LONDON, March 13, 2026, 15:42 (GMT)
- IAG traded near 356 pence in London on Friday, the stock still languishing about 23% under its 52-week high.
- Iberia is looking to discuss as many as 996 job cuts, and British Airways is still keeping a number of Middle East routes off its schedule.
- Jet fuel prices have shot up twofold since the Iran conflict, putting fresh pressure on airline margins and casting new doubts on summer travel demand.
International Consolidated Airlines Group, the parent of British Airways, dropped further on Friday, trading near 356 pence in London. Investors weighed Iberia’s move to lay off as many as 996 staff, alongside new evidence that turbulence from the Middle East is hitting travel demand far outside the Gulf.
This is notable—heading into March, IAG stood out among European airlines as a recovery play. Last month, the group posted record operating profit for 2025 and unveiled a 1.5 billion euro plan to return cash to shareholders. That includes a 500 million euro buyback. CEO Luis Gallego pointed to a “rebound” in transatlantic demand since the third quarter. Reuters
The market finds itself once more at the mercy of fuel and demand, two factors over which airlines have little sway. Jet fuel prices have now doubled since the Iran conflict kicked off, while crude’s up around a third. That’s sent the jet-fuel refining margin — the spread between jet fuel and crude — soaring, and thrown the limits of hedging into sharp relief. Contracts meant to lock in fuel costs only go so far. Cathay Pacific CFO Rebecca Sharpe called it “a dramatic increase.” Reuters
Iberia has outlined a schedule for negotiations with unions on job cuts that would affect 106 pilots and cabin crew, along with 753 ground employees. The company stopped short of linking the layoffs to the broader fuel price spike, though the announcement comes as airline stocks face renewed scrutiny from investors.
British Airways has extended the cancellation of its Abu Dhabi route through later this year, while flights to Amman, Bahrain, Doha, Dubai and Tel Aviv remain on hold until later in March, according to Reuters’ latest factbox Friday. Over on Thursday, On the Beach scrapped its full-year profit forecast as bookings for Turkey, Greece, Cyprus and Egypt took a sharp downturn—pointing to weakening demand creeping into more leisure destinations.
The picture in Europe is anything but clear. Lufthansa reported a 75% jump in forward bookings for direct Asia routes this year compared to last. Ryanair pointed to heavier demand for European spots as travelers avoid the Middle East. Air France-KLM, on the other hand, has already hiked long-haul fares to offset fuel expenses. Aviation analyst Hans Joergen Elnaes noted European and Asian carriers “have to pick up that traffic” with Gulf routes still limited. Reuters
Nathan Gee, who leads Bank of America’s Asia-Pacific transportation research, pointed out that low-cost carriers tend to “get squeezed the most” on fuel spikes, since their passenger base feels price increases sharply. IAG isn’t strictly a budget player, though it does count Vueling among its brands, together with British Airways, Iberia and Aer Lingus. Reuters
IAG says it remains well hedged for now and isn’t looking to raise ticket prices anytime soon. According to Reuters, the company manages fuel needs with a rolling three-year hedge, locking in up to 75% of anticipated near-term demand, and as much as 80% for its budget carriers.
Still, hedging has its limits. Persistent jet-fuel margins or a sluggish return for Mediterranean travel could mean the padding runs out sooner than airlines hope; on the flip side, if oil prices drop and rerouted European traffic proves resilient, the squeeze might let up sooner than expected.
Still, the stock is backed by annual results that outshine most airlines. Trading near 356 pence, shares sit about 23% under the 52-week top of 464.1 pence—investors holding out for clearer summer booking momentum before rewarding the group’s buybacks and premium traffic push.
