IAG airline group: meets targets, outperforms Lufthansa and Air France-KLM, but still lags Ryanair

IAG's performance since it last suffered a loss in 2012 has been impressive. In 2017 it made its highest ever net profit and operating profit, and its operating margin again led the way for European legacy airlines. Lufthansa and Air France-KLM have also improved since the global financial crisis, but IAG's margins leave its rivals in its wake.

IAG and all its individual airlines - Aer Lingus, British Airways, Vueling and Iberia - are now generating returns above their cost of capital. Moreover, its ability to lower debt while also making increased cash returns to shareholders is fairly rare in the global airline sector.

IAG is now meeting its financial targets, but will be keen to maintain its momentum. It may be Europe's most profitable legacy airline group, but its low cost rival Ryanair regularly generates much higher margins. IAG and its management are unlikely to be happy with standing still while there is more to be achieved.