UKIAG hit by fuel costs and capacity cut, but stays Barclays' top pick
Fuel and emissions costs crush Q2 profit IAG's second-quarter pre-tax profit fell more than a third to €995m as fuel and emissions charges jumped 23% (€413m) on Middle East conflict. Revenue held at €8.9bn, but higher costs squeeze earnings, weighing on the shares.
This is the single biggest new financial event for IAG this period, directly explaining the profit drop.
IAG cuts 2026 capacity guidance IAG lowered its 2026 capacity plans, meaning it will fly fewer seats than previously expected. Less supply can support fares, but the cut signals weaker growth and pushed the shares down 1.5% on the day.
A fresh guidance cut is a key driver of the stock's direction and future earnings expectations.
Loyalty unit shines, but group margin slips IAG Loyalty's operating profit rose £48m to £239m, a bright spot. But group operating profit fell €121m year-on-year to €1.757bn and margin slipped to 10.9%, while net debt improved to €4.7bn. Overall a mixed update.
It shows the underlying profit trend and a strong sub-business, giving a fair picture beyond the headline drop.
Barclays names IAG preferred major airline Barclays downgraded Ryanair and Norwegian on high fuel costs, but kept IAG as its preferred major airline with an Overweight rating. That analyst support can lift IAG shares relative to weaker rivals, even as fuel pressures the whole sector.
It is a new, positive analyst call that directly affects how investors view IAG versus peers.
