London, March 16, 2026, 15:39 GMT
Shares in British Airways owner IAG rose about 1.2% on Monday to around 357.9 pence, clawing back part of last week’s drop as oil eased, though investors were still dealing with fresh British Airways suspensions across several Middle East routes. LSEG data on Reuters showed the stock had traded between 342.8 pence and 359.1 pence on the session. 1
The move matters because IAG is trying to protect margins just weeks after reporting stronger-than-expected annual profit and unveiling a new cash return plan. The market is now testing whether a pullback in crude can offset a deeper fuel shock for airlines, where jet fuel — the refined fuel carriers actually burn — has risen much faster than oil itself. 2
It is not a clean recovery story. London’s travel and leisure sector was down nearly 2% earlier on Monday even as the broader STOXX 600 edged 0.3% higher, a sign that investors still see airlines as exposed to fuel swings, inflation risk and route disruption. 3
Reuters market data put IAG’s previous close at 353.7 pence, leaving the shares well below the 52-week high of 464.28 pence reached on Feb. 27, the day the group posted full-year results. Volume stood at about 28.8 million shares. 1
Oil gave the sector a little breathing room. Brent was down 92 cents at $102.22 a barrel by 1248 GMT, after a sharp run-up linked to the U.S.-Israeli war on Iran and disruption around the Strait of Hormuz; even so, Reuters reported that jet fuel prices had doubled since the conflict began. 4
That gap matters more than the headline crude move because hedging — using financial contracts to lock in future fuel costs — is often tied to oil, not jet fuel. “That’s what blew out last week and that’s where everyone is less protected,” Bank of America transportation analyst Nathan Gee said of jet-fuel refining margins, while J.P. Morgan estimated that a sustained 10% rise in jet fuel could cut operating profit by 3% to 10% for IAG, Lufthansa, Air France-KLM and Ryanair. 5
Peers are already reacting. SAS said it had temporarily raised prices, Air France-KLM said it would add 50 euros to long-haul economy round-trip tickets, and Lufthansa said it was shifting capacity toward Asia and Africa as the war reshaped traffic flows. 6
For IAG, the network hit is direct. Reuters’ latest industry roundup said British Airways had cancelled flights to Abu Dhabi until later this year and suspended services to Amman, Bahrain, Doha, Dubai and Tel Aviv until later in March. Lufthansa Group and Air France-KLM have also kept curbs on several Middle East destinations. 7
That comes just after IAG reported 2025 operating profit before exceptional items of 5.02 billion euros, ahead of the 4.97 billion euros forecast by analysts polled by LSEG. The group said it would return 1.5 billion euros to shareholders over the next 12 months, starting with a 500 million euro share buyback, and Chief Executive Luis Gallego said demand in premium and corporate travel had rebounded since the third quarter and first-quarter bookings were strong. 2
But the risks are plain. Finance chief Nicholas Cadbury said with those results there was still little visibility on the second and third quarters, and Reuters reported last week that On the Beach had suspended its annual profit forecast after bookings to Turkey, Greece, Cyprus and Egypt slowed sharply. With Societe Generale’s Kenneth Broux warning the energy shock could either feed “second-round inflation effects” or push economies toward recession, investors still have little clarity on how durable Monday’s bounce will be. 2
