LONDON, March 18, 2026, 15:31 GMT
Shares of International Consolidated Airlines Group SA ticked up roughly 0.7% to about 357.4 pence Wednesday afternoon, while its cargo arm rolled out another set of Middle East flight suspensions. IAG Cargo confirmed that service between London and Amman, Bahrain, Doha, Dubai and Tel Aviv will remain off the schedule through May 31, and the London-Abu Dhabi route is now paused until October. 1
The stock remains about 23% off its intraday peak of 464.28 pence from Feb. 27. Just a day later, the Iran conflict flared, and by March 17, roughly 30,000 flights involving Middle East airports were scrapped—a sharp illustration of how oil and airspace disruptions can swiftly hit airline pricing. 2
In Europe, travel and leisure stocks picked up 1.1% while London’s FTSE 100 ticked up 0.3%, with oil prices pulling back following the restart of Iraq’s exports via Turkey’s Ceyhan pipeline. Airlines caught a break after weeks of volatile swings linked to crude. 3
Still, IAG doesn’t have much of a cushion here. Earlier this week, British Airways announced more temporary reductions in Middle East routes, switching capacity over to Singapore and Bangkok. Back on March 10, the group said immediate fare hikes weren’t on the table, since fuel was largely hedged for the near to medium term—contracts fixing a chunk of their costs ahead. 4
Last month’s full-year numbers had Chief Executive Luis Gallego pointing to a rebound, especially since Q3, saying premium and corporate bookings at British Airways were holding up. But Finance Chief Nicholas Cadbury flagged “little visibility” for the second and third quarters, with softness cropping up in Africa and the Middle East. Even so, IAG turned in 5.02 billion euros of operating profit before one-offs and put forward 1.5 billion euros in planned shareholder returns over the next 12 months. 5
Rival carriers aren’t waiting around to shore up profits. Air France-KLM, just last week, bumped long-haul economy prices by 50 euros per round trip. Lufthansa’s Carsten Spohr pointed to the conflict as proof that “how exposed air traffic is and how vulnerable it remains.” 6
The real problem is fuel. According to Reuters, jet fuel costs have already doubled since the conflict erupted, rising much faster than crude. J.P. Morgan figures a steady 10% jump in jet fuel prices could shave anywhere from 3% to 10% off operating profit this year at IAG, Air France-KLM, Lufthansa, and Ryanair. Nathan Gee, who leads Bank of America’s Asia Pacific transportation research, put it bluntly: airlines catering to the most price-sensitive flyers “are the ones that get squeezed the most” in these conditions. 7
By Wednesday afternoon, that brief calm was slipping away. Brent crude surged 4.7% to $108.32 a barrel. Europe’s STOXX 600, which had earlier been steady, flipped into the red after news of attacks on Iranian gas and oil fields—a “pretty significant escalation,” said Pepperstone strategist Mike Brown. 8
IAG is left juggling resilient transatlantic bookings with a fuel price spike that’s moving quickly. Shares have bounced off this week’s low around 342.6 pence, though they’re still trading well under their highs from late February. 5
