British Airways' parent company has warned that its profits will be hit as it expects to spend approximately two billion euro (£1.72 billion) more than planned on fuel this year amid the ongoing Iran oil crisis.
Fuel Price Impact
International Airlines Group (IAG) chief executive Luis Gallego stated that the company is "managing the uncertainty" caused by the fuel price increase by "taking the necessary action on yields, costs and capacity." He added: "Whilst the impact of the higher fuel price will inevitably lead to lower profit this year than we originally anticipated, we are confident in our business model and strategy."
Supply Assurance
Mr Gallego confirmed that IAG is "not currently seeing any jet fuel supply disruptions across our main hubs or markets" and is "confident in fuel availability through the summer." The higher fuel costs are primarily driven by geopolitical tensions in Iran, which have pushed oil prices upward. IAG, which also owns Iberia and Aer Lingus, had previously forecast a strong financial performance for 2026 but now expects a significant reduction in profitability due to the unexpected rise in energy expenses.
The group is implementing measures to mitigate the impact, including adjusting ticket prices, optimizing routes, and controlling costs where possible. Analysts suggest that the fuel bill increase could lead to higher airfares for passengers as airlines pass on some of the additional costs. However, IAG remains optimistic about its long-term prospects, citing a robust business model and strategic resilience in the face of external shocks.
