LONDON, Nov. 6, 2026 — IAG, which owns British Airways, Iberia, Vueling, Aer Lingus and LEVEL, reported a 15.9% fall in third-quarter operating profit to €1.73bn, below the €1.81bn analysts expected. It now expects 2026 capacity to be slightly lower than last year, its first decline since 2022. Aer Lingus’s own results are covered in a separate story.
Q3 2026 at a glance
| Measure | Result |
|---|---|
| Operating profit before exceptional items | €1.73bn, down 15.9% |
| Operating margin | 17.7% |
| Pre-tax profit | €1.63bn, down 12.9% |
| Revenue | Up 4.5% |
| Jet fuel cost | Up 30.4%, adding €570m in the quarter |
| Full-year 2026 fuel bill (after hedging) | €8.9bn expected |
| 2027 fuel hedged | 45% |
| Q4 bookings | 85% booked |
| Interim dividend | Up 10% to €0.053 per share |
CEO Luis Gallego said: “For the quarter we have achieved an operating margin before exceptional items of 17.7%.”
Other points
- Capacity: IAG blames Middle East disruption linked to the Iran war for the dip. Iberia and BA moved third-quarter flying away from the Middle East.
- Fares: BA aims to pass on close to 100% of higher fuel costs over the full year. It did not say how much fares will rise.
- NATS outage: the Sept. 8 air traffic control failure cost IAG €25–30m and affected 500 flights and 85,000 customers.
- Buyback: IAG is continuing the final €500m tranche of its €1.5bn share buyback.
- Bomb-threat hoaxes: Gallego said each threat must be taken seriously, noting that “with an email or a phone call you can create a problem.”
- Avios VAT fight: HMRC is challenging how IAG has accounted for VAT on Avios.
- €638m (about $710m) is at stake, going back to March 2018.
- IAG books €516m as an asset it expects to recover if it wins, and €122m as a contingent asset.
- A tribunal hearing is expected later in 2026 (date TBA), with a decision in 2027.
What it means for non-revs
- With Q4 85% booked and capacity slightly down, expect full aircraft across BA, Iberia and Vueling through the holiday period. Plan pass travel on off-peak days.
- Capacity moved away from the Middle East went to other markets. Middle East flying is still reduced, so check whether a flight is still operating before you list for it.
- Hoax bomb threats have diverted European flights this week. Allow extra connection time and carry essentials in case a diversion strands you overnight.
- Employees who collect Avios should follow the VAT case. View from the Wing says an outcome against IAG could leave members with less valuable points.
Sources
- RTÉ (Reuters) — IAG sees 2026 capacity slightly down year-on-year
- FlightGlobal — IAG profits take cost hit in third quarter despite strong yields
- The Independent via Yahoo Finance UK — British Airways owner hit by fuel costs and up to £25m air traffic chaos bill
- Aviation News Online — British Airways’ owner lifts dividend 10% and continues share buyback despite fuel price profit hit
- View from the Wing — British Airways $710 Million Tax Fight Could Leave Members With Less Valuable Points
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