IAG Q1 Profit Soars 77% to €351M Despite Rising Fuel Costs

According to IAG's financial statement for the three months ended March 31, 2026, the group's total revenue rose 1.9 per cent year-on-year to 7.18 billion euros, while profit after tax increased 71 per cent to 301 million euros.

"We are pleased to report a strong first quarter, in which revenue grew by 1.9%, and profit grew by 77.3% to EUR351 million, reflecting continued strong demand for our networks and airline brands," IAG Chief Executive Officer Luis Gallego said in the statement.

Passenger revenue rose 3.8 per cent to 6.23 billion euros, driven by higher yields and a higher passenger load factor, while passenger revenue per available seat kilometre (PRASK) increased 3.5 per cent.

The company said demand remained robust across most markets, especially in premium cabins and in North and South transatlantic markets, which together account for around half of the group's capacity.

"We have seen strong demand across most of our markets, particularly in our Premium cabins and in both the North and South transatlantic markets, which together represent around half of our capacity," the company said.

However, the airline group cautioned that rising jet fuel prices linked to the West Asia conflict are expected to weigh on profitability in the coming quarters.

"Whilst the first quarter was relatively unaffected by the Middle East conflict, we expect it to have a more substantial impact throughout the rest of the year as the increase in the fuel cost starts to manifest itself," the company said in its outlook.

The group added that it now expects profit for the year to be lower than originally anticipated at the beginning of 2026.

Fuel costs and emissions charges rose 1.2 per cent to 1.74 billion euros during the quarter. IAG said jet fuel prices surged sharply from late February due to the conflict in West Asia and the disruption to shipping and oil exports through the Strait of Hormuz, with the spot jet fuel price at the end of March reaching approximately $1,725 per metric tonne, double the price at the end of February

The company noted that it is "well hedged" for the rest of the year at 70 per cent and currently sees no issues with jet fuel supply in its main markets.

"We are actively managing the uncertainty created by the fuel price increase and its impact, taking the necessary action on yields, costs and capacity," Gallego said.

IAG also highlighted the strength of its balance sheet, with net debt reducing to 4.18 billion euros from 5.95 billion euros at the end of December 2025. Total liquidity stood at 12.73 billion euros.

The airline group said it remains on track to continue with the remaining 1 billion euros of excess cash returns through February 2027.

"We are confident in our business model and strategy, which has made us one of the best-performing airline groups in the world, and which gives us the opportunity to prove our resilience," Gallego said.

- ANI