LONDON, April 30, 2026, 18:07 BST
- IAG shares finished up 2.22% in London, recouping some of the ground lost earlier this week.
- All eyes now turn to its first-quarter numbers dropping May 8, with investors zeroing in on fares, bookings, and how the company’s fuel hedging strategy has played out.
- Air France-KLM on Thursday flagged a $2.4 billion jump in its 2026 fuel costs, adding to the squeeze facing European airlines.
Shares of International Consolidated Airlines Group SA moved up 2.22% to finish Thursday at 372.40 pence, recovering some ground after Wednesday’s dip. As results loom next week, investors are eyeing not so much the rebound as the cost of a jet-fuel squeeze weighing on profits for the British Airways parent.
Fuel has shifted from just a worry to a real drag on earnings for Europe’s airlines. Jet fuel typically accounts for around a third of their expenses, and hedges—those contracts meant to secure stable prices—aren’t offering as much cover now that prices remain elevated.
IAG is set to release its first-quarter 2026 update on May 8, according to its financial calendar. Ticket pricing, summer demand, and capacity—essentially, how many seats and flights the group is bringing to market—are expected to draw attention from investors.
Signals from the sector are all over the place. Air France-KLM on Thursday flagged a $2.4 billion increase in this year’s fuel costs and dialed back its capacity growth outlook to 2%–4%, down from a previous 3%–5%. Still, the carrier managed to report a narrower-than- forecast operating loss for the first quarter.
Air France-KLM CEO Ben Smith noted that higher fuel costs haven’t shown up in the numbers yet, but warned they’ll start to bite in the quarters ahead. Over at Bernstein, analyst Alex Irving pointed to the modest capacity reduction as a signal that travel demand remains strong.
IAG is caught up in the fuel issue too. Last week, Reuters said the company intended to hike ticket prices because of rising jet-fuel costs, though it stressed there hadn’t been any supply disruptions.
Shares are still trading far off their late-February peak. IAG hit a 52-week high of 464.10 pence back on Feb. 27, but as of Thursday’s close, the stock sat roughly 20% underneath that mark, according to market data.
Industry leaders stop short of labeling this a pandemic-scale disruption, but they say pricing the risk is getting trickier. Willie Walsh, who runs the International Air Transport Association, told Reuters that fuel-supply rationing is a possibility—especially in Asia and Europe—even though current supply levels look solid.
Ryanair boss Michael O’Leary downplayed concerns, suggesting supply risks were fading. For IAG, the stakes are clear: stable fuel prices help keep fares and margins in check. A prolonged squeeze, though, might mean higher ticket prices or even route cuts.
Bernstein remains upbeat on IAG. Analyst Alex Irving, in comments highlighted by MarketScreener, stuck with a buy call and set the target at 470 pence. Elsewhere this week, Bernstein named IAG its top network-carrier choice, citing the airline group’s size, profits, and strength in long-haul.
Here’s the catch: if fuel costs remain elevated, hedges expire, and travelers balk at paying more, IAG’s focus on long-haul and premium routes might not be enough to shield its margins. Air France-KLM’s alert signals the strain is real across the industry, leaving IAG to prove if its own buffer can hold up.
