London, March 16, 2026, 15:39 GMT
IAG shares edged up roughly 1.2% Monday, trading close to 357.9 pence. The move partially reversed last week’s slide, as oil prices softened. Still, the stock faced pressure from new British Airways flight suspensions on certain Middle East routes. LSEG data via Reuters pegged the day’s range between 342.8 pence and 359.1 pence.
IAG’s decision comes as it looks to shield its margins, only a few weeks out from posting a better-than-anticipated annual profit and rolling out a fresh cash return plan. Now, traders are weighing whether the recent dip in crude prices will be enough to counter a sharper hit from jet fuel costs, which have climbed far more quickly than crude oil.
Forget a neat rebound. London’s travel and leisure stocks slipped almost 2% early Monday, lagging even as the STOXX 600 inched up 0.3%. Investors aren’t letting go of worries: airlines remain vulnerable to volatile fuel prices, inflation pressures, and flight route hiccups.
IAG finished the last session at 353.7 pence, Reuters market data showed. That’s still a long way from the 52-week peak at 464.28 pence hit back on Feb. 27, just after the company reported its full-year numbers. Trading volume came in around 28.8 million shares.
Oil prices eased off a bit, with Brent slipping 92 cents to $102.22 a barrel by 1248 GMT. That came after a surge tied to the U.S.-Israeli war on Iran and the troubles near the Strait of Hormuz. Still, Reuters noted jet fuel prices have already doubled since the fighting started.
The spread matters more than crude’s headline jump, since most hedges are pegged to oil futures, not jet fuel itself. “That’s what blew out last week and that’s where everyone is less protected,” Bank of America transportation analyst Nathan Gee said, pointing to jet-fuel refining margins. J.P. Morgan figures a lasting 10% climb in jet fuel could hit operating profits at IAG, Lufthansa, Air France-KLM and Ryanair by anywhere from 3% to 10%. Reuters
Competitors are making moves. SAS put through a temporary price hike, while Air France-KLM tacked on an extra 50 euros to long-haul economy round-trips. Lufthansa is adjusting by steering more flights toward Asia and Africa, responding to how the war is rerouting demand.
IAG is feeling the impact right away. According to Reuters, British Airways scrapped flights to Abu Dhabi until later in the year, and flights to Amman, Bahrain, Doha, Dubai and Tel Aviv are off the schedule until sometime in March. Lufthansa Group and Air France-KLM haven’t lifted their restrictions on a number of Middle East routes either.
IAG posted a 2025 operating profit before exceptional items of 5.02 billion euros, topping the 4.97 billion euros analysts had expected in the LSEG poll. The group plans to return 1.5 billion euros to shareholders over the coming year, kicking things off with a 500 million euro share buyback. Chief Executive Luis Gallego pointed to a rebound in premium and corporate travel since the third quarter, with first-quarter bookings described as strong.
The dangers haven’t gone anywhere. Finance chief Nicholas Cadbury pointed out that, despite the results, visibility into the second and third quarters remains limited. Just last week, Reuters flagged that On the Beach pulled its annual profit forecast after a steep drop in bookings for Turkey, Greece, Cyprus and Egypt. Societe Generale’s Kenneth Broux is also sounding the alarm: the energy shock might either spark “second-round inflation effects” or tip economies into recession. For investors, Monday’s bounce still looks fragile. Reuters
