British Airways parent profit drops on higher fuel costs
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IAG, the owner of British Airways and Iberia, said Friday that its net profit dropped more than 12 percent in the third quarter on soaring fuel costs and flight disruptions caused by the Middle East conflict. The group said its overall flight capacity had been hit "by cancellations due to the conflict in the Middle East, together with aircraft availability linked to engine issues and disruption related to air traffic control disruption".
The owner of British Airways and Iberia, said Friday that its net profit dropped more than 12 percent in the third quarter on soaring fuel costs and flight disruptions caused by the Middle East conflict.Profit after tax fell to 1.23 billion euros ($1.37 billion) in the July-September period compared with 1.40 billion euros for the third quarter of 2025, IAG said in a statement.
As on 06 Nov 2026, 02:30 AM IST
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"The fuel bill for 2026... (is) going to be close to nine billion euros," chief financial officer Jose Antonio Barrionuevo told journalists in an online call.
Revenue climbed 4.5 percent to 9.74 billion euros for IAG, which counts Irish airline Aer Lingus and Spanish carrier Vueling among its other brands.
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IAG chief executive Luis Gallego said the company had delivered a "resilient quarter... despite the very high price of jet fuel and a number of one-off disruption events".
The group said its overall flight capacity had been hit "by cancellations due to the conflict in the Middle East, together with aircraft availability linked to engine issues and disruption related to air traffic control disruption".
Britain's air traffic control service suffered a technical glitch in September that sparked chaos.
The aviation sector has since been knocked by a series of hoax bomb threats.
Italian, French and Bulgarian fighter jets scrambled Thursday as about 20 commercial flights were hit by a third day of fake bomb alerts across Europe.
"We hope that the situation ends soon, but we cannot do anything else than to follow the strict procedures that we have," Gallego said during the conference call.
Regarding airfares, he acknowledged that "it's difficult to predict what is going to happen next year".
"Prices are going to be determined by competition capacity and demand, and we are following that very carefully," Gallego said.
Irish no-frills airline Ryanair said Monday that it would begin a cost-cutting drive and hike fares next year to help offset soaring jet fuel prices.
Shares in IAG gained 1.8 percent following its update Friday, making it a rare riser with global stock markets in retreat on tech sector concerns.
They "gained some altitude after its results revealed resilient demand on its core transatlantic routes", said Dan Coatsworth, head of markets at AJ Bell.
"The ability to maintain margin guidance is impressive in the circumstances and is supported by the company's healthy contingent of premium and corporate travellers," he added.
"These customers tend to be less price sensitive, and demand is further underpinned by customer loyalty schemes."
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
