Shares fell 1.3% following IAG’s first half 2026 results, reflecting investor caution amid margin pressure from higher fuel costs and mixed performance across key operating segments despite resilient revenue growth and cost discipline.
- Operating profit declined €121 million year-on-year to €1.757 billion, with the operating margin contracting to 10.9%, below the group’s stated full-year target range of 12% to 15%.
- Passenger revenue rose modestly by 1.0%, driven primarily by a strong first quarter, but growth slowed significantly in the second quarter to 0.2%, weighed down by capacity constraints and competitive pressures.
- Fuel unit costs increased 12.5% due to rising commodity prices and incomplete hedging offsets, significantly impacting profitability, particularly in price-sensitive short-haul segments.
- British Airways delivered a modest profit increase (€44 million), contrasting with declines at Iberia (–€38 million), Vueling (–€49 million), and Aer Lingus, which swung to an operating loss (€34 million), reflecting a mix of higher fuel costs, competitive intensity, and operational challenges.
- The loyalty business remained a bright spot, with operating profit up 25% to GBP 239 million and margins improving, driven by non-airline partnerships despite disruption from Middle East route suspensions.
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