI 306 standards)
Landfilled Defined as “final depositing of solid waste at, below, or above ground level at engineered
disposal sites”.
Includes: waste sent directly to disposal.
Excludes: waste sent to third parties.
Incinerated Defined as “controlled burning of waste at high temperatures”.
Includes: incineration with energy recovery.
Recovered Defined as “any operation wherein products, components of products, or materials
thathave become waste are used or prepared to be used to fulfil a purpose in place
ofnew products, components, or materials that would otherwise have been used for
thatpurpose.”
Includes: incineration including energy from waste if the incinerator meets set standards.
Excludes: reprocessing into materials that are to be used as fuels.
Recycled Defined as “reprocessing of products or components of products that have become
waste, to make new materials”.
Includes: downcycling, upcycling, composting and anaerobic digestion, uniforms re-used,
and plastics turned into new plastic products.
Excludes: reprocessing into materials that are to be used as fuels.
77

A.2.2a. Noise definitions
Description and commentary of noise metrics is in section A.2.2. IAG only reports on the most stringent ICAO and ICAO Committee
on Aviation Environmental Protection (CAEP) standards for aircraft. The Group has been over 97 per cent compliant with ICAO
Chapter 4 and CAEP Chapter 4 standards for several years.
Metric Unit Description Commentary on 2023 trends
Noise per
LTO
QC/LTO Average noise per flight considering arrival and departure
noisefor each aircraft type. Based on the number of flights
ofallaircraft which operated during the year, including
leasedaircraft.
Quota Count (QC) values from the UK Government are used
tocreate a relative categorisation based on certified noise
levels. For example, for a single flight, a Boeing 747 would
havehad a score of 6.0 while an Airbus A320NEO would have
ascore of 0.5 or lower.
This value has improved by 2% since
2022, and 14% since 2019, due to the
use of newer quieter aircraft.
Values can fluctuate year on year
due to factors such as the mix
ofshort-haul and long-haul flying.
NOx per
LTO
kg/LTO Average emissions of the air pollutants nitrogen oxides (NOx)
as aircraft take off and land. This calculation considers the
engine certifications and aircraft types of all aircraft which
operated during the year, including leased aircraft, referencing
information from the ICAO emissions database.
This value has increased by >1%
since2022, but improved by
4%since 2019.
Increased flight operations account
for slight y-o-y increases, but NOx
reductions since 2019 are
attributable to the introduction
ofnewer aircraft.
ICAO
Chapter 14
% of fleet at
standard
ICAO Chapter standards compare aircraft noise against
standardised limits that are a combination of lateral, approach
and flyover noise levels. Higher standards are more stringent.
Chapter 14 applies to new aircraft certified from January 1, 2017.
62%
An increase of 3 percentage points
from 2022 and 9 points from 2019.
Compliance will continue to improve
as newer aircraft are introduced to
the fleet and following retirement
ofolder aircraft.
CAEP
Chapter 6
% of fleet at
standard
ICAO CAEP standards are for NOx emissions from aircraft
engines. Higher standards are more stringent. The CAEP 6
NOxstandard applies to engines manufactured from
January1,2008.
81%
An increase of 1 percentage point
from 2022, and 3 points from 2019.
The improvement is driven by
fleetmodernisation.
CAEP
Chapter 8
% of fleet at
standard
The CAEP 8 standard applies to engines manufactured from
January 1, 2014.
47%
An increase of 6 percentage points
from 2022, and 12 points from 2019.
The improvement is driven by
fleetmodernisation.
A.2.3. Biodiversity
Biodiversity is not currently seen as a material issue for IAG, but the business is taking steps to manage and mitigate its impacts
onbiodiversity where relevant. A key method of mitigating biodiversity impacts is ensuring that SAF projects align with principles
from the Roundtable on Sustainable Biomaterials (RSB) or International Sustainability & Carbon Certification (ISCC) standards.
Othersteps to manage biodiversity impacts include:
• IAG airlines are signatories to the Buckingham Palace Declaration on preventing global wildlife trafficking.
• The Group implements active governance around overseas offset projects to account for their impact on biodiversity.
• British Airways owns approximately 20 acres of 300 acres of parkland surrounding the London head office, which includes
grassland, lakes and ponds and has rangers actively managing these habitats.
A.2.4. Water
Relevant GRI standards: GRI 303-3
Water consumption is not a material issue for IAG. However, water use is monitored across the Group and IAG consumed 539,791 m
3
of water in 2023 in offices, ground facilities and potable water onboard aircraft. The 2023 reduction increase is due to stabilising
Group operations following the COVID-19 pandemic.
Metric Unit vly 2023 2022 2021 2020 2019
Water consumption ’000 m
3
(15)% 540 638 544 525 655
78

Additional disclosures continued
B. People
Sections B.1. to B.6. are on prior pages of this NFIS.
B.2a. Key headcount metrics
Headcount – Gender and Age
Relevant standards: GRI 2-7; GRI 405-1
Total number and distribution of employees by sex
Metric
Headcount Headcount (%)
vly 2023 2022 vly 2023 2022
Female 9% 31,807 29,193 0pts 44% 44%
Male 9% 39,987 36,851 0pts 56% 56%
Group Total 9% 71,794 66,044 - 100% 100%
Total number and distribution of employees by age
Metric
Headcount Headcount (%)
vly 2023 2022 vly 2023 2022
Over 50 9% 22,493 20,730 0pts 31% 31%
30–50 5% 34,735 33,090 (1pt) 49% 50%
Under 30 19% 14,560 12,224 1pt 20% 19%
Group Total 9% 71,794* 66,044 - 100% 100%
* 6 employees are omitted due to missing date of birth information
Description
The share of headcount across the Group by Sex (Male/Female) or Age (Grouped – Over 50; 30–50; and Under 30) on 31 December
2023
Commentary
The gender distribution across the Group has remained constant in 2023, reflecting uniform growth rates for both males and
females, factoring in attrition and new joiners.
The under-30 age group constitutes 20% (+1pt) of the Group year-end headcount, reflecting a lower attrition rate compared to 2022
for this population. The relative decrease in the 30–50 age group at 49% (-1pt) reflects a more normalised recruitment profile
compared to 2022, which saw a significant number of experienced cabin crew members returning to the business, coupled with a
slightly lower reduction in attrition rate compared to other age groups.
Headcount – Employment types
Relevant standards: GRI 2-7
Total number and distribution of employees by contract type
Metric
Headcount Headcount (%)
vly 2023 2022 vly 2023 2022
Permanent 9% 68,608 63,023 1pt 96% 95%
Temporary 5% 3,186 3,021 (1pt) 4% 5%
Group Total 9% 71,794 66,044 - 100% 100%
Total number and distribution of employees by full-time/part-time
Metric
Headcount Headcount (%)
vly 2023 2022 vly 2023 2022
Full-Time 3% 54,669 52,976 (4pts) 76% 80%
Part-time 31% 17,125 13,068 4pts 24% 20%
Group Total 9% 71,794 66,044 - 100% 100%
Description
Composition is a breakdown of headcount as at 31 December 2023. Full-time employees are defined as those working full
contractual hours as at 31 December 2023. A temporary employment contract has a defined end date.
Commentary
The decline in temporary workforce (1pt) is driven by the change in seasonal (temporary) contracts in Spain from temporary
employment arrangements to permanent fixed-discontinuous terms (a specific Spanish contractual term).
This change has an associated impact in our year-end part-time headcount which now accounts for 24% of headcount, as these
previously seasonal workers are now included in the final year-end census.
79

Headcount – Professional Category
Relevant standards: GRI 2-7
Total number and distribution of employees by professional classification
Metric
Headcount Headcount (%)
vly 2023 2022 vly 2023 2022
Airport Operations 11% 16,784 15,091 0pts 23% 23%
Cabin Crew 8% 24,004 22,278 (1pts) 33% 34%
Corporate Functions 13% 15,811 14,025 1pt 22% 21%
Maintenance 3% 6,972 6,782 0pts 10% 10%
Pilots 5% 8,223 7,868 0pts 12% 12%
Group Total 9% 71,794 66,044 - 100% 100%
Description
The employee category breakdown shows the distribution of the major groups within IAG’s workforce ’in the air‘ – pilots and cabin
crew – and ’on the ground’ – airport, corporate and maintenance.
Commentary
In 2023, the Group experienced increases in overall headcount across all functions, with a notable emphasis on sustained recruitment
in our Airport Operations (11% increase), particularly in our Spanish business. Additionally, the Group has seen increases in certain
Corporate functions (13% increase) with investment in customer and IT-related roles – in particular within our global customer
contact centres and management roles in Heathrow.
Headcount – Country/Region
Relevant standards: GRI 2-7; GRI 2-30
Total number and distribution of employees by country/region
(with percentage of employees covered by collective bargaining agreements)
Metric
Headcount Headcount (%) Employees covered by CBA % covered by CBA
vly 2023 2022 vly 2023 2022 vly 2023 2022 vly 2023 2022*
Europe 8% 67,748 62,508 (1pt) 94% 95% 9% 61,203 56,418 0pts 90% 90%
United Kingdom 11% 37,500 33,835 1pt 52% 51% 11% 33,418 30,253 0pts 89% 89%
Spain 7% 23,743 22,293 (1pt) 33% 34% 8% 22,837 21,179 1pt 96% 95%
Ireland 10% 5,159 4,680 0pts 7% 7% 8% 4,287 3,954 (1pt) 83% 84%
Other Europe (21%) 1,346 1,700 (1pt) 2% 3% (36%) 662 1,032 (12pts) 49% 61%
Africa, Middle East
andSouth Asia 24% 2,527 2,030 1pt 4% 3% (13%) 222 255 (4pts) 9% 13%
North America 3% 950 920 0pts 1% 1% 3% 678 658 (1pt) 71% 72%
Latin America
andCaribbean 2% 324 318 0pts 0.6% 0.6% (5%) 194 205 (4pts) 60% 64%
Asia Pacific (9%) 245 268 0pts 0.4% 0.4% (9%) 106 117 (1pt) 43% 44%
Group total 9% 71,794 66,044 – 100% 100% 8% 62,404 57,652 0pts 87% 87%
* re-statement of %s for 2022 due to formula discrepancy which now correctly reflects c1000 non-CBA employees
Description
Collective bargaining can cover a wide array of issues pertaining to working conditions, such as remuneration, working time, perks
and benefits, and occupational safety and health. This coverage rate refers to the proportion of employees who are covered by one
or more collective agreements. It is calculated using headcounts at the end of the reporting period.
Commentary
The Group recorded headcount growth across our key markets in the UK, Spain, and Ireland, with a notable increase in airport
operations in Spain. Concurrently, reductions in Other Europe (21%) are linked to the restructuring of one of our business units
inGermany. Furthermore, the increase in headcount in Africa, the Middle East, and South Asia (24%) can be attributed to the
expansion of customer contact centres in India.
Collective bargaining coverage rates have remained stable in core markets (UK, Spain and Ireland).
80

Additional disclosures continued
B.2.b. Employment and working organisation
Relevant standards: GRI 2-7
Total number of employment contracts and distribution by type
(annual average headcount of permanent, temporary and part-time contracts)
Gender distribution
Metric
Permanent contracts Temporary contracts
vly 2023 2022 vly 2023 2022
Men 13% 37,337 33,003 (4%) 1,530 1,590
Women 18% 29,320 24,941 (5%) 1,575 1,658
Total 15% 66,657 57,944 (4%) 3,105 3,248
Metric
Full-time contracts Part-time contracts
vly 2023 2022 vly 2023 2022
Men 8% 31,952 29,602 39% 6,914 4,991
Women 9% 20,796 19,059 34% 10,099 7,540
Total 8% 52,748 48,661 36% 17,013 12,531
Age distribution
Metric
Permanent contracts Temporary contracts
vly 2023 2022 vly 2023 2022
Under 30 42% 10,969 7,753 15% 1,957 1,697
30–50 10% 33,076 29,936 (27%) 1,052 1,438
Over 50 12% 22,608 20,255 (11%) 96 108
Total 15% 66,657* 57,944 (4%) 3,105 3,248
Metric
Full-time contracts Part-time contracts
vly 2023* 2022 vly 2023* 2022
Under 30 30% 10,822 8,305 84% 2,104 1,142
30–50 3% 25,737 24,895 30% 8,391 6,484
Over 50 5% 16,187 15,461 33% 6,516 4,905
Total 8% 52,748* 48,661 36% 17,013* 12,531
Employee category distribution
Metric
Permanent contracts Temporary contracts
vly 2023 2022 vly 2023 2022
Airport Operations 20% 15,531 12,923 (25%) 864 1,155
Cabin Crew 18% 22,177 18,768 (12%) 1,296 1,478
Corporate Function 22% 14,215 11,648 49% 780 523
Maintenance (4%) 6,649 6,894 79% 165 92
Pilots 5% 8,085 7,710 0 0
Total 15% 66,657 57,943 (4%) 3,105 3,248
Metric
Full-time contracts Part-time contracts
vly 2023 2022 vly 2023 2022
Airport Operations 0% 10,565 10,506 63% 5,830 3,572
Cabin Crew 5% 15,564 14,780 45% 7,909 5,465
Corporate Function 26% 13,713 10,928 3% 1,282 1,244
Maintenance (3%) 6,543 6,765 22% 271 222
Pilot 12% 6,363 5,682 (15%) 1,721 2,028
Total 8% 52,748 48,661 36% 17,013 12,531
* 6 employees are omitted due to missing date of birth information
Description
Average numbers for each employment contract in which the employee’s role was active during the reporting period (pro-rated
forperiod employed – maximum value of 1).
Commentary
Average headcount has continued to increase as a reflection of the cumulation of our 2022 recruitment campaigns and is now at 69,762.
There are demographic shifts with 84% increase of those under-30 in part-time roles which is a reflection of the changing of seasonal
contracts in Spain. Alongside this there has been increases in Airport Operations and Corporate functions, notably in customer and IT roles.
81

Average hours of training
Relevant standards: GRI 404-1
Gender distribution
Metric
Training hours completed % of employees trained Avg. training hours
vly 2023 2022 vly 2023 2022 vly 2023 2022
Men 14% 1,616,617 1,420,183 3pts 94% 91% (9%) 39.3 43.3
Women 1% 1,602,474 1,591,903 6pts 92% 86% (18%) 55.2 67.1
Total 7% 3,219,091 3,012,086 4pts 93% 89% (14%) 45.8 53.3
Employee category distribution
Metric
Training hours completed % of employees trained Avg. training hours
vly 2023 2022 vly 2023 2022 vly 2023 2022
Airport Operations 35% 633,796 470,019 1pt 94% 93% 4% 39.9 38.2
Cabin Crew (7%) 1,574,677 1,695,211 7pts 93% 86% (21%) 73.2 92.2
Corporate Function 6% 427,455 404,992 6pts 90% 84% (27%) 25.2 34.5
Maintenance 31% 284,176 216,712 4pts 96% 92% 28% 40.2 31.5
Pilots 33% 298,987 225,151 2pt 98% 96% 8% 33.9 31.4
Total 7% 3,219,091 3,012,086 4pts 93% 89% (14%) 45.8 53.3
Description
All mandatory and non-mandatory training is in scope and can cover a wide array of topics, including human rights, anti-corruption,
flight simulator and e-learning courses. The ‘% of employees trained’ rate refers to the proportion of employees who completed any
training within the report period and ‘Avg. training hours’ is based on the total training hours performed per average headcount,
pro-rated to Full Time Equivalent (FTE).
Commentary
In 2023, there has been an overall increase in training hours of 7% which is broadly in line with our 9% increase in headcount.
Reductions in average training hours across all our employees is a result of the notable recruitment campaigns in 2022, where over
17,000 individuals joined the business, predominantly in operational roles such as Airport Operations and Cabin Crew – with investment
in training key to effective on-boarding and readiness to operate. Additionally, there was substantial retraining for existing operational
employees to rebuild our network and capacity, e.g. pilots being re-skilled and re-certified on different aircraft types.
Average training hours for female employees remains higher than males due to their stronger representation in Cabin Crew roles,
which have significantly higher training hours compared to other role-types.
In 2023, the data reflects the lasting effects of the substantial training investments made the previous year. Despite the decrease in
overall training metrics, the percentage of employees trained has remained relatively stable, underscoring our ongoing commitment
to careers and development.
82

Additional disclosures continued
Health and safety at work
Relevant standards: GRI 403-9; GRI 403-10
Lost Time Injuries
Metric
Workplace Accidents
Lost Time Injury (LTI)
severity rate
Lost Time Injury (LTI)
frequency rate
vly 2023 2022 vly 2023 2022 vly 2023 2022
Airport Operations 41% 805 571 3% 28.9 28.0 16% 6.7 5.8
Cabin Crew 46% 763 523 (32%) 12.0 17.7 23% 5.3 4.3
Corporate Function 166% 88 33 (67%) 13.5 41.4 133% 0.7 0.3
Maintenance 22% 125 102 (28%) 23.6 32.8 21% 2.3 1.9
Pilots 46% 73 50 18% 16.6 14.1 30% 1.3 1.0
Total 45% 1,854 1,279 (15%) 20.4 24.0 23% 3.7 3.0
Metric
Workplace Accidents
Lost Time Injury (LTI)
severity rate
Lost Time Injury (LTI)
frequency rate
vly 2023 2022 vly 2023 2022 vly 2023 2022
Men 45% 1,035 713 (11%) 23.1 26.1 21% 3.5 2.9
Women 45% 819 566 (20%) 17.0 21.2 60% 4.0 2.5
Total 45% 1,854 1,279 (15%) 20.4 24.0 23% 3.7 3.0
Absenteeism
Metric
Number of instances Hours absent Absenteeism rate
vly 2023 2022 vly 2023 2022 vly 2023 2022
Airport Operations 5% 12,639 11,942 10% 2,110,641 1,921,075 (0.7pts) 8.2% 8.9%
Cabin Crew 6% 16,654 15,458 16% 2,044,707 1,756,203 (0.4pts) 6.7% 7.1%
Corporate Function 18% 7,065 6,181 11% 696,983 630,804 (0.3pts) 2.7% 3.0%
Maintenance (10%) 4,506 5,047 (11%) 528,581 590,817 (0.7pts) 4.5% 5.2%
Pilots 3% 5,283 5,131 33% 618,387 466,356 0.7pts 5.2% 4.5%
Total 6% 46,057 43,759 12% 5,999,299 5,365,255 (0.3pts) 5.7% 6.0%
Metric
Number of instances Hours absent Absenteeism rate
vly 2023 2022 vly 2023 2022 vly 2023 2022
Men 5% 25,108 24,326 11% 3,182,945 2,879,589 0.1pt 5.1% 5.0%
Women 10% 20,949 19,433 13% 2,816,354 2,485,666 0.4pt 6.4% 6.0%
Total 6% 46,057 43,759 12% 5,999,299 5,365,255 (0.3pt) 5.7% 6.0%
Occupational illness
Metric
Number of instances
vly 2023 2022
Men (85%) 4 26
Women 75% 7 4
Total (54%) 11 30
Workplace fatalities
Metric
Number of instances
vly 2023 2022
Cabin Crew – 0 0
Pilots – 0 0
Airport Operations – 0 0
Corporate Function – 0 0
Maintenance – 0 0
Total – 0 0
83

Description and methodology
Metric Description Formula for calculation
Lost Time Injury severity
rate
This measures the impact of occupational accidents as reflected in
time off work by the affected workers.
(Working days lost)/(Number
of LTIs)
Lost Time Injury frequency
rate
A lost time injury (LTI) is a non-fatal injury arising out of, or during,
work, which leads to a loss of productive work time.
The unit of measurement is LTI per 200,000 hours worked, using
actual hours worked.
((Hours lost due to workplace
injury)/(Hours worked )) x
200,000
Hours absent For the purpose of this metric, only unplanned or unauthorised
absences – which means employees missing partial or whole days
ofwork – are included.
Examples in scope are short-term and long-term sickness, time off
due to injuries, and no-shows, absences without leave or permission.
Sum(Hours absent)
Absenteeism rate The absenteeism rate is calculated as total employee absences
divided by total scheduled hours in the reporting period, expressed
as a percentage.
In general, most of the Group record absence in hours. Where days
are recorded (mostly in Pilots and Cabin Crew category), days are
converted to hours at a rate of 7.5 hours per day (Group average
fullday).
(Number of hours absent)/
(Number of hours scheduled)
Occupational illness: An occupational illness is a medical condition or disease that
develops gradually over time as a result of work performed and/or
exposure to risk factors in the workplace. The illness must be
confirmed by a medical diagnosis.
Occupational illnesses in scope for the UK follow Reporting of
Injuries, Diseases and Dangerous Occurrences Regulations (RIDDOR)
standards and can be found on the Health and Safety Executive’s
(HSE) website.
Occupational illnesses in scope for Spain are published in the Royal
Decree 1299/2006.
Number of occupational
illness medically diagnosed
Fatalities: Work-related fatalities associated to an occupational illness or
diseases.
To align with GRI guidance, fatalities as a result of commuting
accidents are only included in cases where the transport has been
organised by the business, such as via a company or contracted bus
or vehicle. The exception is employees in Spain, where inclusion of
these types of fatalities is a legal requirement.
Number of work-related
fatalities
Commentary
In the context of the business having recovered to 96% of our 2019 operational capacity, its notable that the recent workplace data
for 2023 shows both improvements and challenges compared to both 2022 and 2019.
The increase in accident frequency rates to 3.7 days per injury, along with a 45% rise in accidents, reflects a return to more
normalised operational levels. This shift is attributed to colleagues, who spent a significant period in training during 2022, now
contributing additional operational hours to the Group
The Group’s absenteeism rates have remained consistent at 5.7%, and a total of 6 million absence hours were recorded in 2023.
Mostemployee groups experienced modest decreases in absenteeism rates.
Occupational illness in 2023 decreased to 11 incidents, with the majority of these being injuries/diseases which do not have
adisabling effect on the individual.
There were no recorded fatalities associated with occupational injuries or illnesses in 2023.
84

Additional disclosures continued
B.2.c. Employee turnover
Relevant standards: GRI 401-1
Relevant CNMV title: Total number of dismissals and voluntary leavers (distribution by gender, age and job category)
Total number of leavers and turnover rate by gender
Metric
Voluntary leavers Voluntary attrition rate Non-voluntary leavers Non-voluntary attrition rate
vly 2023 2022 vly 2023 2022 vly 2023 2022 vly 2023 2022
Men (3%) 2,694 2,771 (2pts) 6.9% 8.9% 41% 804 571 0.7pt 2.1% 1.4%
Women 2% 2,450 2,396 0.2pt 7.9% 7.7% 77% 664 375 0.6pt 2.2% 1.6%
Total 0% 5,144 5,167 (1pt) 7.4% 8.4% 55% 1,468 946 0.6pt 2.1% 1.5%
Total number of leavers and turnover rate by age
Metric
Voluntary leavers Voluntary attrition rate Non-voluntary leavers Non-voluntary attrition rate
vly 2023 2022 vly 2023 2022 vly 2023 2022 vly 2023 2022
Under 30 10% 2,246 2,048 (3.7pts) 17.4% 21.1% 34% 395 298 0pts 3.1% 3.1%
30–50 (7%) 2,014 2,174 (0.8pt) 5.9% 6.7% 93% 618 322 0.8pt 1.8% 1.0%
Over 50 (6%) 884 945 (0.6pt) 3.9% 4.5% 40% 455 326 0.5pt 2.0% 1.5%
Total 0% 5,144 5,167 (1pt) 7.4% 8.4% 55% 1,468 946 0.6pt 2.1% 1.5%
Total number of leavers and turnover rate by employee category
Metric
Voluntary leavers Voluntary attrition rate Non-voluntary leavers Non-voluntary attrition rate
vly 2023 2022 vly 2023 2022 vly 2023 2022 vly 2023 2022
Airport Operations (9%) 1,168 1,289 (2pts) 7.1% 9.1% 26% 498 394 0.3pt 3.0% 2.7%
Cabin Crew 11% 1,523 1,367 (0.3pt) 6.5% 6.7% 10% 306 278 0pt 1.3% 1.3%
Corporate Function (4%) 1,803 1,869 (2.3pts) 12.0% 14.3% 251% 534 152 2.4pts 3.6% 1.2%
Maintenance (12%) 452 512 (0.1pt) 6.6% 6.7% 5% 44 42 0.1pt 0.7% 0.6%
Pilots 52% 198 130 0.7pt 2.5% 1.7% 8% 86 80 0.1pt 1.1% 1.0%
Total 0% 5,144 5,167 (1pt) 7.4% 8.4% 55% 1,468 946 0.6pt 2.1% 1.5%
Description
Measured as the number of leavers as a percentage of the average number of Group employees in the year. The number of leavers
excludes temporary contracts and death in service. Voluntary turnover occurs when employees choose to leave (e.g. resignation,
retirement, voluntary redundancy) and non-voluntary turnover occurs when employees leave for reasons other than a personal
decision (e.g. compulsory redundancy, dismissal).
Commentary
The overall annual turnover in 2023 was 9.5%, of which 7.4% were voluntary leavers and 2.1% were non-voluntary leavers.
The increase in non-voluntary leavers is attributed to the re-structuring of our central IT function and the closure of one of our
customer contact centres in Germany. With the exception of this restructure, the non-voluntary ratios are consistent with 2022.
The voluntary attrition ratios reflect a stable picture with no change in overall voluntary leavers and a modest 1% reduction
inourvoluntary attrition rates. The decrease in Airport Operations attrition rates (2 pts), associated with themovement to
permanent contracts for those in Airport Operations in Spain and the modest increases in Pilot voluntary attrition (0.7pt) is
associated with leavers from Iberia Express and Vueling.
85

B.2.d. Other social and employee-related matters and metrics
Working hours
Relevant standards: GRI 103-2, 401-2
Time worked and holidays are different in each operating company as per the respective collective bargaining agreements.
Asaresult, the Group does not have a group-wide working hours policy.
Employees with disabilities
Relevant standards: GRI 405-1
Metric vly 2023 2022
Employees with disabilities¹ 26% 914 724
Overall share of headcount 0.2pts 1.3% 1.1%
¹Aer Lingus data is out of scope.
Description
Employees with disabilities as a percentage of headcount at the end of the year.
Collecting disability information on employees is not a legal requirement in the UK or Ireland, unlike in Spain. Disabilities in scope
aremedically certified in Spain but self-declared in all other jurisdictions.
Commentary
The 2023 percentage has increased slightly in 2023 to 1.3% of Group headcount. The majority of this change is associated
withincreased voluntary disclosures in the UK (+99) and increases in those who have declared the medically diagnosed disability
inSpain (+101).
86

Additional disclosures continued
B.8. Remuneration and salary gap
Relevant standards: GRI 405-2
B.8.1. Average remuneration by gender, age and job category – salary gap
Remuneration 2023 by seniority level (€) and by age band (€)
Category
Overall Male Female Salary gap
vly 2023 2022 vly 2023 2022 vly 2023 2022 vly 2023 2022
Seniority Senior
executives 5% 314,186 300,465 14% 347,180 305,829 6% 299,596 281,839 5.9pts 13.7% 7.8%
Other
management 2% 234,686 230,460 0% 251,378 251,249 (2%) 121,048 123,602 0.7pt 51.9% 51.2%
All other
employees 3% 52,615 51,259 0% 52,651 52,742 6% 52,572 49,667 (5.6pts) 0.2% 5.8%
Total
Workforce 2% 55,855 54,745 0% 58,601 58,374 6% 53,678 50,868 (4.5pts) 8.4% 12.9%
Age
Group
<30 (4%) 39,182 40,754 (8%) 37,478 40,877 (1%) 40,487 40,700 (8.4pts) -8.0% 0.4%
30–50 2% 56,687 55,672 (1%) 59,639 59,309 3% 53,937 52,480 (1.9pts) 9.6% 11.5%
>50 2% 67,661 66,636 (2%) 70,482 71,555 6% 65,033 61,502 (6.4pts) 7.7% 14.1%
Total
Workforce 2% 55,855 54,745 0% 58,601 58,374 6% 53,678 50,868 (4.5pts) 8.4% 12.9%
The difference between the Gender Pay Gap and Pay Equity
The Gender Pay Gap is a measure based essentially on pay averages across an organisation. It takes no account of the different
rolesthat people occupy.
Pay Equity is the principle that people doing the same work should receive the same pay, allowing for legitimate differences such
astenure, performance and experience.
It is perfectly possible for an organisation that pays its people fairly and equitably within different roles to have a Gender Pay Gap.
The existence of a Gender Pay Gap does not in itself mean that there is any problem with Pay Equity.
IAG has strong pay equity principles in place, ensuring that our male and female employees are paid equitably for the work they do,
based on experience and performance (within other factors).
Description
Remuneration data is presented at the median for gender, age and seniority population groupings. The reported components
ofremuneration continue to include basic salary, shift pay, allowances and employer pension contributions, taxable benefits and
annual incentives, so that a clear view to overall, total remuneration is provided.
The presentation of remuneration values and the population included continued on an unchanged basis, in that:
• All values are shown on an annualised basis;
• All values shown are on a full time equivalent basis;
• Values are only reported for time worked. Remuneration received for not working is excluded from reported values;
• To ensure consistency 2022 non-euro remuneration have been restated using 2023 exchange rates;
• The reported salary gap for each population continues to represent the difference between men and women’s median
remuneration, expressed as a percentage of men’s remuneration; and
• Regarding seniority population groupings ‘Senior executives’ includes Group management committee members, operating
company management committee members, directors and other senior/executive positions. ‘Other management’ includes all other
management roles, including pilots at the captain seniority level. The ‘All other employees’ grouping includes all other roles across
the group, including the majority of pilots and cabin crew.
Commentary
Within IAG’s operating model, employee reward is owned and managed within each operating company to enable them to deliver
the right customer and employee experience. Our employees have been central to our strong performance and key to delivering
forour customers. Operating companies continue to put in place a range of tools that are appropriate in their respective markets
and geographies to support our people through these challenging times and ensure our pay models are sustainable, fair and aligned
to the Group’s future success.
87

B.8.2. Salary gap analysis
As the Group built back resources during 2023, in particular in airport operations, customer and IT roles, the composition of the
workforce has changed, with the resultant median pay point for both men and women changing compared to 2022. The result
isthat at Group level, there has been a year-on-year reduction in the median salary gap from 12.9% in 2022 to 8.4% in 2023,
andfrom31.7% to 32.6% for the mean salary gap.
Pilot pay remains the most significant driver of gender pay gap, reflecting both lower numbers of female pilots and the impact
ofseniority. This is a key area of focus across all airlines in the group and each airline is looking at increasing the diversity of its
pilotpopulations through talent attraction and recruitment practices and through school engagement and outreach programmes.
For example, British Airways, Aer Lingus and Iberia have launched fully or semi-funded pilot cadet programmes. Aer Lingus currently
has 11% of pilot roles filled by women, the third-highest gender representation of pilots of all airlines globally (Source: International
Society of Women Airline Pilots 2021).
The gender pay gap in the ‘Other management’ category is driven by the inclusion of pilots, at the Captain seniority level, within
thatgroup.
At the start of 2022 we announced our ambition to achieve 40% of women in senior leadership roles by 2025. This ambition was
underpinned by a new diversity and inclusion framework and strategy, and we have been making strong progress in making IAG
amore inclusive place to work. In 2023, we end the year at 36% of women in senior leadership roles, up from 34% in 2022.
Operating companies have implemented a range of initiatives to support gender equality, including reviewing recruitment processes
to ensure diverse shortlists and interview panels, setting up mentoring and networking opportunities for women and providing
educational programmes for girls and young women considering career paths in aviation.
Further explanations of the steps that IAG is taking to promote diversity and inclusion across the Group are set out in the ‘Equity,
Diversity and Inclusion’ section of the Sustainability Report.
B.8.3. Board and Management Committee remuneration
Description:
Average remuneration of Board members and directors, including variable remuneration, allowances, professional indemnity,
contributions to pension and welfare systems and any other parts of the remuneration broken down by gender.
vly 2023 2022 2021 2020 2019
Board
Men (17.7%) 668,333 836,667 510,167 407,326 638,010
Women 2.5% 141,400 138,000 114,600 109,798 133,799
Management Committee
Overall (4.7%) 1,451,375 1,523,328 1,287,780 653,403 1,012,671
Description
• The reported components of remuneration include:
• Executive directors: Basic salary, taxable benefits (company car and private health), employer pension contributions, annual
incentives paid in the reporting period and long-term incentives vesting in the reporting period, personal accident and life
insurance.
• Non-executive directors: All fees (board, chair, committee membership etc) and (taxable) personal travel benefits.
• Using the methodology established in 2020, only directors or Management Committee members, who were in service for the full
year reporting period are included in the year-on-year comparison.
• As per previous years, the remuneration of the IAG CEO is omitted from Management Committee remuneration reporting on the
basis it is already reported as part of board director remuneration.
• These figures are derived from the methodology as per the Remuneration Report filed with the Spanish National Securities Market
Commission (CNMV).
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Additional disclosures continued
Explanation for Board remuneration
The higher level of average remuneration paid to male directors compared to female directors is a direct consequence of male
incumbents holding the higher remunerated CEO and Chairman roles. Where male and female non-executive directors perform
thesame responsibilities, the level of remuneration paid is equivalent as a result of the Group’s standardised non-executive
feeframework.
In 2023 and 2022 the remuneration of 10 non-executive directors and the IAG CEO is included, with the same split of six male
andfivefemale.
The key factors influencing the decreased remuneration for directors, are:
• The decrease in IAG CEO remuneration from 2022 to 2023, driven by:
• As 2018 Performance Share Plan lapsed in full, in 2023, the IAG CEO did not have any award from Long-term incentives
releasing from a holding period; and
• In December 2022 ceased the payment of a transitionary allowance ceased.
• Non-executive directories fees remained unchanged in 2023 vs unchanged in 2023 vs 2022;
• There is a decrease in the take-up of personal flight benefits.
• More generally, female director remuneration is less volatile as there are no female executive directors.
Further explanations of the Board Remuneration are set out in the ‘Director Remuneration Report’ section of the governance report.
Explanation for Management Committee remuneration
Both the components of remuneration and the opportunity associated with those components for Management Committee
members remain unchanged from 2022 to 2023. The decrease in average Management Committee member remuneration in 2023
was driven by factors such as:
• Changes in Management Committee membership between 2022 and 2023; For 2023, this reports the total remuneration of nine
Management Committee members, six male and three female. For comparison, last year’s data set was comprised of
10 Management Committee members, eight male and two female. No gender break-out isshown for confidentiality reasons, given
the female data set relates to only three employees.
• The respective release and vesting of historical 2018 and 2020 deferred share awards;
• Payment of approved 2023 annual incentive award; and
• The lack of Long-term incentive vesting in the period.
The awards resulting from the change in long-term incentive approach from Performance Share Plan (PSP) to a Restricted Share
Plan (RSP), will be reported in the year of vesting, from 2024 onwards, at the point the realised value is known. This is consistent
with our approach of reporting the value of long-term incentives in other CNMV disclosures.
89

B.9. Prosperity
B.9.1. Community and employment impacts
Relevant CNMV title: Impact of the Company’s activities on employment and local development; impact of the
Company’s activities on local populations and territories; relations with actors in local communities and forms
of engagement
At IAG, our purpose is to help make the world a better place by connecting people, businesses and countries. We are committed
tosupporting the development of the regions in which we operate, creating jobs, investing in infrastructure, and contributing
tosocial and environmental causes.
Bringing economic growth to communities
Reactivating our network has meant more opportunities for people and businesses to connect. This is important for IAG’s
performance but also has a positive impact on the economies in which we operate. Aviation boosts economies, supports jobs and
develops supply chains globally. This year, we commissioned a study with consultants PwC which analysed IAG’s economic impact
across the EU and UK for the first time. It took 2019 as the reference period, the last full year of flying before the pandemic. PwC
found that IAG supports more than 600,000 jobs in the region directly and indirectly, contributing nearly €70 billion to the GDP
ofthe EU and UK.
Strengthening local employment
IAG sees work experience as a valuable way of supporting local employment, by engaging young people with IAG’s operating
companies and platform businesses, building their skills and preparing them for potential careers. Many of our operating companies
offer programmes and initiatives which support this aim, including:
• British Airways has continued its investment in emerging talent, evidenced by an increase in the number of graduates and
apprentices joining the company. Early outreach efforts have continued through strategic partnerships and initiatives, such as the
Prince’s Trust Programme. The company has prioritised efforts to open different entry routes into careers, aiming to attract more
individuals from diverse and lower socio-economic backgrounds through apprenticeship schemes, business placements and
internships for Future Leaders;
• Iberia has continued to run its successful internship scholarship programme, offering postgraduate students unique opportunities
within the airline. In addition, Iberia continues to offer vocational programmes within their Maintenance and Operations areas, and
they have multiple agreements with vocational training schools in the Madrid area for their Aeronautical Maintenance Technician
programme, such as ‘Cátedra Iberia’ with la Universidad Politécnica de Madrid;
• Vueling sponsors the Cranfield University Job Fair, which focuses on supporting and attracting the best young talent into the
aviation sector. In 2023, Vueling launched its first internship program, aimed at offering early talent career opportunities and
providing professional experience to students from local universities; and
• Aer Lingus continues to engage with colleges across Ireland, running career days and recruitment fairs to inform students of
career opportunities in aviation. Aer Lingus continues to focus on initiatives to increase diversity in engineering apprenticeship
programmes.
Community engagement and charitable support
In 2023, IAG raised over €7.4 million for charitable causes across the Group. Of this, 36 per cent came from customer contributions,
39 per cent from Company donations, 17 per cent from employee contributions, and 8 per cent from in-kind donations. Our
operating companies and platform businesses have partnered with charities and local communities, including:
• In 2023, Iberia and UNICEF Spain celebrated a 10 year strategic alliance supporting regular vaccination programmes for vulnerable
children. Thanks to the support of the airline's customers and employees more than one million children have been vaccinated.
Also, Iberia Plus members, through ‘Avios Solidarios’, have donated generously to support their choice of non-governmental
organisation;
• Through the BA Better World Community Fund, British Airways customers and colleagues collectively raised over £5 million to
support more than 170 charities across the UK. Since November 2022, British Airways Executive Club members have continued to
support causes through Avios donations with match funding provided by IAG Loyalty. Through its ‘Flying Start’ partnership with
Comic Relief, British Airways customers and colleagues have raised over £28 million since 2010, benefiting over one million people
facing poverty in the UK and around the world. Additionally, for a decade, British Airways has provided support to the Disasters
Emergency Committee (DEC), contributing to 13 humanitarian appeals including Ukraine, the Turkey & Syria Earthquake Appeal
and the Pakistan Floods; and
• IAG Cargo’s initiative called ‘Day to Make a Difference’ is now in its second year. Colleagues support a range of community
projects, from revamping neglected community gardens to supporting a children’s NGO in India.
Further detail on charitable partnerships can be found in the B. People section of the annual report.
90

Additional disclosures continued
B.9.2. Consumer relationship management
Relevant standards: GRI 102-43, 103-2
Claims systems and complaints
Unit vly 2023 2022 2021 2020 2019
Customer complaints
# per 1,000
passengers (4%) 4.3 4.5 4.9 6.5 3.2
Description
Calculated by dividing total customer complaints for the year, by total passengers.
Commentary
IAG airline customers are able to provide feedback and details of complaints in multiple ways, including via IAG airlines’ websites,
bymail, or by phoning customer contact centres. The types of customer complaints received vary significantly, but typically relate
to delays and cancellations, baggage, journey experience, bookings and reservations. To handle customer complaints, IAG airlines
have dedicated customer relations teams who are specially trained to deliver excellent customer service and resolve issues quickly
and in a satisfactory manner. Through their complaint systems, IAG airlines actively track and monitor resolution of customer
complaints using metrics which include the time between a complaint being received and the first communication provided back
tothe customer, or the number of cases raised that have been successfully closed.
In 2023 an average of 4.3 complaints per 1,000 flow passengers were received across all IAG airlines. This ratio has been on
adownward trajectory for the past two years, though it remains higher than pre-pandemic levels.
All IAG airlines also provide facilities for customers to exercise their rights to claim compensation under Regulation (EC)
No.261/2004 of the European Parliament and of the Council of February 11, 2004 establishing common rules on compensation
andassistance to passengers in the event of denied boarding and of cancellation or long delay of flights. Customers are additionally
able to use the IAG airlines’ contact channels to submit claims for financial compensation relating to baggage incidents and other
out–of–pocket expenses, which are assessed and resolved by IAG’s customer relations teams.
B.9.3. Public subsidies received
Relevant standards: GRI 201-4
Unit vly 2023 2022 2021 2020 2019
Total public subsidies € million (19%) 238 293 707 474 94
UK and EU ETS allowances at zero cost € million (14%) 235 273 277 122 nr
Public subsidies were not reported in 2018 as they were assessed as immaterial.
Description
Public subsidies are defined as EU, Swiss and UK Emissions Trading Scheme (ETS) allowances granted at zero cost, and furlough
and job retention schemes in the UK and Ireland for British Airways and Aer Lingus, respectively. EU ETS allowances are valued
atthe carbon market prices at 31 December in the reporting year.
Commentary
Operating companies in the Group receive some EU and UK ETS emission allowances at zero cost and purchase the remainder
intheEU and UK ETS markets.
91

B.9.4. Accounting profit/(loss) before tax
Relevant standards: GRI 207-4
Unit vly 2023 2022 2021 2020 2019 2018
UK € million 3,500% 1,610 46 (2,417) (4,512) 1,618 2,770
Spain € million 307% 1,254 408 (705) (2,538) 489 512
Republic of Ireland € million 415% 170 (41) (368) (556) 240 272
Other countries € million 1,100% 22 2 (16) (204) (72) (67)
Description
Profits by country – the Group’s consolidated accounting profit or loss for the year split by country in which it is taxable.
Commentary
The return to profitability in most of IAG’s main countries of operation reflects the recovery of the Group’s businesses from the
global outbreak of COVID-19.
B.9.5. Income tax paid
Relevant standards: GRI 207-4
Unit vly 2023 2022 2021 2020 2019 2018
UK € million 2,233% 67 3 31 77 161 191
Spain € million 171% 216 126 (93) (95) (71) 92
Republic of Ireland € million 0% 0 0 (2) (28) 27 61
Other countries € million 160% 8 5 1 1 2 (1)
Description
Taxes paid by country – the Group’s consolidated cash tax payments for the year split by country in which they were made.
Thenumbers in brackets above represent refunds.
Commentary
The total net payment of €291 million is less than the expected tax charge for the Group of €401 million. The difference arises
primarily due to the delay between when losses are included in the accounting result, and the future period when these losses
aretaken into account in calculating tax payments.
“Other” comprises Belgium, Dominican Republic, Germany, Guatemala, Honduras, Hong Kong, India, Italy, Japan,
Mexico, Netherlands, Poland, Singapore, Sweden, Switzerland and United States of America.
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Additional disclosures continued
An overview of the EU Taxonomy Regulation
What is the EU Taxonomy Regulation?
Regulation EU 2020/852 (the “EU Taxonomy Regulation”) is a framework to identify and to facilitate sustainable investment across
the EU. This framework operates through a classification system for determining when an economic activity can be considered
environmentally sustainable according to EU standards, promote a transition to a zero-carbon future and guide funding towards
solutions to tackle the climate crisis and prevent further environmental degradation. It aims to encourage investment in a low-carbon
economy by creating common definitions of sustainability and mandatory disclosures to help investors make informed decisions.
How does it work?
The EU Taxonomy Regulation includes economic activities by which to report their business activities against. These economic
activities are then screened against the technical criteria of the each of the environmental objectives and minimum safeguard
requirements to arrive at the taxonomy aligned activities.
Having identified the relevant (eligible) economic activities, the Group calculates and reports the aligned revenue (turnover), capital
expenditure (Capex) and operating expenditure (Opex) for the financial year.
The reporting scope
The EU Taxonomy Regulation’s reporting scope covers the Group’s business activities, based on the financial consolidation boundary
and for the same reporting period, being the year to 31 December.
The Group’s eligible activities principally relate to the activities of our airline operations and associated Maintenance, Repair and
Overhaul (MRO) operations. For the financial year 2023 we are not required to report aligned spend for these activities and we are
awaiting further guidance from the Commission to enable reporting of aligned spend for 2024.
The reporting basis of the EU Taxonomy Regulation differs to our consolidated financial statements, which are prepared in
accordance with International Financial Reporting Standards as adopted by the EU (IFRS). Such differences include, but are not
limited to, not recognising the investment in or results from equity accounted investments, as well as a very narrow scope definition
for Opex. These and other differences result in a lower reported eligible turnover, Capex and Opex under the EU Taxonomy
Regulation when compared to other financial and sustainability disclosures.
The limited scope of the EU Taxonomy Regulation does not enable the Group to outline all of our investment activity in its Flightpath
Net Zero transition. The limitations of the regulation in the following areas prevent the Group from fully disclosing our investment
insustainability: (i) any joint ventures to produce sustainable aviation fuel or hydrogen fuelled aircraft do not fall within the scope
ofour reporting; (ii) our long-term purchase agreements for SAF and other renewable power products, which underpin investment
and enable financing of large-scale renewable production are excluded. The additional reporting restrictions on aviation (where the
growth of the entire global aviation fleet is used to discount an individual company’s investment in best-in-class aircraft and SAF)
also limit the Group’s ability to fully express its financial commitment to the transition to a low-carbon environment. This approach,
requiring company specific performance to be adjusted based on global trends, is unique to aviation and we feel dilutes the impact
of the Taxonomy in driving more investment at an individual company level. However, the Group is supportive of efforts to enhance
and increase the comparability of climate disclosures more broadly.
Changes in EU Taxonomy Regulation in 2023
The EU Taxonomy Regulation, via amending Delegated Regulation EU 2021/2139 on 21 November, 2023, has introduced 13 new
economic activities for which assessments of eligibility are required to be undertaken in 2023 and subsequent assessments of
alignment to be undertaken for 2024. The most important of those relate to those activities associated with the: (i) Manufacturing
ofaircraft, (ii) Passenger and freight air transport and (iii) Air transport ground handling. The Group has incorporated these
additional economic activities into its eligibility reporting for the year to 31 December, 2023. Comparative financial information
hasnot been restated for the introduction of these new activities.
In addition, the EU Taxonomy Regulation includes six environmental objectives, of which only climate change mitigation and climate
change adaption were required to be reported against in 2022, whereas, all six objectives are applicable for 2023. These four new
objectives incorporate 35 new economic activities for assessment of eligibility in 2023.
Snapshot of eligible and aligned activities
In 2023, the Group’s eligible and aligned KPIs were as follows (note that in line with the regulations we have published full tables
onpages 34-36).
Eligibility Aligned
Year to December 31, 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Turnover 27,166 92% – 0%
Capex 3,543 81% – 0%
Opex 2,509 86% – 0%
C. Governance
93

Understanding the EU Taxonomy Regulation
Basis of preparation
The Group prepares its disclosures in accordance with the Delegated Act EU 2021/2178 (enacted 4 June, 2021), the associated
Delegated Regulation EU 2021/2139 (enacted 6 July, 2021), the amendments to Delegated Regulation EU 2021/2139 (enacted
21 November, 2023) (referred to as the Amended Delegated Regulation), several Commission Notices containing answers to
frequently asked questions, the annually updated EU Taxonomy User Guide and the EU Taxonomy Compass (a website that offers
arange of online tools to enable users to better understand the EU Taxonomy Regulation and the associated reporting obligations).
The EU Taxonomy Regulation framework
Framework overview
The EU Taxonomy Regulation establishes 150 predefined and prescriptive economic activities across the following six environmental
objectives, with the first two only applicable in 2022 and all six now applicable for 2023:
1 Climate change mitigation;
2 Climate change adaptation;
3 Sustainable use and protection of water and marine resources;
4 Transition to a circular economy;
5 Pollution prevention and control; and,
6 Protection and restoration of biodiversity and ecosystems.
The EU Taxonomy Regulation also sets out 4 overarching conditions that an economic activity must meet in order to qualify
asenvironmentally sustainable and accordingly able to be reported as taxonomy aligned:
1 Making a substantial contribution to at least one environmental objective;
2 Doing no significant harm to any of the other five environmental objectives;
3 Complying with minimum safeguards; and,
4 Complying with the detailed technical screening criteria set out in the EU Taxonomy Regulation delegated acts.
Taxonomy-eligible
The EU Taxonomy Regulation defines taxonomy-eligible economic activities as those activities of the Group that comply with any of
theaforementioned 150 economic activities. Such activities are eligible whether they comply with the technical screening criteria or not.
The EU Taxonomy Regulation, via amending Delegated Regulation EU 2021/2139 on 21 November, 2023, has introduced 13 new
economic activities for which assessments of eligibility are required to be undertaken in 2023. The most important of those, which
relate to the aviation sector, are those activities associated with the (i) Manufacturing of aircraft, (ii) Passenger and freight air
transport and (iii) Air transport ground handling. In addition new activities introduced via the four new environmental objectives
weonly need report eligible spend for 2023.
If an activity is not included in the EU Taxonomy Regulation, then it not considered to be eligible. This was the case in 2022 for those
new aviation economic activities introduced during 2023. The impact of adding aviation and ground handling activities has vastly
increased the levels of eligible spend under turnover, Capex and Opex the Group is able to report in 2023. The main categories
foreligible spend in 2023 are:
94

Additional disclosures continued
Identified economic activities of the Group
For 2023, the Group has identified a total of 21 economic activities as eligible for reporting as follows:
Aviation (new for 2023)
Manufacturing of aircraft (CM)
Passenger and freight air transport (CM)
Air transport ground handling operations (CM)
Construction and real estate activities
Renovation of existing buildings (CM)
Acquisition and ownership of buildings (CM)
Installation, maintenance and repair of energy–efficiency equipment (CM)
Installation, maintenance and repair of charging stations for electric vehicles in buildings
(and parking spaces attached to buildings) (CM)
Installation, maintenance and repair of renewable energy technologies (CM)
Energy
Electricity generation using solar photovoltaic technology (CM)
Information and communication
Data processing, hosting and related activities (CM)
Computer programming, consultancy and related activities (CA)
Data-driven solutions for GHG emissions reductions (CM)
Technical, scientific and professional activities
Research into innovative low–carbon technologies (CM)
Transport
Transport by motorbikes, passenger cars and light commercial vehicles (CM)
Urban and suburban transport, road passenger transport (CM)
Water supply, sewerage, waste management and remediation
Production of alternative water resources for purposes other than human consumption (CE)
Collection and transport of non-hazardous and hazardous waste (CE)
Material recovery from non-hazardous waste (CM)
Depollution and dismantling of end-of-life products (CE)
Manufacturing
Sale of spare parts (CE)
Preparation for re-use of end-of-life products and product components (CE)
Key:
CA – climate adaptation
CM – climate mitigation
CE – circular economy
In practical terms, identifying taxonomy-eligible economic activities is the first step towards assessing the alignment of economic
activities against the technical screening criteria.
In addition, companies are required to ensure that and explain how taxonomy-eligible turnover, capital expenditure (Capex) or
operating expenditure (Opex) are not double counted where the activities of the Group fall under more than one economicactivity.
Taxonomy-aligned
A taxonomy-aligned activity is one that having identified eligibility, that it contributes substantially to at least one of the six
environmental objectives, does no significant harm to the other environmental objectives and complies with the minimum
safeguards. Details on substantial contribution, do no significant harm and minimum safeguards are given below.
Substantial contribution
The EU Taxonomy Regulation provides detailed substantial contribution criteria to ensure that the associated economic activity has
either a substantial positive impact on one of the six aforementioned environmental objectives or substantially reduces the negative
impact on the environment. The most relevant objective for the Group is Climate Mitigation – however, the addition of the other
fourenvironmental objectives also bought in the categories of Circular Economy, Pollution Prevention and Water which also
hadrelevant activities for the group. These substantial contribution criteria vary by economic activity and each economic activity
can apply to more than one environmental objective.
In 2023, the Group determined that no activities were able to meet the full criteria for taxonomy alignment. This was partly due to
the fact that the basis for alignment is EU legislation and generally goes much further than legal compliance. With our global supply
base, a number of suppliers were unable to provide the detailed evidence required.
For those economic activities introduced via amending Delegated Regulation EU 2021/2139 on 21 November 2023 (aircraft and
ground handling) alignment reporting is only required for the year to 31 December 2024 and as such is excluded from the Group’s
alignment reporting in 2023.
95

Do no significant harm (DNSH)
Together with the criteria to assess if an activity substantially contributes to at least one of the EU Taxonomy Regulations
environmental objectives, the criteria for DNSH specify the minimum requirements that the economic activity should meet to avoid
harming any of the other five environmental objectives. The DNSH criteria differ by economic activity and by environmental
objective.
Any breach of the DNSH criteria would automatically disqualify an activity from being environmentally sustainable and as such lead
to the associated activities not meeting the criteria for alignment.
In addition, there are four generic DNSH criteria that apply to all economic activities, being: (i) climate change adaptation; (ii) water
and marine resources; (iii) pollution prevention and control regarding the use and presence of chemicals; and, (iv) protection and
restoration of biodiversity and ecosystems. These generic criteria apply to several of the Group’s identified economic activities.
Minimum safeguards
The EU Taxonomy Regulation defines the minimum safeguards as due diligence and remedy procedures implemented by a company
that is carrying out an economic activity in order to ensure alignment with the Organisation for Economic Cooperation and
Development Guidelines for Multinational Enterprises (OECD MNEs) and the UN Guiding Principles on Business and Human Rights
(UNGP). The latter includes the principles and rights set out in eight of the ten fundamental conventions identified in the
International Labour Organisation (ILO) Declaration of the on Fundamental Principles and Rights at Work and the International Bill
ofHuman Rights.
The Group complies at all times with the requirements of the OECD MNE. In addition, the Group considers respect and the upholding
of human rights as a critical cornerstone of its operations and is embedded within its Code of Conduct. The Group considers that
itcomplies with the UNGP.
Accordingly, the Group considers that all taxonomy-eligible activities are compliant with the minimum safeguard requirements
oftheEU Taxonomy Regulation.
Technical screening criteria
Each of the detailed technical screening criteria, under each environmental objective, are based on stringent levels of environmental
performance as opposed to transitional activities or alternative acceptable approaches. In certain instances such requirements go
significantly beyond other existing legislation and what is theoretically technically and operationally possible at the reporting date.
Due to their complexity and reliance on EU standards, the technical screening criteria can be difficult to interpret, especially for
activities and key suppliers based outside of the EU.
Capex Plan
The EU Taxonomy Regulation permits Capex and Opex to be treated as taxonomy-aligned when such expenditure form part
ofa‘Capex Plan’. A Capex Plan is defined as a plan that either aims to expand the Group’s taxonomy-aligned economic activities
ortoupgrade pre-existing taxonomy eligible economic activities to taxonomy-aligned economic activities within a five year period.
In addition, the relevant plan must be approved by management and detailed at the taxonomy economic activity level.
Given the uncertainty of definitions and lack of guidance pertaining to Capex Plans within the EU Taxonomy Regulation, the Group
has elected not to report any Capex or Opex as taxonomy-aligned as a result of the Capex Plan provisions.
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Additional disclosures continued
Reporting financially aligned activities under the EU Taxonomy Regulation
The EU Taxonomy Regulation requires the reporting of Key Performance Indicators (KPIs) associated with turnover, Capex and
Opex, both for eligible and aligned activities. Each KPI is calculated as the amount associated with the eligible and aligned economic
activities (the numerator) divided by the total (denominator).
The reporting basis of the EU Taxonomy Regulation differs to our consolidated financial statements, which are prepared in accordance
with IFRS. Such differences include, but are not limited to, not recognising the investment in or results from equity accounted
investments, as well as a very narrow scope definition of Opex. These and other differences result in a lower reported turnover,
Capex and Opex under the EU Taxonomy Regulation when compared to other financial disclosures. Note that full tables as required
in the Taxonomy Regulation are on pages 34-36.
Turnover KPI
The turnover KPI comprises the Total revenue line from the Income statement of the consolidated financial statements and
isdetailed below:
Year to December 31
€ million 2023 2022
Passenger revenue 25,810 19,458
Cargo revenue 1,156 1,615
Other revenue 2,487 1,993
Total taxonomy turnover (denominators) 29,453 23,066
The following table provides a summary of the taxonomy-eligible and taxonomy-aligned revenues by major economic activity, both
as absolute figures (being the numerator) and as a percentage of the aforementioned denominator:
Eligible Aligned
Year to December 31, 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport 26,288 89.3% n/a n/a
Manufacturing of aircraft 683 2.3% n/a n/a
Air transport ground operations 195 0.7% n/a n/a
Other – 0.0% 0 0%
Total taxonomy eligible and aligned turnover 27,166 92.2% 0 0%
Capex KPI
The Capex KPI comprises the Additions to both Property, plant and equipment (note 13 of the consolidated financial statements)
and Intangible assets (note 17 of the consolidated financial statements). The denominators are detailed as follows:
Year to December 31
€ million 2023 2022
Additions to Property, plant and equipment (note 13) 3,753 3,927
Additions to Intangible assets (note 17) 630 593
Total taxonomy Capex (denominators) 4,383 4,520
The numerator for aligned Capex includes those expenditures included the denominator that is any of the following: (i) related
totaxonomy-aligned economic activities; (ii) part of the Capex Plan to expand taxonomy-aligned activities or to allow taxonomy-
eligible economic activities to become taxonomy-aligned; or (iii) the purchase of output from taxonomy-aligned economic activities.
However, given the uncertainty of definitions and lack of guidance pertaining to parts (ii) and (iii), the Group has elected only
toreport financial data relating to taxonomy-aligned economic activities.
97

The following table provides a summary of the taxonomy-eligible and taxonomy-aligned Capex by major economic activity,
bothasabsolute figures (being the numerator) and as a percentage of the aforementioned denominator:
Eligible Aligned
Year to December 31, 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport 3,543 80.8% n/a n/a
Total taxonomy eligible and aligned Capex 3,543 80.8% 0 0%
Opex KPI
The Opex KPI is defined as those costs not capitalised that relate to: (i) research and development; (ii) building renovation measures;
(iii) short-term leases; (iv) maintenance and repair; and (v) and other direct expenditures relating to the day-to-day servicing of
assets of property, plant and equipment.
Other direct expenditures relating to day-to-day servicing of assets of property, plant and equipment is further defined as including:
(i) maintenance materials; (ii) the employee costs of repairing an asset; (iii) the employee costs of cleaning an asset; and, (iv) IT
dedicated to maintenance, other than that capitalised. For the avoidance of doubt, other direct expenditures exclude the following:
(i) overheads; (ii) raw materials; (iii) the employee costs associated with operating the asset; (iv) the cost of managing research and
development projects; and, (v) electricity, fluids, or reagents needed to operate property, plant and equipment.
The Opex KPI definition is narrower than the Group’s definition of operating expenditure and does not capture all of the expenditure
on otherwise eligible activities. The Opex KPI is reconciled to total operating expenditure as follows:
Year to December 31
€ million 2023 2022
Maintenance and repair 2,509 1,409
IT operating costs 365 321
Expenses relating to short-term leases 26 41
Research and development costs 26 1
Total taxonomy Opex (denominators) 2,926 1,772
Other operating expenses outside the scope of the EU Taxonomy Regulation 23,020 20,016
Total operating expenditure per Income statement 25,946 21,788
The numerator for aligned Opex includes those expenditures included the denominator that is any of the following: (i) related to
taxonomy-aligned economic activities; (ii) part of the Capex Plan to expand taxonomy-aligned activities or to allow taxonomy-
eligible economic activities to become taxonomy-aligned; or (iii) the purchase of output from taxonomy-aligned economic activities.
However, given the uncertainty of definitions and lack of guidance pertaining to parts (ii) and (iii), the Group has elected only to
report relating to taxonomy-aligned economic activities.
The Group considers that the definitions of the Opex KPI, when considering the turnover KPI, does not reflect the economic reality
of operating an taxonomy aligned asset. For instance, all revenue associated with the operation of a taxonomy-aligned aircraft meet
the definition of the turnover KPI, however, the costs associated with operating that aircraft are limited to the maintenance and
cleaning of that aircraft.
The following table provides a summary of the taxonomy-eligible and taxonomy-aligned Opex by major economic activity,
bothasabsolute figures (being the numerator) and as a percentage of the aforementioned denominator:
Eligible Aligned
Year to December 31, 2023
Absolute
€million
Percentage of
denominator
Absolute
€million
Percentage of
denominator
Passenger and freight air transport 2,509 85.7% n/a n/a
Total taxonomy eligible and aligned Opex 2,509 85.7% 0 0%
98

Additional disclosures continued
Reporting in 2024
As detailed below, the criteria for assessing the alignment for the new aviation economic activities of Manufacturing of aircraft,
Passenger and freight air transport and Air transport ground handling are complex and will include a number of significant
judgements to be applied in 2024. The judgements applied and the numerical reconciliations detailing the aligned KPIs will be
incorporated into the 2024 reporting.
Methodology/data collection and validation
The Group has established internal processes for the data collection, validation and reporting of taxonomy data through the
established governance structure described in section C.2 of the annual report and accounts. The Group utilises a seven step process
in preparing its taxonomy disclosures:
1 Identification of applicable economic activities – IAG Group Sustainability and IAG Group Finance undertake the initial scoping
astowhich economic activities are applicable to the operations of the Group. Representatives from the sustainability and finance
functions of each operating company validate the completeness of this identification;
2 Determination of assessment factors – where judgement is required to be applied in the application of the EU Taxonomy Regulation,
IAG Group Sustainability and IAG Group Finance develop a standardised approach to such application;
3 Training on existing and new regulation – annually IAG Group Sustainability and IAG Group Finance undertake workshops across
theGroup to ensure all relevant members of the sustainability and finance communities involved in taxonomy are trained on the
existing methodology, changes in regulations and key judgements applied;
4 Standardised reporting – IAG Group Sustainability and IAG Group Finance have developed standardised reporting templates for
thequantification, by economic activity, of taxonomy-eligible as well as the detailed specific technical screening criteria, the DNSH
criteria and the minimum safeguards to derive the taxonomy-aligned quantification;
5 Review and validation – IAG Group Sustainability and IAG Group Finance validate this information across operating companies
andconsolidate the information;
6 Quantitative threshold for reporting – the Group has developed a quantitative threshold of €2 million below which the Group
assumes such taxonomy-eligible activities are not taxonomy-aligned. This assessment is performed at an individual economic
activitylevel and by each operating company; and
7 Reporting – IAG Group Sustainability and IAG Group Finance calculate the associated consolidated KPI metrics for eligibility
andalignment.
Understanding the new aviation economic activities
The Amended Delegated Regulation introduces the economic activities of Manufacturing of aircraft, Passenger and freight air
transport and Air transport ground handling operations for the first time in 2023.
As detailed above, for 2023, the Group is only required to report against the eligibility criteria and not the alignment criteria.
However, the below information reflects the assessment criteria required in 2024 when considering alignment although we
expectfurther guidance from DG Fisma at some point in 2024 on some areas of interpretation and reference data.
Passenger and freight air transport
These new economic activities cover all owned and leased aircraft that the Group operates for the transport of passengers
andfreight.
This section does not attempt to detail all of the technical screening criteria, but the pertinent screening criteria for meeting
alignment are:
a The aircraft has zero direct (tailpipe) CO
2
emissions
1
;
b As at the date of the Amended Delegated Regulation coming into force, those aircraft determined to be ‘compliant aircraft’
2
;
c Subsequent to the date of the Amended Delegated Regulation coming into force, those aircraft determined to be ‘compliant
aircraft’
2
; and with the commitment that a non-compliant aircraft in the fleet is either:
i. Permanently withdrawn from use within six months of delivery of the compliant aircraft; or
ii. Permanently withdrawn from the fleet within six months of delivery of the compliant aircraft, in which case the Replacement
Ratio
3
is applied.
d Or if not determined to be a compliant aircraft, the aircraft can still meet the criteria for eligibility and alignment if it operates
withaminimum of 7 per cent SAF in 2023, increasing by 2 per cent for each subsequent year.
Further technical screening criteria that comes into force from 1 January, 2030, have not been included in the above summary.
The DNSH criteria are limited to the aforementioned generic criteria and certain criteria relating to the prevention of waste
generation, recycling of such assets and restrictions on noise pollution. For these criteria, aircraft manufacturers will need
toprovidesufficient evidence to allow the Group to claim that the DNSH criteria have been met.
Having identified the taxonomy aligned aircraft, the Group is required to report the turnover, Capex and Opex by those
individualaircraft
4
.
99

Judgements the Group considers will be relevant in interpreting and applying the Amended Delegated Regulation
1 Zero direct CO
2
emissions is not defined but is interpreted to be both electric and hydrogen powered aircraft. Both of these
technologies are in their infancy and while the Group expects both technologies to become commercially viable in due course,
theseare not expected before 2035, at the earliest. Accordingly, the Group will be unable to report any aligned spend in the
foreseeable future.
2 A compliant aircraft is defined as those meeting the technical screening and DNSH criteria of the economic activity of the
manufacturing of aircraft. These criteria include, but are not limited to: (i) a specific ratio of CO
2
emissions as a proportion of their
maximum take-off mass; (ii) pollution prevention criteria, such as specific certification regarding noise pollution; and (iii) ensuring
specific hazardous materials are not included in the construction of the aircraft, including certain anti-fouling paints which are
required by law, for safety reasons, to be included in the aircraft. Each aircraft manufacturer shall confirm which of their aircraft
meetthe criteria for being a compliant aircraft and at the date of this report, interactions are ongoing with these manufacturers
tounderstand their ability to comply with the requirements of the EU taxonomy.
3 The Replacement Ratio is defined as the 10-year average of the total global number of aircraft permanently withdrawn from use
divided by the total global number of aircraft delivered.
If the global number of aircraft delivered exceeds the global number of aircraft permanently withdrawn, then the taxonomy aligned
financial metrics of the Group are reduced. As a result, the Replacement Ratio does not reflect the individual activities of the Group
as part of its transition to a low-carbon environment, but instead the entirety of the global aviation sector. Actions that influence
sucha global measure are outside the control of the Group and do not provide enhanced comparability within the airline sector
toinvestors.
4 As of December 31, 2023, the Group operates 582 aircraft within its fleet and does not monitor or report all revenue and expenditure
on an individual aircraft basis. Accordingly, the Group will be required to apply judgement in determining the basis on which to
allocate revenue and expenditure to the associated assets.
The Group is able to monitor revenue denominated metrics by aircraft family (such as across all of the Airbus A321 family) using
metrics such as Average Seat Kilometres (ASKs) and Revenue Passenger Kilometres (RPKs), but cannot monitor the level of such
activity to an individual aircraft. For certain other sustainability reporting obligations, the Group is able to monitor jet fuel
consumption by aircraft, which enables the most reflective indication of activity by asset and accordingly, the Group expects
toallocate revenues and expenditures to each individual asset based on the proportion of fuel consumption or other appropriate
activity measure for those compliant aircraft at an operating company level. No allocation assumptions are required for Capex
assuch expenditure is monitored on an aircraft by aircraft basis.
A reconciliation shall be made to total turnover, Capex and Opex to avoid double counting. Further, to avoid double counting,
allmaintenance expenditure associated with aircraft operations, both capitalised and recorded within operating expenditure,
isincluded in this economic activity and the economic activity of Manufacturing of aircraft (see below) will only include the revenues
associated with the performance of maintenance activities to parties external to the Group.
The Group expects the Commission to provide further clarification and guidance in the second half of 2024 detailing how to
applythese criteria. Accordingly, the aforementioned judgements are subject to change and it is possible that further judgements,
notdetailed above, will be required.
100

Additional disclosures continued
Manufacturing of aircraft
The economic activity for manufacturing of aircraft covers a wider range of activities including: (i) manufacture; (ii) repair;
(iii)maintenance; (iv) overhaul; (v) retrofitting; and (vi) repurposing and upgrade of aircraft and aircraft parts and equipment.
Whilethe Group does not manufacture aircraft, all other aspects of the activities detailed in parts (ii) to (vi) are undertaken
bytheGroup, both internally on the operating aircraft and externally to third parties as part of the maintenance, repair and overhaul
(MRO) business operations.
The EU Taxonomy Regulation does not provide definitions as to the nature of these sub-activities and they do not align with
theindustry terminology. Absent such guidance, the Group has considered that all of the MRO business operations of the Group
would fall under this economic activity, including aircraft airframes, engines and other components of aircraft.
From a technical screening perspective, points (a) to (c) as described above relating to Passenger and freight air transport
economic activities also apply. In addition, the DNSH criteria are limited to the aforementioned generic criteria and certain criteria
relating to the prevention of waste generation, maximising the reuse and use of secondary materials and restrictions on noise
pollution.
Having identified the taxonomy aligned activities, the Group is required to report the turnover, Capex and Opex by those individual
services provided. The Group’s accounting policy for maintenance events differs between those major maintenance events and
those that are considered non-major, with further details given below:
• Major maintenance events for owned aircraft are capitalised as incurred and monitored on a project-by-project basis;
• Major maintenance events for leased aircraft are provided for in advance of the event and monitored on a project-by-project basis;
and
• Those maintenance events considered to be non-major by nature are expensed as incurred and the associated expenditure
isnotmonitored on a project-by-project basis. Accordingly, for the purpose of reporting taxonomy-aligned expenditure, the total
expenditure is allocated based on the total number of maintenance events on compliant aircraft as a proportion of total number
ofnon-major maintenance events.
The provision of MRO services to third parties is monitored on a project-by-project basis. To ensure that maintenance activities
onaircraft are not double counted, only revenues arising from transactions with parties external to the Group are included in this
economic activity. All Capex and Opex associated with the MRO business operations are included within the economic activity
ofPassenger and freight air transport. In addition, where one operating company provides MRO services to another operating
company, then the intercompany expenditure incurred and the intercompany revenue earned by the provider of the services
iseliminated on consolidation.
Air transport ground handling operations
The economic activity for air transport ground handling operations covers a wider range of activities that occur within the
operations of the Group, including, but not limited to: (i) pushback tugs; (ii) equipment for baggage and freight handling;
(iii)vehicles for aircraft marshalling; (iv) equipment for passenger boarding; (v) de-icing equipment; and, (vi) equipment for catering.
The technical screening criteria are limited to only those vehicles that have zero CO
2
emissions from the tailpipe, with the DNSH
criteria limited to the aforementioned generic criteria and certain criteria relating to the prevention of waste generation, recycling
ofsuch assets and protection of water resources associated with de-icing activities.
Across the economic activity, the Group has several thousand individual assets for which it is not possible to identify the revenue
and expenditure by individual asset. As such the Group expects to allocate turnover, Capex and Opex figures based on the
proportion of zero emission vehicles compared to the overall ground handling fleet. Given the timing of the year when the Amended
Delegated Regulation came into force, the Group will continue to assess and define the allocation basis for ground handling activities
for reporting in 2024.
Economic Activity - Contribution to Multiple Environmental Objectives
The following table details the most relevant environmental objectives for the Group’s turnover, Capex and Opex in line with Annex 5
to Regulation (EU) 2020/852 and the associated Delegated Regulation (EU) 2021/2178.
Proportion of Turnover / Total turnover Proportion of CapEx / Total CapEx Proportion of OpEx / Total OpEx
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
Taxonomy-aligned
per objective
Taxonomy-eligible
per objective
CCM 0.0% 92.0% 0.0% 81.0% 0.0% 86.0%
CCA 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
WTR NA
1
0.0% NA
1
0.0% NA
1
0.0%
CE NA
1
0.0% NA
1
0.0% NA
1
0.0%
PPC NA
1
0.0% NA
1
0.0% NA
1
0.0%
BIO NA
1
0.0% NA
1
0.0% NA
1
0.0%
1 For 2023 the alignment criteria do not apply
Climate Change Mitigation: CCM
Climate Change Adaptation: CCA
Water & Marine Resources: WTR
Circular Economy: CE
Pollution Prevention & Control: PPC
Biodiversity & Ecosystems: BIO
101

Additional disclosures continued
KPIs of Non-Financial Undertakings
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year N Year 2023 Substantial Contribution Criteria DNSH criteria (‘Does Not Significant Harm’) (h)
Economic Activities (1)
Code
(2)
Turnover
(3)
Proportion
of Turnover,
year 2023
(4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion
ofTaxonomy
aligned (A.1.)
or eligible
(A.2.)
turnover,
year 2022
(18)
Category
enabling
activity
(19)
Category
transitional
activity
(20)
Text
Currency
€ million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally
sustainable activities
(Taxonomy-aligned) NA 0 0% - - - - - - - - - - - - - 0%
Turnover of
environmentally
sustainable activities
(Taxonomy-aligned) (A.1) 0% 0% - - - - - - - - - - - - 0%
Of which Enabling 0 0% 0% - - - - - - - - - - - - 0% E
Of which Transitional 0 0% 0% - - - - - - - 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
Manufacturing of aircraft
CCM
3.21 683 2.3% EL N/EL N/EL N/EL N/EL N/EL NA
Passenger and freight
airtransport
CCM
6.19 26,288 89.3% EL N/EL N/EL N/EL N/EL N/EL NA
Air transport ground
handling operations
CCM
6.20 195 0.7% EL N/EL N/EL N/EL N/EL N/EL NA
Turnover of Taxonomy-
eligible but not
environmentally
sustainable activities (not
Taxonomy-aligned
activities) (A.2) 27,166 92.2% 92.2% 0% 0% 0% 0% 0% 0%
A. Turnover of Taxonomy
eligible activities
(A.1+A.2) 27,166 92.2% 92.2% 0% 0% 0% 0% 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-
non-eligible activities 2,287 7.8%
TOTAL 29,453 100%
EL – eligible
N/EL – non-eligible
102

Air transport ground handling operationsProportion of CapEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year
2023
Financial year N Year 2023 Substantial Contribution Criteria DNSH criteria (‘Does Not Significantly Harm’) (h)
Economic Activities (1)
Code
(2)
CapEx
(3)
Proportion
of CapEx,
year 2023
(4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy
aligned (A.1.)
or eligible
(A.2.) CapEx,
year 2022
(18)
Category
enabling
activity
(19)
Category
transitional
activity
(20)
Text
Currency
€ million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
CapEx of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1) 0 0% 0% - - - - - - - - - - - - 0%
Of which Enabling 0 0% 0% - - - - - - - - - - - - 0% E
Of which Transitional 0 0% 0% - - - - - - - 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
Passenger and freight air
transport
CCM
6.19 3,543 80.8% EL N/EL N/EL N/EL N/EL N/EL NA
CapEx of Taxonomy-
eligible butnot
environmentally
sustainable activities
(not Taxonomy-aligned
activities) (A.2) 3,543 80.8% 80.8% 0% 0% 0% 0% 0% 0.3%
A. CapEx of Taxonomy
eligible activities
(A.1+A.2) 3,543 80.8% 80.8% 0% 0% 0% 0% 0% 0.3%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-
non-eligible activities 840 19.2%
TOTAL 4,383 100%
EL – eligible
N/EL – non-eligible
Additional disclosures continued
103

Additional disclosures continued
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities – disclosure covering year 2023
Financial year N Year 2023 Substantial Contribution Criteria DNSH criteria (‘Does Not Significantly Harm’) (h)
Economic Activities (1)
Code
(2)
OpEx
(3)
Proportion
of OpEx,
year 2023
(4)
Climate Change
Mitigation (5)
Climate Change
Adaptation (6)
Water (7)
Pollution (8)
Circular
Economy (9)
Biodiversity (10)
Climate Change
Mitigation (11)
Climate Change
Adaptation (12)
Water (13)
Pollution (14)
Circular
Economy (15)
Biodiversity (16)
Minimum
Safeguards (17)
Proportion of
Taxonomy
aligned (A.1.)
or eligible
(A.2.) OpEx,
year 2022
(18)
Category
enabling
activity
(19)
Category
transitional
activity
(20)
Text
Currency
€ million %
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL
Y; N;
N/EL Y/N Y/N Y/N Y/N Y/N Y/N Y/N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
OpEx of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1) 0 0% - - - - - - - - - - - - - 0%
OpEx of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1) 0 0% 0% - - - - - - - - - - - - 0%
Of which Enabling 0 0% 0% - - - - - - - - - - - - 0% E
Of which Transitional 0 0% 0% - - - - - - - 0% T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (g)
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
EL; N/
EL
Passenger and freight air
transport
CCM
6.19 2,509 85.7% EL N/EL N/EL N/EL N/EL N/EL NA
OpEx of Taxonomy-
eligible butnot
environmentally
sustainable activities
(not Taxonomy-aligned
activities) (A.2) 2,509 85.7% 85.7% % % % % % 3.5%
A. OpEx of Taxonomy
eligible activities
(A.1+A.2) 2,509 85.7% 85.7% % % % % % 3.5%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-
eligible activities 417 14.3%
TOTAL 2,926 100%
EL – eligible
N/EL – non-eligible
104

Additional disclosures continued
C. Table of contents
(F) means fully compliant, (P) means partially compliant. (1) means internal framework: see corresponding pages.
Area Reporting criteria/GRI standard Page
General Information
Business model description GRI 2-6 (2021) (P) 1
Organisation and structure GRI 2-6 (2021) (P) 1
Market presence GRI 2-1,6 (2021) (P) 1
Objectives and strategies GRI 2-1, 22 (2021) (P) 36
Main factors and trends that may affect future performance GRI 3-3 (2021) (P) 36
Reporting framework used GRI 1 (2021) 10
Materiality assessment GRI 3-1/2 (2021) (P) 8, 19, 36
Social & employee related matters
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 49, 58
Main risks related to these issues GRI 3-3 (2021) (P) 49, 58
Employment
Total number and distribution of employees by sex, age, contract type, full-time/part-time,
professional category
GRI 2-7 (P), 405-1 (P) 79-80
Total number of employees and distribution by country/region and collective bargaining
agreement
GRI 2-7 (P), 2-30 (P) 80
Total number of employment contracts distribution and annual average distributed
bygender, age and job category
GRI 2-7 (2021) (P) 81
Total number and attrition ratio of dismissals and voluntary leavers by gender,
age and job category
GRI 3-3 (2021), 401-1 (P) 85
Average remuneration broken down by gender, age and job category GRI 405-2 (P) 87
Salary gap GRI 3-3 (2021), 405-2 87
Average remuneration of board members and directors GRI 3-3 (2021), 405-2 88
Policies to allow employees to disconnect from work GRI 3-3 (2021) (P) 33-34
Number of employees with disabilities GRI 3-3 (2021) (P), 405-1 (P) 86
Working organisation
Working hours organisation GRI 3-3 (2021) (P) 86
Absenteeism rates GRI 3-3 (2021), 403-9 (P) 83
Measures to promote work-life balance GRI 3-3 (2021), 401-3 33-34
Health and safety
Occupational health and safety conditions GRI 3-3 (2021) (P), 403-1a, 403-8 34
Number of workplace accidents and accident rates broken down by gender GRI 403-9/10 (P) (1) 83
Occupational illness cases broken down by gender GRI 403-9,/10 (P) 83
Labour relations
Social dialogue organisation GRI 3-3 (2021) (P) 40
Percentage of employees covered by collective agreements broken down by country GRI 2-30 (2021) (F) 80
Results of collective agreements, especially in the field of health and safety GRI 3-3 (2021) (P), 403-4 (P) 34
Description of the mechanisms and procedures the company has in place to promote
theinvolvement of workers in the management of the company, in terms of information,
consultation and participation
GRI 3-3 (2021) (P) 40
Training
Policies implemented GRI 404-2 (P) 40
Total number of training hours broken down by employee category GRI 3-3 (2021), GRI 404-1 40, 82
Universal accessibility of people with disabilities
Universal accessibility of people with disabilities GRI 3-3 (2021) (P) 34
Equality
Measures taken to promote equal treatment and opportunities between women and men GRI 3-3 (2021) (P) 31-33
Equality plans GRI 3-3 (2021) (P) 31-33
Measures taken to promote employment GRI 3-3 (2021) (P) 40
Protocols against sexual harassment and on the basis of gender GRI 3-3 (2021) (P) 40
Integration and universal accessibility for persons with disabilities GRI 3-3 (2021) (P) 34
Policy against all types of discrimination and policy on diversity GRI 3-3 (2021) (P) 40
* difference between men’s and women’s median pay, divided by men’s median pay.
105

Area Reporting criteria/ GRI standard Page
Environmental matters
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 38
Main risks related to these issues GRI 3-3 (2021) (P) 43
Environmental management
Information of the current and foreseeable impact of the Company’s activities on the
environment
GRI 3-3 (2021) (P) 73
Environmental assessment and certification procedure GRI 3-3 (2021) (P) 25, 27
Resources devoted to environmental risks prevention GRI 3-3 (2021), (1) 43
Implementation of the precautionary principle GRI 2-23 (2021) 43
Amount of provisions and warranties for environmental risks GRI 3-3 (2021) (P), (1) 43
Pollution
Measures to prevent, reduce or repair emissions (including noise and light pollution) GRI 3-3 (2021) (P), 305-7 (P), (1),
light pollution not material
12, 27
Circular economy and waste prevention and management
Measures related to prevention, recycling, reuse and other form of waste recovery and disposal GRI 306-1 /2/3/5 (2020) (P) 25
Actions to avoid food waste GRI 3-3 (2021) (P), 306-4 (P) 25
Sustainable use of resources
Water consumption GRI 303-1/3/5 (P) 78
Raw materials consumption Not material 36
Direct and indirect energy consumption GRI 302-1/3 (F) 16
Measures to improve energy efficiency GRI 3-3 (2021) (P), 201-1 (F) 12, 18
Use of renewable energy GRI 302-1 (P) 16
Climate change
Relevant aspects regarding greenhouse gas emissions (GHG) GRI 305-1/2/3 (F) 8
Measures to adapt to climate change GRI 3-3 (2021), 201-2 (2021) (P) 19-22
Objective related to GHG reduction GRI 3-3 (2021) (P), 305-5 (F) 6, 12
Biodiversity
Measures to preserve or restore biodiversity Not material 78
Impacts caused by activities or operations in protected areas Not material 78
106

Additional disclosures continued
Area Reporting criteria/ GRI standard Page
Respect for human rights
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (F) 35
Main risks related to these issues GRI 3-3 (2021) (P) 35
Specific contents
Implementation of human rights due diligence procedures GRI 2-23/26 (2021) (P), 410-1 (P), 412-1/3 (P) 35
Measures to prevent and manage potential human rights abuses GRI 3-3 (2021) (P), 406-1 (P) 35
Reported cases of human rights violations GRI 3-3 (2021) (P) 35
Promotion and compliance with ILO´s provisions GRI 407-1 (P) 40
Elimination of forced or compulsory labour GRI 409-1 (P) 40
Effective abolition of child labour GRI 408-1 (P) 40
Anti-corruption and bribery matters
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 42
Main risks related to these issues GRI 3-3 (2021) (F) 42
Specific contents
Measures to prevent corruption and bribery GRI 3-3 (2021), 2-23/26 (2021) (P), 205-1/3 42
Measures to prevent money-laundering GRI 3-3 (2021) (P), 2-23/26 (P), 205-1/3 42
Contributions to not-for-profit organisations GRI 2-28 (2021) (P), 201-1, 415-1, (1) 35
Other information on the Company
Management approach
Description of the applicable policies and the result of these policies GRI 3-3 (2021) (P) 45
Main risks related to these issues GRI 3-3 (2021) (P) 49
Commitment to sustainable development
Impact of the Company’s activities on employment and local development GRI 3-2 (2021) (P), 203-2 (P), 204-1 (P) 90
Impact of the Company’s activities on local populations and territories GRI 3-3 (2021) (P), 413-1/2 (P), 411-1 (P), (1) 90
Relations with actors in the local communities and forms of engagement with them GRI 2-29 (2021) (P), 413-1 (P) 22, 35
Partnership or sponsorship actions GRI 3-3 (2021) (P), 201-1 (F) 22, 35
Sustainable supply chain management
Inclusion of social, gender equality and environmental issues in the procurement policy GRI 3-3 (2021) (P), (1) 40
Consideration of suppliers’ and subcontractors’ social and environmental
responsibility in relations with them
GRI 2-6 (2021) (P), 308-1 (P), 414-1 (P), (1) 40
Supervision and audit systems GRI 2-6 (2021) (P), 308-2 (P), 414-2 (P), (1) 40
Consumer relationship management
Measures to protect consumer health and safety GRI 3-3 (2021) (P), 416-1 (P) 34, 91
Claims systems and complaints GRI 3-3 (2021) (P), 418-1 (P), (1) 91
Complaints received and their outcome GRI 3-3 (2021) (P), 418-1 (P) 91
Tax information and transparency
Profits broken down by country GRI 3-3 (2021) (P), 207-4 (P) 92
Corporate income tax paid GRI 3-3 (2021) (P), 201-1 (P), 207-4 (P) 92
Public subsidies received GRI 201-4 (P), Accounting criteria 91
107

LIABILITY STATEMENT OF DIRECTORS FOR THE PURPOSES ENVISAGED UNDER ARTICLE 8.1.b OF SPANISH ROYAL
DECREE 1362/2007 OF 19 OCTOBER (REAL DECRETO 1362/2007).
At a meeting held on 28February 2024, the directors of International Consolidated Airlines Group, S.A. state that, to the best of their
knowledge, the individual and consolidated financial statements for the year to 31 December 2023, prepared in accordance with the
applicable set of accounting standards and in single electronic format, give a true and fair view of the assets, liabilities, financial
position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole, and that the
individual and consolidated management reports include a fair review of the development and performance of the business and the
position of the Company and the undertakings included in the consolidation taken as a whole, together with the description of the
principal risks and uncertainties that they face.
28February 2024
Javier Ferrán Larraz
Chairman
Luis Gallego Martín
Chief Executive Officer
Giles Agutter Peggy Bruzelius
Eva Castillo Sanz Margaret Ewing
Maurice Lam Heather Ann McSharry
Robin Phillips Emilio Saracho Rodríguez de Torres
Lucy Nicola Shaw
Statement of Directors’ responsibilities

FORMULATION OF THE CONSOLIDATED FINANCIAL STATEMENTS AND OF THE CONSOLIDATED MANAGEMENT
REPORT FOR THE YEAR 2023
The Board of Directors of International Consolidated Airlines Group, S.A., in compliance with the provisions of Article 253 of the
Capital Companies Law and of Article 37 of the Commercial Code, proceeded to formulate on 28February 2024 the consolidated
financial statements and the consolidated management report of the company for the year to 31 December 2023, in single electronic
format according with the Commission Delegated Regulation (EU) 2018/815 of 17 December 2018.
In witness whereof, the members of the Board of Directors of International Consolidated Airlines Group, S.A. signed below on
28February 2024:
Javier Ferrán Larraz
Chairman
Luis Gallego Martín
Chief Executive Officer
Giles Agutter Peggy Bruzelius
Eva Castillo Sanz Margaret Ewing
Maurice Lam Heather Ann McSharry
Robin Phillips Emilio Saracho Rodríguez de Torres
Lucy Nicola Shaw