LONDON, March 30, 2026, 14:19 BST
International Consolidated Airlines Group SA is keeping British Airways flights to Amman, Bahrain, Dubai and Tel Aviv suspended until May 31 and Doha until April 30, while adding Bangkok and Singapore services as passengers reroute around the Middle East conflict. Lufthansa and Air France-KLM are also holding back parts of their regional networks, underlining how broad the disruption has become for Europe’s biggest airline groups. 1
Why it matters for IAG now is that this has moved beyond a short-term schedule cut. Europe’s aviation safety regulator said on Monday that tighter flight corridors – the air lanes carriers are allowed to use – and more unusual routings were creating fresh risks as the Iran war narrows available airspace and pushes traffic into busier routes between Asia and Europe. 2
The disruption lands only weeks after IAG reported record 2025 operating profit before exceptional items of 5.024 billion euros and set out 1.5 billion euros of shareholder returns over 12 months. Finance chief Nicholas Cadbury said then there was “little visibility” for the second and third quarters and that Africa and the Middle East were softer, though Chief Executive Luis Gallego said first-quarter bookings were strong. 3
British Airways has tried to shift capacity, not just cut it. The carrier said it added seven extra return services to Bangkok and Singapore in the prior week and more than 3,300 seats between March 10 and March 19, saying demand was moving as customers looked for alternatives. 4
Fuel is the next fault line. Fuel hedging – financial contracts used to lock in part of future fuel and dollar costs – gives IAG some cover, but Reuters reported earlier this month that the group’s fuel and currency hedging was down about 9% from a year earlier; its policy still allows hedging of up to 75% of expected near-term fuel needs and up to 80% for low-cost airlines. In separate Reuters reporting, J.P. Morgan estimated a sustained 10% rise in jet fuel prices could trim operating profit by 3% to 10% this year across IAG, Air France-KLM, Lufthansa and Ryanair. 5
But IAG is not insulated if the oil shock drags on and demand softens. “The only way to get prices up is to reduce capacity,” Barclays analyst Andrew Lobbenberg said, while Rigas Doganis, chair of Airline Management Group, called the squeeze between weaker demand and higher fuel bills a “perfect storm.” 6
Another cost issue is moving in parallel. Reuters reported on Monday that European airlines likely met or even exceeded the EU’s 2% mandate for sustainable aviation fuel, a lower-emissions alternative to conventional jet fuel, in 2025, but Airlines for Europe – whose members include IAG – is still pressing regulators to soften tougher synthetic-fuel targets later in the decade because supply remains tight and expensive. 7
Investors’ next formal checkpoint is May 8, when IAG is due to publish first-quarter results. On the group’s investor relations page, its London-listed shares were down about 1.6% on Monday afternoon, while the Madrid line was off about 1.7%. 8
