London, June 18, 2026, 13:12 (BST)
- IAG was up 1.3% at 458.6 pence at 13:01 BST, beating the FTSE 100, which was off around 1%.
- IAG has set its 2025 dividend at €448 million and is running a €500 million share buyback.
- Oil traded close to $78 a barrel, which helped European airline stocks. Uncertainty on IAG’s 2026 earnings is still mostly about fuel exposure.
International Consolidated Airlines Group gained Thursday while London stocks broadly slipped, as oil prices moved lower and the company’s push to reassure investors on returns took some pressure off the fuel issue this year. A lag in the market feed showed the British Airways and Iberia parent up 0.9% to 456.6 pence. The UK benchmark was down about 1%.
Energy was the main support early on. Oil slid 2.8% to near $77 a barrel after the US and Iran extended their ceasefire by 60 days and set plans to restart toll-free shipping in the Strait of Hormuz. That helps ease the chance of a spike in airline fuel costs, but doesn’t take the risk away.
IAG shareholders in Madrid backed a €228 million final dividend at the annual meeting, bringing the total payout for 2025 to €448 million. CEO Luis Gallego told investors the group can still cut complexity and boost productivity. Chairman Javier Ferrán said the company supports an energy transition, but said it shouldn’t hurt European connectivity or competitiveness.
IAG is returning cash to shareholders off a stronger balance sheet. The company posted 2025 operating profit before exceptional items of €5.02 billion, giving it a 15.1% margin. Net leverage stood at 0.8 times, with net debt measured against earnings. Free cash flow came in at €3.15 billion, which is the cash left after operating costs and investment.
Gallego cast doubt on consolidation as a growth plan, saying EU competition rules make a bid for easyJet “very difficult”. IAG had to drop its push to buy all of Air Europa after regulators stepped in. Gallego argued authorities should focus more on competition between hub airports than on single routes. Financial Times
Air France-KLM is lining up for M&A moves too, with the IAG competitor securing a €1 billion credit line from 12 banks on Wednesday. The cash is aimed at refinancing debt and backing acquisitions likely later this year.
IAG is trading close to its 52-week peak, with shares within roughly 2% of 464 pence after bouncing back from a fuel-led drop earlier this year. Investors do not have much margin for error at these levels. The company seems to be getting support based on its balance sheet and cash returns, and the market is betting the recent fall in oil will last.
But the downside is still on the table. IAG said in May that profit, capacity and free cash flow for 2026 would fall short of its earlier outlook. Fuel costs are likely to hit €9 billion, about €2 billion more than in 2025, even with hedging locked for 70% of what is left. J.P. Morgan’s Harry Gowers still expects “strong free cash flow generation to remain intact”, but said a fresh conflict or weaker fares could challenge that. Reuters
Second-quarter earnings on July 31 are next up. Investors want to see new fuel projections, signs that fare hikes and cost cuts are covering higher oil, and word that the buyback still fits with spending on planes and less cash coming in.
