International Airlines Group (IAG) has scrapped its planned capacity growth for the rest of 2026 after the Iran conflict pushed fuel prices higher and disrupted global travel. The airline group announced that its yearly capacity will remain flat, a sharp reversal from the 3% growth target it set just three months earlier. Chief executive Luis Gallego said demand would stay strong despite the volatility.

IAG now expects fuel costs for the year to be around €8.3bn to €8.6bn, down from the earlier €9bn forecast but still over €1bn above last year’s level. First‑half pre‑tax profits fell 19% from €1.7bn to €1.4bn, while revenue edged up 1% to €16bn.

The rise in fuel prices followed the US‑Israeli strikes on Iran, which closed the Strait of Hormuz and forced airlines to cut capacity and raise fares. The move reflects a broader industry trend of tightening schedules in response to higher operating costs.

The decision underscores how geopolitical events can quickly alter aviation strategy, forcing carriers to balance growth ambitions against unpredictable market shocks.