The owner of British Airways has warned that the war in Iran will saddle the group with a €2 billion fuel bill shock this year, taking the gloss off a bullish set of first-quarter numbers and forcing the City to rein in its profit expectations.
International Airlines Group (IAG), the FTSE 100 carrier that also owns Iberia, Vueling and Aer Lingus, told shareholders that surging jet fuel prices triggered by the closure of the Strait of Hormuz, the chokepoint through which roughly a fifth of the world’s oil and gas flows, would push its annual fuel costs to about €9 billion, up from €7 billion in 2025.
Despite the warning, Luis Gallego, chief executive, struck a defiant note, insisting the group was “uniquely positioned” to ride out the turbulence. Crucially, IAG said it had no plans to mothball routes, having locked in supplies through its long-standing self-supply arrangements at its main hubs.
“We currently see no issues with fuel availability in our main markets, particularly as we benefit from the strength of our supply chain, stocks and particularly our self-supply arrangements at our key hubs,” Mr Gallego said. “We are confident in fuel availability through the summer.”
The reassurance will be welcomed by holidaymakers and the City alike, which had feared a repeat of the operational chaos that plagued European carriers during previous oil shocks. Mr Gallego pointed to the group’s “leading positions across diverse markets, strong brands, structurally high margins and strong balance sheet” as a buffer against the geopolitical squall.
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