LONDON, March 13, 2026, 15:42 (GMT)
- IAG shares hovered around 356 pence in London on Friday, leaving the stock roughly 23% below its 52-week high. 1
- Iberia plans talks on up to 996 layoffs, while British Airways keeps several Middle East routes suspended. 2
- Jet fuel has doubled since the Iran conflict, renewing concern over airline margins and summer demand. 3
British Airways owner International Consolidated Airlines Group slipped again on Friday, with the stock hovering around 356 pence in London trade as investors absorbed Iberia’s plan to cut up to 996 jobs and fresh signs that the Middle East shock is bruising travel demand well beyond the Gulf. 1
That matters because IAG had gone into March as one of Europe’s stronger airline recovery stories. The group reported record 2025 operating profit last month, launched a 1.5 billion euro shareholder return plan including a 500 million euro buyback, and CEO Luis Gallego said it had “seen a rebound” in transatlantic demand since the third quarter. 4
Now the market is back on the two variables airlines least control: fuel and demand. Jet fuel has doubled since the Iran conflict while crude has risen by about a third, blowing out the jet-fuel refining margin — the premium jet fuel trades over crude — and exposing the limits of hedging, or using contracts to lock in part of a future fuel bill; Cathay Pacific CFO Rebecca Sharpe called the jump “a dramatic increase.” 3
Iberia said it had set a timetable for talks with workers’ representatives over the cuts, including 106 pilots and cabin crew and 753 ground staff. The carrier did not tie the move to the wider fuel shock, but it lands as investors are already re-pricing airline risk. 2
British Airways has cancelled Abu Dhabi flights until later this year and suspended Amman, Bahrain, Doha, Dubai and Tel Aviv until later in March, Reuters said in an updated factbox on Friday. On Thursday, On the Beach pulled its annual profit forecast after bookings to Turkey, Greece, Cyprus and Egypt slowed sharply, suggesting demand damage is spreading into nearby leisure markets. 5
The read-through across Europe is messy. Lufthansa said forward bookings for direct Asia flights through Europe were up 75% year-on-year, while Ryanair flagged stronger bookings to European destinations as travellers steered clear of the Middle East; Air France-KLM, by contrast, has already moved to raise long-haul ticket prices to cope with fuel costs. Aviation specialist Hans Joergen Elnaes said European and Asian airlines now “have to pick up that traffic” as Gulf capacity stays constrained. 6
Nathan Gee, Bank of America’s head of Asia-Pacific transportation research, said low-cost carriers usually “get squeezed the most” when fuel jumps because their customers are most price-sensitive. IAG is not a pure budget operator, but it does own Vueling alongside British Airways, Iberia and Aer Lingus. 3
IAG has said it is well hedged for the near term and has no immediate plans to lift fares. Reuters separately reported that the group hedges on a rolling three-year basis, covering up to 75% of expected near-term fuel needs and as much as 80% for low-cost airlines. 7
But hedging is not immunity. If jet-fuel margins stay wide or Mediterranean bookings take longer to recover, the current cushion may only buy time; if oil eases and rerouted traffic through Europe holds up, the pressure could fade faster than feared. 3
Even so, the stock is still coming off a stronger set of annual numbers than many airlines can show. At around 356 pence, it remains roughly 23% below its 52-week high of 464.1 pence, a sign investors want cleaner summer booking signals before giving the group full credit for buybacks and premium traffic again. 8
