London, May 16, 2026, 19:06 (BST)
- IAG finished Friday at 374.70 pence, falling 2.52% on the session. The shares ended the week down about 2.7%, even after bouncing sharply on Monday.
- British Airways parent finished a €500 million buyback and kicked off a new one, set to begin May 18.
- Fuel costs, issues in the UK market and the launch of the new buyback will face their first real test for the shares on Monday after the break.
International Consolidated Airlines Group SA is starting the week with a fresh €500 million share buyback, though shares are on the back foot after slumping late last week in London.
The shares dropped 2.52% Friday to 374.70 pence. They finished at 409.70 pence Monday and then slid every session after. London’s exchange is closed Saturdays. The London Stock Exchange trades Monday through Friday, 8:00 a.m. to 4:30 p.m. local.
IAG’s new share buyback kicks off Monday. The timing is key as investors try to decide if bigger capital returns will be enough to balance the hit from higher jet fuel prices and recent losses across UK stocks. The next session could be a test.
IAG on Friday said it will start a new buyback programme to purchase up to 300 million shares, or around 6.5% of its share capital, by no later than Sept. 30. The group plans to reduce its share count and return extra cash to investors through the buyback, subject to shareholder approval. IAG said the move is aimed at cutting share capital.
The company said it wrapped up the €500 million buyback after its last purchase on May 14. It picked up 116.8 million shares, about 2.53% of its issued share capital. The shares sit in treasury for now, with management set to propose their cancellation at the annual general meeting.
IAG said first-quarter revenue rose 1.9% to €7.18 billion, while operating profit jumped 77.3% to €351 million. CEO Luis Gallego said it was a “strong first quarter,” pointing to strong demand in most markets, with premium cabins and North and South Atlantic routes still seeing the most strength. The company said demand is not the problem for shareholders, at least not yet. London Stock Exchange RNS PDF
IAG’s biggest problem remains the fuel bill. The airline said it’s 70% hedged for the rest of the year, so some price swings are capped, but is guiding for about €9.0 billion in fuel costs for 2026. IAG thinks it will make back roughly 60% of higher fuel costs through ticket prices, cost cuts and shifting capacity. Capacity is seats times distance flown. Free cash flow is now seen coming in below the €3 billion level it outlined in February.
IAG chief Gallego said the company has “no issues with fuel availability” in its largest markets, citing self-supply at its hubs. J.P. Morgan’s Harry Gowers kept a constructive view after IAG’s warning, saying the conflict would challenge but not stop IAG’s “strong free cash flow generation.” Reuters
Morningstar’s Loredana Muharremi, CFA, said IAG heads into the fuel shock “from a position of strength,” pointing to its low leverage and high margins, along with its loyalty business. But she also warned there’s still a lot of uncertainty and said the Middle East fuel effect was barely visible in the first quarter. Morningstar
IAG isn’t the only carrier dealing with fuel costs. Air France-KLM and easyJet have raised similar concerns, and Lufthansa CEO Carsten Spohr told Reuters the airline has locked in fuel until early summer. The dynamic is key—good bookings alone don’t protect margins if fuel costs jump faster than fares.
FTSE 100 dropped 1.7% to 10,195.37 on Friday, the steepest one-day loss in over eight weeks. The slide wasn’t limited to airlines, with UK stocks, bonds, and sterling falling on political tension and inflation fears. Brent crude gained more than 2%, pushing fuel-exposed stocks lower.
IAG is watching the winter carefully as fuel prices could stay high, or travelers may slow spending if fares remain up. The company flagged that extended trouble in the Middle East could hit jet fuel supply worldwide. A buyback cuts shares on the market, but it doesn’t bring down fuel costs or ensure passengers keep paying more.
Markets are looking this week to see if the buyback puts a floor under the stock. Moves in oil and jet fuel prices stay in focus too. Traders are also watching to see if nerves in the UK market calm down after Friday’s selloff. The first Monday print could test risk appetite more than IAG itself.
