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British Airways owner IAG sees 2026 capacity slightly down year-on-year - Finance news and analysis from Global Banking & Finance Review
Finance

British Airways owner IAG sees 2026 capacity slightly down year-on-year

Published by Global Banking & Finance Review

Posted on November 6, 2026

1 min read

· Last updated: November 6, 2026

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IAG Expects Slight Year-on-Year Decrease in 2026 Flight Capacity

IAG's 2026 Capacity Forecast and Financial Performance

Impact of Middle East Conflicts on Operations

Nov 6 (Reuters) - British Airways owner IAG on Friday forecast its annual capacity would be slightly lower than a year earlier, as flight disruptions in the Middle East stemming from the ongoing Iran war and other regional conflicts weighed on operations.

Third-Quarter Financial Results

Operating Profit Misses Expectations

The airline's third-quarter operating profit before exceptional items of €1.73 billion ($1.94 billion) also missed analysts' consensus of €1.81 billion, as the global aviation sector struggles with rising fuel costs stemming from the war.

Forward Bookings and Fuel Hedging

Strong Forward Bookings

However, IAG said 85% of expected forward bookings for the fourth quarter were secured, with numbers for the first quarter of 2027 looking strong. 

Fuel Cost and Hedging Strategy

Expected Fuel Costs

Its total fuel cost is expected to be €8.9 billion for the year, with IAG being currently 45% hedged against volatilities for 2027.

($1 = 0.8930 euros)

(Reporting by Yamini Kalia in Bengaluru; Editing by Subhranshu Sahu)

Key Takeaways

  • IAG has trimmed its 2026 capacity outlook to flat vs 2025 from an earlier growth forecast, owing to Middle East-related disruptions and weaker demand (live.euronext.com).
  • Total fuel costs are now projected between €8.3 billion and €8.6 billion, slightly below previous estimates of around €9 billion (live.euronext.com).
  • The group is hedged for approximately 70% of its fuel needs in 2026 and about 40% for 2027, cushioning exposure to price volatility (marketscreener.com).

References

Frequently Asked Questions

What is contributing to higher fuel costs for IAG?
The global aviation sector, including IAG, is facing rising fuel costs mainly stemming from the war in Iran and other regional conflicts.
What percentage of IAG's expected forward bookings for Q4 are secured?
IAG reported that 85% of its expected forward bookings for the fourth quarter are already secured.
How much are IAG's total fuel costs expected to be for the year?
IAG's total fuel cost is expected to reach €8.9 billion for the year.

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