International Airlines Group has warned that fares will rise next year as the British Airways owner prepares to pass through fuel costs that have soared following the Iran war. It raised its fuel bill forecast for this year to €8.9bn, up from earlier estimates, and expects a meaningfully higher bill in 2027. The airline has passed through rising fuel costs to passengers, with BA’s pass‑through rate near 100% and the wider group at about 80%.
The group’s hedging protection will drop to about 45% for next year, bought at higher prices, reducing its shield against price volatility. Finance chief José Barrionuevo said the gross fuel bill will be higher but confidence remains that pass‑through will mitigate much of the impact. Other carriers, such as Lufthansa and Ryanair, also signal steep price increases, with Lufthansa warning of "double‑digit" rises and Ryanair citing possible 20% hikes.
IAG’s pre‑tax profit fell 13% to €1.6bn, though the margin target of above 12% remains intact. Revenues hit a record €9.7bn, driven by strong demand on the north Atlantic and Asian business routes. CEO Luis Gallego said it is "too early" to discuss full‑year 2027 fares, but prices are still very high for Q4 2026 and Q1 2027. The share price rose 1% in morning trading.
Source: Financial Times Companies · Summarized by HeadlinesBriefing