IAG stock faces profit pressure as fuel costs rise

International Airlines Group reported weaker third-quarter profitability on Friday, November 6, as higher fuel costs and operational disruption offset revenue growth. Reuters reported that the British Airways owner also expects 2026 capacity to be slightly below the prior year, while management kept its full-year operating margin target.

Third-quarter operating profit before exceptional items reached 1.73 billion euros, down from 2.05 billion euros a year earlier and below the 1.81 billion euro analyst consensus cited by Reuters. Revenue increased 4.5 percent to 9.74 billion euros, but the increase was not enough to absorb higher fuel and disruption costs.

Fuel Costs Outpace Revenue Growth

IAG said fuel costs rose sharply during the quarter, while disruption linked to Middle East conflict and air traffic control outages also affected operations. The group expects its full-year fuel bill to reach 8.9 billion euros. Reuters reported that IAG was 45 percent hedged for 2027 and 71 percent hedged for the remaining 2026 period.

The cost pressure came despite firm demand in important long-haul markets. Chief Executive Luis Gallego said business demand remained strong, particularly across the North Atlantic, domestic markets and Asia-Pacific. Reuters also reported that 85 percent of expected fourth-quarter seats had already been booked and that first-quarter 2027 bookings were strong.

Margin Target Remains Intact

IAG retained its expectation of delivering a full-year operating margin before exceptional items of at least 12 percent. That target is important for investors because it indicates that management expects pricing, capacity discipline and hedging to offset at least part of the fuel shock over the full year.

The lower capacity outlook marks a more cautious stance than the earlier expectation of broadly stable capacity. IAG attributed the change to Middle East disruption and other operational pressures. At the same time, the group continues to benefit from premium and transatlantic demand, which offers support for yields even as costs rise.

Reuters reported that IAG shares moved up and down around 1 percent in early trading after the results, reflecting the tension between resilient demand and rising costs.

IAG stock traded at 5.45 euros on Lang & Schwarz at 11:41 CET on Wednesday, November 11, 2026.

European airline groups remained focused on fuel prices, capacity and operational reliability; current market reports provide the broader market context.

Investors will next watch booking trends, fuel hedging and the delivery of IAG's full-year margin target. More news and analyses on IAG stock.