SPEECH BY ANTONIO VAZQUEZ,

CHAIRMAN, INTERNATIONAL AIRLINES GROUP

Annual General Meeting,

Thursday June 20, 2019

I. DELIVERING

Ladies and gentlemen, shareholders,

I have the honour of addressing you as the chairman of IAG to report on the eighth year in the life of our Group.

Darwin said that ‘it is not the strongest or the most intelligent species that survives, but the one that adapts best to change’ and our determination to adapt to change has undoubtedly been one of the main driving forces behind the profound transformation of our Group’s companies during this period.

In 2012 I began my address at our first annual meeting by thanking the shareholders of and British Airways for their confidence in a Group that was then made up of only two airlines, British Airways and Iberia, with the latter in the midst of restructuring.

Today, IAG has become a family of five airline brands, with 582 aircraft (233 more than in 2011) and carrying 113 million passengers a year (more than twice as many as in 2011).

Operating profit from our operations have more than sextupled to 3,230 million last year. That is 9.5 per cent more than in 2017 and our revenues have risen from 16,300 million euros in 2011 to 24,400 million euros in 2018.

The figures speak for themselves. Not only did we achieve a record operating profit in IAG's history last year, but all of our airlines contributed to it and improved their results over the previous year. In addition, in the first quarter of 2019 we were one of the few European airlines to record an operating profit.

Our financial strength earned us an investment grade rating from both Standard & Poor’s and Moody’s in 2018. This is our first credit rating at Group level. It confirms the strength of IAG's balance sheet and allows us to have access to a wide range of alternative sources of financing at a lower cost.

However, despite the solid fundamentals of our company and the positive sentiment about performance and earnings perspectives from most analysts in the sector, the performance of our share price has not been so positive.

The commercial aviation sector in general, and our Group in particular, are trading at earnings ratios that clearly do not reflect the value of our company and underestimate the potential of our business model.

II. OUR COMMITMENT TO OUR SHAREHOLDERS

Nevertheless, we continue to work with great enthusiasm every day to fulfil our mission of remunerating our shareholders by maintaining high returns on investment. The current IAG share price levels and returns to our investors amount to a return of 12 per cent, which means that we are among the top companies listed on the FTSE 100 and IBEX 35.

Since 2015, we have paid out a total of approximately 3,800 million euros to our shareholders, which is more than one third of IAG's market capitalisation. Of this figure, some 1,000 million euros is subject to your approval today for distribution this July, and if we look at the earnings per share metric, IAG is definitely an exceptional case: since 2013, our earnings per share have increased on average by more than 40 per cent each year.

We have always been determined to remunerate our shareholders properly and sustainably, and the practice we have maintained over the last few years is an obvious way to thank them for their trust while fulfilling our commitment.

III. BREXIT

Last year at our Annual General Meeting I touched upon the challenges of BREXIT. As we have said on a number of occasions, we remain confident that the United Kingdom and the European Union will reach a broad agreement on air transport.

Europe's liberalisation has brought enormous benefits to around one billion consumers each year, sustaining thousands of jobs and contributing to the economic and social well-being of all European countries.

In this respect, we very much welcome the decision taken by the European Union and the United Kingdom to guarantee the continuity of flights from European-licensed airlines to the United Kingdom and vice versa after BREXIT, so that air services will continue to operate normally.

At the same time, in compliance with European Union connectivity regulations, in April our airlines submitted their ownership and control plans to the respective national authorities in , Ireland, France and Austria. It is with great satisfaction that we have received confirmation from the regulators of these countries that our airlines’ plans in the event of a no-deal BREXIT are compliant with the applicable EU regulations on ownership and control. These evaluations have been sent to the European Commission. in order to ensure that the Group's interests are protected, we have maintained an ongoing dialogue with the authorities and governments of the Member States in which our airlines operate and with the competent bodies of the EU.

I would like to point out that IAG is a Spanish company and that its airlines have operating licences issued since they began their operations with long established businesses in Spain, Ireland, France and the United Kingdom and, more recently, in Austria. All told, our companies directly employ more than 64,700 people, the vast majority of whom are European citizens.

IV. CHALLENGES FACING OUR INDUSTRY

Recently, the International Air Transport Association (IATA) lowered its profit forecast for the global industry in 2019 to 28,000 million dollars, compared to the 35,500 million dollars estimated in December last year.

According to IATA, the economic environment of the industry has been affected by the increase in fuel prices and the substantial weakening of world trade.

In 2019, the return on capital invested globally is expected to be 7.4 per cent, compared to 7.9 per cent in 2018. In this respect we continue to make a difference, as the successful management of IAG has led to a return on capital invested of 16.6 per cent last year, more than double the industry level.

In Europe, IATA forecasts that this year the region's airlines will generate a net profit of 8,100 million dollars, down from 9,400 million dollars last year. This report also highlights the fact that, in addition to the strong competition at European level, there has been poor air traffic management on the part of the responsible bodies. As a result, delay minutes increased by 61 per cent in 2018, causing costs to increase by two billion dollars.

V. GLOBAL CONSOLIDATION

Consolidation is a process that is taking place on a global level. Throughout the world the industry is consolidating, enabling it to achieve the levels of profitability needed to invest in new aircraft, substantially increase connectivity and offer more and better services to consumers, in addition to adequately rewarding shareholders.

Thanks to consolidation, inefficient businesses have been replaced by business models that create value for both consumers and shareholders. Our industry has gradually consolidated over the last few years through mergers and acquisitions, through alliances and through the redistribution of assets of inefficient companies that have ceased to operate.

IAG has been a driver of this consolidation process with the acquisition and integration of BMI, Vueling and Aer Lingus. In addition, it has been a pioneer in the development of joint businesses. Nine years ago we established a strong transatlantic alliance that includes British Airways, Iberia, American Airlines and Finnair, and which we expect will soon also include Aer Lingus. British Airways and Iberia also have joint businesses with Japan Airlines and British Airways with Qatar Airways.

We are very pleased that Brazil, Uruguay and Colombia have approved the joint business agreement between British Airways, Iberia and LATAM. However, I cannot fail to mention that we were disappointed by the recent decision of the Supreme Court of Chile to reject the approval of this agreement that had previously been granted by the Free Competition Tribunal of that country. This will mean that Chilean consumers will not be able to enjoy the benefits this agreement would have brought them, including better connections between Europe and Chile, more flight options and better benefits for frequent flyers. We are now assessing the situation in order to decide what steps to take next.

VI. CORPORATE GOVERNANCE

Although detailed information is available in our annual report and in the documentation available on our website, I would like to take this opportunity to share with you some corporate governance considerations.

Throughout our eight-year history, we have always sought to achieve the highest standards of corporate governance, and that remains our firm commitment as a Board. This commitment has been recognised this year with the first edition of the Manuel Olivencia Award for Good Corporate Governance. This award, organised by the Cuatrecasas Foundation, bears the name of the man who can undoubtedly be considered the father of good governance in Spain, and we are certain that it is destined to be highly regarded. Because of this, we are deeply honoured and grateful for this recognition.

I would now like to draw your attention to the work we are doing to adapt to the new recommendations on corporate governance published in the UK. As you know, because IAG is listed in Spain and the United Kingdom, it must meet the corporate governance requirements of both markets.

The approval in July 2018 of a new Corporate Governance Code has been and continues to be a clear focal point for the Board. This new Code represents a profound renewal of the foundations of corporate governance. It takes them to a new level, in which companies’ culture, relations with all their stakeholders and their role in society stand as key issues for the creation of sustainable value. I must say that both the Board and I personally, as well as the IAG management team, share the guiding principle of this new code: that companies are not isolated entities, but are closely linked to the world in which they operate, and that, in order to be successful in the long term, boards and the companies they run need to build and maintain productive relationships with a broad spectrum of stakeholders.

This year it is time to say goodbye to three people who have played an important role in our Board. Today we say goodbye to Enrique Dupuy, executive director and chief financial officer of IAG since its inception. Enrique has been a key player in the creation of this Group and in its sound financial performance. The entire Board would like to take this opportunity to thank you for your dedication and professionalism all these years, and for the generosity you have shown until the very last day you have been with us.

As we announced last April 15, Steve Gunning will succeed Enrique as executive director and chief financial officer of the Group, subject to the approval of this Meeting. Based on his solid professional track record within the Group, I am convinced that we will have a great CFO and a valuable addition to our Board.

Constantly focused on giving our companies a long-term vision, Marjorie Scardino has always contributed to the debates of the Board and its Committees with an open and innovative perspective, alongside her passion for business being immersed in a broad social context.

I would like to refer now to Patrick Cescau, a member of the board since the IAG’s creation. We have worked together throughout this journey and especially during the years in which Patrick was Senior Independent Director. I simply must share with you today my conviction that, because of his brilliance, his dedication and the way he interacts with his colleagues on the Board and with the management team, directors like Patrick are a gift for any board of directors and an iron-clad guarantee for the shareholders of any company.

To fill these vacancies on our Board, we are pleased to propose the appointment of Margaret Ewing and Javier Ferrán. Now that you have all had the opportunity to weigh up the information relating to these appointments and the selection process, let me just highlight how strong these candidates are. I'm very pleased to have both of them on our Board and I'm sure they will measure up to the great professionals who we say goodbye to today.

In 2018, IAG achieved virtually full compliance with the recommendations included in the Spanish Code of Good Governance of Listed Companies, with the sole exception of the recommendation relating to other board committees, with which we are partially compliant insofar as the composition of our Safety Committee does not fully meet the provisions of the Code.

I do not want to end my discussion of corporate governance without mentioning that last February, the Board had to set a limit on non-European interests in IAG’s capital pursuant to the provisions of Article 11.8 of our Bylaws. The Company regularly monitors the amount of non-European holdings and expects to be in a position to lift this limitation as soon as the percentage of non-European interests is at an appropriate level.

VII. SUSTAINABILITY

At IAG we are well aware that our industry cannot aspire to sustainable growth unless it seriously addresses its environmental responsibilities. We have always said that IAG is determined to lead the sector's efforts to combat climate change.

We are proud of our achievements in reducing emissions, but we are also aware that much remains to be done.

Aviation was the first sector to agree to reduce net carbon emissions by introducing a limit from 2020 and a 50 per cent reduction by 2050. Our industry also created the world's first carbon offsetting mechanism, CORSIA, a process in which IAG has played a key role.

In the last 10 years, our industry has invested a trillion dollars in more than 12,200 new aircraft that are as much as 20 per cent more efficient than the aircraft they replace. This means that today, a flight produces half the CO2 emissions it did in 1990.

Over the next five years, our Group's airlines will receive more than 145 new generation aircraft, bringing efficiencies of up to 20 per cent in CO2 emissions and a 50 per cent reduction in noise levels.

On an operational level, in the last six years the Group’s companies have reduced their CO2 emissions per passenger-kilometre by 8.6 per cent. In 2018, for example, our efficiency programmes achieved a reduction of 65,000 tons of carbon emissions and we are moving ahead with the implementation of GoDirect Fuel Efficiency software, to enable us to optimise fuel use through data analysis and monitor our airlines’ operational performance, which will generate significant improvements in the coming years.

The production of renewable fuel is an essential issue. For this reason, IAG will invest a total of 400 million dollars in sustainable fuel over the next 20 years. In this context, in 2018 we announced the start-up of the first European domestic waste recycling plant for conversion into aviation fuels, which will commence operations in 2024. The facility will be built in the UK as part of a project we are undertaking in partnership with Velocys, a world leader in sustainable fuel technology.

In our quest to find new solutions for sustainable travel, we recently selected a team from University College as winner of the 2119 Future of Fuels initiative. This is a project that we launched last year as part of British Airways' centenary preparations and we invited a number of British universities and academics in the fields of aerospace, fuel and biotechnology to take part. We presented them with the challenge of coming up with a way to make a five-hour flight with zero CO2 emissions.

But our determination goes far beyond that. Last December, together with other international organisations, IAG urged the UK government to support the goal of zero net emissions by 2050. At the same time, we have repeatedly called on the European Union to reform regional airspace, which would make it possible to reduce emissions by 12 per cent, which is equivalent to 18 million tons of CO2 per year.

The Single European Sky is an initiative that has been delayed by 18 years due to opposition from some member states. However, it is time to set national interests aside because the sustainability of Europe is at risk. The modernisation of the European sky is an issue that must be addressed with the utmost urgency if the European Union is to play its proper role in the fight against climate change.

VIII. CONCLUSION

I began my address by talking about transformation, evolution and change. In these eight years we have undertaken a profound transformation of our business, expanding our services, offering innovative products to our passengers and creating sustainable value for our shareholders.

We are a dynamically managed company that has put the customer at the centre of its transformation. Our unique business model has shaken up the market precisely because it burst onto the scene like a start-up, calling into question the established order. And year after year it has shown its strength, flexibility and resilience.

Ladies and gentlemen, shareholders, today we can proudly say that we have delivered.

We promised that we would generate sustainable returns to our shareholders and we are doing so; we said we would meet our financial targets and we have done so; we committed ourselves to digital transformation and today technology and digital solutions are at the heart of all our processes; we are working for sustainable development and we continue to reduce carbon emissions.

Most importantly, our airlines continue to invest and evolve to meet the changing needs of their customers.

As always, I would like to thank the great work done by the people who are part of IAG and its management team, and I also take this opportunity to thank the Board of Directors for the constant support they have given us over the years.

It really is a cause of pride to see the achievements we have accomplished. We are aware of the challenges we face, but we are tackling our work with enthusiasm and we seek to make the most of all the opportunities that the future holds in store for us.

IAG is built to succeed and we hope you will stay with us as we continue our journey.

Thank you very much.