LONDON, March 19, 2026, 16:43 GMT
International Consolidated Airlines Group SA closed Thursday at roughly 343 pence, dropping from 357.4 pence the previous day. Shares trailed behind a broader slide in London, as Brent spiked past $119 a barrel amid fresh attacks on Gulf energy targets, then pulled back. London’s main indexes shed over 2%.
This shift lands just as IAG — the group behind British Airways, Iberia, Vueling, and Aer Lingus — was riding a wave of renewed confidence. March kicked off with upbeat 2025 profit guidance and a 1.5 billion euro payout plan for shareholders. But with that momentum, investor focus is snapping back to fuel hedges, the contracts airlines rely on to cap fuel costs. Across Europe, that shield is thinning.
Pressure is mounting quickly. “The longer it goes on, the bleaker it will look,” Ryanair Chief Executive Michael O’Leary told Reuters. Over at easyJet, Kenton Jarvis put it plainly: his “expectation is that prices go up” if airlines keep swapping out expiring hedges for pricier fuel. Air France-KLM and SAS have both already pointed to fare hikes. Reuters
Willie Walsh, now leading the International Air Transport Association and formerly of IAG, put it bluntly: “no winners” in this crisis. He cautioned that airlines might be forced to scale back capacity if jet fuel supplies tighten. That’s the overhang for airline shares right now—not just higher oil, but the real risk of fuel shortages and snarled airspace biting into both schedules and profit margins. Reuters
The strain at IAG is hitting home. British Airways on March 16 said it’s extending temporary cuts to flights across the Middle East, with services to Amman, Bahrain, Doha, Dubai and Tel Aviv still cancelled through later this month. Abu Dhabi remains off the map until later in the year. On the other hand, the airline has added flights heading to Singapore and Bangkok. An IAG spokesperson, speaking earlier this month, noted that the group isn’t looking at ticket-price hikes right now, since much of its fuel is hedged in the short to mid term.
But that buffer won’t last forever. Separate Reuters reporting from March 12 noted IAG’s fuel and currency hedges have slipped by about 9% in 2025 compared to the previous year. Earlier this week, Reuters highlighted jet fuel soaring to $150–$200 per barrel, up from just $85–$90 only days before. Bank of America’s Nathan Gee pointed out that airlines serving the most price-sensitive travelers are usually the first to feel the pinch if a fuel price shock drags on.
Competitors aren’t waiting. Air France-KLM announced a 50-euro bump in long-haul round-trip fares, while American Airlines flagged a $400 million hit from fuel in the first quarter. Lufthansa, for its part, added 40 flights to Asia to grab demand thrown off by Gulf airspace shutdowns. Higher oil prices are already reshaping ticket pricing and route maps across airlines.
The drop comes just three weeks after IAG reported a 13% gain in 2025 operating profit before exceptional items, hitting 5.02 billion euros—just above what analysts were looking for. Back then, Chief Executive Luis Gallego pointed to solid premium and corporate demand at British Airways, plus robust early bookings for the first quarter. Now, investors are stuck weighing that demand strength against the threat of a sharply higher fuel bill if the conflict persists.
