LONDON, June 8, 2026, 12:08 BST
IAG shares dropped in London morning trade Monday. The British Airways parent slipped 6.5p, or 1.54%, to 414.3p by 11:36 BST, with 3.88 million shares moving. Investors looked at oil worries and a new carbon costs dispute with Brussels. IAG is still 24.9% higher over twelve months, delayed data show.
Brent crude jumped almost 5% to $97.60 per barrel as Iran and Israel traded fire. London’s FTSE 100 slipped 0.4% at the open, with IAG trading down early. Two big cost lines are moving at once.
Europe’s biggest airlines are telling the EU to keep its Emissions Trading System from covering outbound international flights, Reuters said Monday. The ETS forces companies to buy limited permits for greenhouse gas emissions. IAG, Air France-KLM, Lufthansa, and Ryanair all pushed back against expanding the ETS, throwing support to the U.N.’s CORSIA offset plan for capping emissions growth in international flights.
IAG isn’t talking about an abstract policy change here. The company reported in May that first-quarter revenue rose 1.9% to €7.18 billion, while operating profit jumped 77.3% to €351 million. IAG estimated its 2026 fuel bill will be about €9.0 billion and said it’s 70% hedged for the rest of this year—so it has locked in prices for much of its planned fuel use. The group aims to recover roughly 60% of the higher fuel costs through revenue and cost moves. CEO Luis Gallego called IAG “uniquely positioned to navigate” the shock but still sees “lower profit this year.” IAIR Group
Airlines face growing warnings on costs, with IATA over the weekend saying the global industry could see profit cut in half to $23 billion and will need to pay another $100 billion for jet fuel this year. “Higher ticket prices” are unavoidable, said Willie Walsh, IATA’s director general and ex-IAG boss. British Airways CEO Sean Doyle said there was “no getting away from it” on fares if fuel keeps rising. Doyle said BA’s long-haul, premium and corporate routes can push through fare hikes more easily than its short-haul leisure side. The Guardian
IAG is made up of British Airways, Iberia, Vueling, Aer Lingus, LEVEL, IAG Loyalty and IAG Cargo. The company was formed in 2011. It says its shares are listed in London and Spain and lists its head office in London. Investors get exposure to all these brands with IAG’s stock.
IAG Loyalty is betting on loyalty as its big non-fuel play. At its June 3 investor day, the unit put out a mid-term target for €1 billion in operating profit after saying it expects €593 million of underlying operating profit in 2025. IAG described loyalty as a capital-light piece of the business — meaning it can add profit without needing to buy more aircraft as fast as revenue goes up.
The risk now is Monday’s cost warnings could shift into a demand problem. Morningstar analyst Loredana Muharremi, CFA, said last month IAG shares looked “moderately undervalued” but flagged high uncertainty. She wrote that cost recovery should work better on premium and long-haul than what’s seen in European short-haul, where there’s more competition. If the fare hikes fall on the most price-sensitive travelers, that’s the downside scenario. Morningstar
TAP Air Portugal is still on track for privatisation, chairman Carlos Oliveira told Reuters on Sunday, saying higher fuel prices won’t change plans. Air France-KLM and Lufthansa have both put in non-binding offers after IAG backed away, even though IAG had shown earlier interest. For now, IAG is not part of the running while Air France-KLM and Lufthansa continue to consider next steps.
IAG’s next major update is set for July 31 when it reports second-quarter numbers. Third-quarter results will come out Nov. 6. The market probably won’t see much fresh company news before then. IAG shares may trade on moves in oil prices, decisions from Brussels, and early signs from summer bookings.
