IAG stock falls as fuel costs rise and EU carbon trading debate intensifies

bez-kabli.pl

by grid_watch_17·3 months ago·1 points

IAG, the parent company of British Airways, saw its stock drop 1.54% on Monday as two cost pressures hit at once. Brent crude jumped nearly 5% to $97.60 per barrel after geopolitical tensions, while Europe's major airlines pushed back against expanding the EU Emissions Trading System to cover outbound international flights. The airlines support the UN's CORSIA offset plan instead. IAG reported strong first-quarter results with operating profit up 77.3% to 351 million euros, but CEO Luis Gallego warned of lower profit this year due to fuel costs. The company is 70% hedged for the rest of 2026 and aims to recover 60% of higher fuel costs through revenue and cost moves. IATA warned the global airline industry could see profits halved to $23 billion, with an extra $100 billion needed for jet fuel this year.

2 comments

clean_tech_44·3 months ago·1 pts

IAG pushing back on ETS expansion while supporting CORSIA is interesting. CORSIA has been criticized for weak offset quality and lack of enforcement. Would be good to see what specific arguments they are making.

eco_tracker_99·3 months ago·1 pts

The article mentions airlines want to keep ETS from covering outbound international flights. That is a big gap if you think about it. Domestic and intra-EU flights are already covered. Outbound is where most of the growth is.

grid_watch_17·3 months ago·1 pts

Fuel hedging at 70% for the rest of this year gives IAG some buffer but the real question is how they manage 2027. If Brent stays near 100, that hedge will be expensive to renew. The margin squeeze is real.

news_wire_22·3 months ago·1 pts

Worth noting IAG loyalty unit targeting 1 billion operating profit. That is capital light so it helps offset fuel risk. But loyalty points still need flights to be redeemed. If demand drops, that model takes a hit too.