London, March 6, 2026, 08:54 GMT
British Airways, part of International Consolidated Airlines Group SA, remains grounded in Abu Dhabi, Amman, Bahrain, Doha, Dubai and Tel Aviv. With Gulf airports offering just a trickle of flights and regional airspace still off-limits, the airline has set up additional Muscat-to-London routes to help get stranded passengers moving. 1
IAG had just surprised with a stronger 2025 operating profit and a 1.5 billion euro cash return plan. Now, though, investors are back to watching jet fuel costs, potential route snarls, and the unknowns around how long the conflict drags on. 2
Shares in IAG dropped 3.6% in London on Thursday, extending losses from earlier this week. Wizz Air flagged a €50 million hit to net profit, citing the crisis. Lufthansa on Friday said its 2026 outlook had been thrown into question by the Middle East conflict. 3
British Airways is letting customers with bookings to the affected Middle East cities through March 15 switch their travel dates or request refunds. The airline added extra Muscat-Heathrow flights this week, with another set for March 8, but earlier options had already sold out. 1
Network pressures haven’t eased much. Reuters tallied over 25,000 Middle East flights scratched from schedules between Feb. 28 and March 5. Dubai airport, as of Thursday, was down to about 25% of its usual traffic. Emirates, Qatar Airways and Etihad typically handle around a third of Europe–Asia travelers. 4
Dubai Airports CEO Paul Griffiths called the past few days “unprecedented” on Thursday. Morningstar’s Nicolas Owens flagged the fuel shock as a likely drag on airlines’ March profits—a concern that stretches past just Gulf carriers. 5
Hedging—airlines locking in fuel prices before they move—should shield them from some immediate fallout. Reuters noted this week that IAG, back in February, reported its fuel and currency hedging for 2025 was about 9% lower than the year before, with its policy permitting coverage of up to 75% of near-term fuel requirements. Fitch, for its part, estimated many airlines across Europe, the Middle East and Africa are hedged at rates between 50% and 80% for the upcoming three months. 6
But hedging only goes so far. Prolonged airspace closures would still leave IAG exposed to lost revenue from suspended routes, pricier and lengthier detours, and the risk of passengers postponing travel right as airlines ramp up for the summer rush. Lufthansa CEO Carsten Spohr noted the war made clear just how “vulnerable” air traffic is. 7
IAG reported a 13% jump in 2025 operating profit before exceptional items, reaching 5.02 billion euros on revenue of 33.21 billion euros. The group also kicked off a 500 million euro share buyback, marking the start of a planned 1.5 billion euro payout to shareholders. 2
“Since Q3 we have seen a rebound,” Chief Executive Luis Gallego said last week, pointing to strong bookings for the first quarter of 2026. Still, finance chief Nicholas Cadbury flagged shaky visibility heading into the second and third quarters, adding that weakness in Africa and the Middle East had already emerged—a warning that’s taken on fresh urgency. 2
