IAG shares fall as Virgin Atlantic warns of slowing US demand

Virgin Atlantic has warned of a slowdown in demand for transatlantic travel, prompting a further fall in the share price of IAG, the owner of its rival British Airways.

- Gwyn Topham

Both of the long-haul carriers lean heavily on lucrative routes between London and North America to boost their profits, and analysts have warned that economic uncertainty and growing tension between the US and Europe could start to harm their business.

Virgin Atlantic, Sir Richard Branson's airline, said trading had been strong at the start of 2025, as it announced a return to profit for the first time since the Covid pandemic in its full-year results for 2024.

Shai Weiss, the airline's chief executive, said 2024 was "a turning point for Virgin Atlantic and the culmination of our transformation", and that 2025 would bring new transatlantic routes to Toronto and Cancun as well as a new Virgin clubhouse in Los Angeles.

But in accompanying comments, Virgin Atlantic's chief financial officer, Oli Byers, said: "In the last few weeks we have started to see some signals that US demand has been slowing."

Byers indicated that the slowdown was hitting bookings in the second quarter, a peak period of travel. He added: "We think that is quite a natural reaction to general consumer uncertainty."