IAG stock profit falls 16% as fuel costs squeeze Q3

International Airlines Group reported a weaker third quarter on November 6, 2026, as higher jet-fuel costs and operational disruption offset continued demand for long-haul travel. The airline group maintained its full-year operating margin target of at least 12% before exceptional items.

According to TravelDailyNews, third-quarter revenue increased 4.5% to 9.744 billion euros. Operating profit before exceptional items fell 16% year over year to 1.726 billion euros, compared with 2.053 billion euros in the same quarter of 2025. The operating margin before exceptional items narrowed to 17.7% from 22.0%.

Fuel And Disruption Weigh On Margins

Fuel was the largest cost headwind during the quarter. Total fuel costs rose 30.4% net of hedging, while non-fuel unit costs increased 3.4%. IAG attributed part of the pressure to one-off disruption events, including major air traffic control outages. Cost-saving measures partly offset the impact.

The revenue performance remained supportive. Passenger revenue rose 3.8% and cargo revenue increased 3.9%, while other revenue grew 11.3%, helped by IAG Loyalty. The group also reported strong results on the North Atlantic, where unit revenue increased 11.0% with broadly stable capacity. That demand helped cushion pressure in more competitive European markets and regions affected by reduced Middle East flying.

Management Holds Full-Year Outlook

Chief Executive Luis Gallego said the quarter showed resilient demand, with a 17.7% operating margin despite high fuel prices and disruption. Management kept the full-year margin target at 12% or more, within its stated through-the-cycle range of 12% to 15%.

IAG expects full-year capacity to be slightly below 2025 levels. It also sees non-fuel unit costs rising by about 1% in 2026 and total fuel costs reaching 8.9 billion euros. The group said 85% of expected fourth-quarter bookings were already secured, while early 2027 bookings were strong. Those indicators support the revenue outlook, but fuel prices, network disruption and capacity discipline remain important variables for profitability.

Shareholder Returns Remain In Focus

IAG announced a 10% increase in its interim dividend to 0.053 euros per share and began the final 500 million euro tranche of its 1.5 billion euro share buyback programme. The company expects to complete that tranche by the end of February 2027. Capital expenditure for 2026 is now expected to reach 3.1 billion euros, while aircraft delivery expectations were reduced to 12 from the previous half-year forecast of 16.

IAG stock traded at 5.46 euros on Lang & Schwarz at 12:11 CET on Thursday, November 12, 2026.

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