London: IAG, owner of British Airways and Spanish carrier Iberia, said Friday its net profit had dipped in the third quarter on a softer US market and European competition.

Profit after tax eased 2.3 percent to 1.4 billion euros ($1.6 billion) compared with the July-September period last year, the group said in a statement.

"Overall it was a good performance, on top of a record third quarter in 2024," IAG said.

"As expected the North Atlantic market saw some softness," noted IAG, adding that earnings were impacted also by increased competition forcing it to lower European airfares.

Total revenue was flat at 9.3 billion euros.

"IAG's steep ascent levelled off in the third quarter, as growth failed to soar to the heights the market expected," noted Aarin Chiekrie, equity analyst at Hargreaves Lansdown.

"Mirroring Air France-KLM... the miss stems from lower cargo revenues, with last year's figures benefitting from increased volumes ahead of the US presidential election" that returned Donald Trump to power.

Following the IAG update, its share price slid seven percent on London's benchmark FTSE 100 index, which was down slightly overall in morning deals.

Shares in Air France-KLM sank Thursday after the Franco-Dutch group acknowledged it had endured a "tough" third quarter.

German rival Lufthansa and Air France-KLM have also noted a decline in ticket demand for flights to the United States, where tighter visa rules have made travel more difficult.

IAG chief executive Luis Gallego added Friday that the group remains "on track to deliver another year of growth in revenues, profit and shareholder returns".

The company, which owns also Irish carrier Aer Lingus and Spanish airline Vueling, announced Thursday plans to offer free high-speed internet connectivity on flights after agreeing a deal with Elon Musk's Starlink.

IAG had reported a 44-percent jump in net profit for the first half of the year, which saw it unveil a multi-billion-dollar order for new Boeing and Airbus planes.

First-half earnings were impacted however by a £40-million ($52-million) hit to British Airways after a fire at an electrical substation forced a shutdown at London's Heathrow Airport in March.

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