London, June 10, 2026, 14:35 BST
- IAG slipped another 0.15% to about 409.6p in Thursday trading, logging its third straight drop this week.
- It’s fuel costs, not demand, facing the most scrutiny right now. Investors are looking at hedges, fare hikes and capacity cuts to see how much they will help protect profits.
- IAG is set to release its second-quarter numbers on July 31. The company’s next major update lands then.
IAG shares fell again in London on Wednesday as attention stayed on jet-fuel prices and what the next round of hedging could mean for Europe’s airlines. British Airways parent traded at 409.6p at 14:17 BST, down 0.15%. The stock had already finished lower both Monday and Tuesday.
Shares eased again, adding to losses since Friday’s 420.8p finish. The stock stays well under its 52-week top of 464.28p. Investors are still pricing in fuel risks, even though IAG posted a strong first-quarter profit and outlined a cash return.
Fuel hedging is front and center again. Reuters Breakingviews said Wednesday that Europe’s largest airlines went into the latest spike with strong hedges, but deciding how much to commit now for 2027 fuel isn’t simple while prices stay high.
IAG reported a 1.9% increase in revenue to €7.18 billion for the first quarter. Operating profit jumped 77.3% to €351 million, according to the latest update. The airline group said premium cabins and transatlantic routes are still solid, with flying on the North and South Atlantic together accounting for roughly half of its total capacity.
Fuel remains in focus for investors. IAG reported it is 70% hedged for the rest of 2026, and now sees its full-year fuel bill near €9.0 billion using the May 5 fuel curve. The group also revised its capacity plans, now expecting less growth than the 3% it signaled in February. Growth for the second quarter should be about 1%, and about 2% in the third quarter.
IAG CEO Luis Gallego said in the May results that there are no fuel supply issues in the company’s key markets. “We currently see no issues with fuel availability in our main markets,” he said. But Gallego said if fuel prices stay high, profit for the year will fall short of what IAG had first expected. Iairgroup
Industry conditions have turned down. The International Air Transport Association said global airline net profit will drop to $23 billion in 2026 after hitting an estimated $45 billion in 2025. Net profit margin is set to fall to 2.0%. IATA also projects fuel costs to rise this year to $350 billion, up from $252 billion in 2025.
IATA’s latest take on Europe sheds light on why IAG is still trading lower. The group said Europe depends a lot on Gulf jet-fuel imports and warned that as older hedges expire, higher costs will come through, even if earlier hedging helped cushion the hit.
Bullish investors still have something to point to. IAG says it can claw back about 60% of this year’s extra fuel bill with revenue and cost moves. The group is also sticking with plans to return another €1 billion of surplus cash to shareholders through February 2027. Its loyalty unit posted a 10.0% jump in revenue and a 32.6% gain in profit in the first quarter. That gives IAG a fatter margin stream outside of its flight operations.
Fuel could stay high into winter, a season when airlines tend to have less pricing power. If travelers push back on fare hikes or if operational problems drag on, IAG might not recover as much as planned, may have to trim more seats, and could end up with less free cash flow than the €3 billion it targeted earlier this year.
IAG still has shareholder returns in focus. The company’s final cash dividend stands at €0.05 per share, set with an ex-dividend date of June 25. Investors buying after June 25 miss out on the payout, pending stated approval.
IAG’s next hurdle is on July 31 with its second-quarter earnings. Traders want to see how fuel expenses showed up in the results, how much got pushed through to ticket prices, and if the summer flight schedule will face more cuts.
