What's going on?

International Airlines Group (IAG), the company that owns British Airways (BA) and Iberia, said profit in 2015 was 65% higher than in 2014. It was better than investors were expecting, but the company gave conservative guidance for 2016 � and that contributed to the shares selling off 4%.

What does this mean?

Cheaper fuel costs certainly helped as fuel clearly is a big cost for an airline (although some airlines buy their fuel years in advance and so don�t benefit immediately from falling prices). Profit was also boosted by an almost 10% increase in the number of IAG passengers and a continued effort to improve the performance of Iberia (primarily through cost-cutting). Its newly acquired low-cost carrier, Vueling, also posted increased profit.

Why should I care?

The bigger picture: IAG is Europe�s most valuable airline � and there are good reasons why. It went from a small loss in 2012 to a profit of close to �2 billion in 2015. In the past 5 years, IAG�s stock price has doubled while the stock prices of main legacy competitors, Air France-KLM and Lufthansa, have declined. Clearly, management has done a pretty good job.

For you personally: Fierce competition should keep tickets relatively cheap. Whether the airline is a legacy carrier, like BA, or a low-cost carrier, like EasyJet, the customer experience is now quite similar: in both cases, most charge you for reserving seats and checking luggage, for example. Moreover, with fuel prices so low and therefore profits higher, airlines should be able to cut prices to compete with each other. That should mean cheaper tickets for the consumer; although it could instead result in more mergers in the airline industry so that the remaining companies have a greater ability not to cut prices.