Aer Lingus parent IAG’s profits down more than a third after fuel cost hit

By Neil Lancefield, Press Association Transport Correspondent

Aer Lingus’ parent company International Airlines Group (IAG) has revealed a slump in profits of more than a third because of soaring fuel costs.

The group reported pre-tax profits tumbling to €995 million in the three months to the end of June, from €1.5 billion a year earlier.

The company’s combined fuel costs and emissions charges rose by €413 million, representing a 23% spike linked to the conflict in the Middle East.

Its revenue was stable at €8.9 billion, while its operating profit was down 25% to €1.3 billion.

IAG chief executive Luis Gallego insisted the group has “excellent fundamentals”, and its diverse portfolio of brands means it is well positioned to deal with “near-term headwinds”.

The company – which also owns the British Airways, Iberia, Vueling and Level airlines – said it expects demand for travel across its network to “remain strong”.

About 57% of its seats have been booked for the second half of the year, with revenue from those bookings in line with last year.

It added that it expects its long-haul markets to “remain positive”, and short-haul flights to be “competitive”.

IAG’s pre-tax profits for the six months to June 30 were down 19%, from €1.7 billion to €1.4 billion.

Its revenue over this period rose by 1% to €16.1 billion.

Some 57.9 million passengers flew on the company’s flights in the first half of the year, which was relatively stable compared with 2025.

Mr Gallego said: “With these results, IAG has again demonstrated that its excellent fundamentals are supporting continued value creation for our shareholders, despite the impact of the crisis in the Middle East and wider geopolitical events.

“We are well positioned to deal with these near-term headwinds with a diverse portfolio of world-class brands in large and attractive markets; industry-leading margins; significant free cash flow and a strong balance sheet; and attractive shareholder returns.

“Our long-term transformation programme has created the resilience that we are now benefiting from – products and services that our customers value, efficient and punctual operations and a low cost base.”

He added: “We remain confident in our business model and strategy that has made us one of the best-performing airline groups in the world.”

Aarin Chiekrie, equity analyst at financial services company Hargreaves Lansdown, said IAG is “flying through the year relatively well given the difficult market conditions”.

He went on: “The headline figures may look disappointing at first glance, with broadly flat revenue and second-quarter profits declining at a double-digit rate due to soaring fuel costs.

“But context is key, and profits held up better than many peers.

“They were even better than markets expected, thanks to a tight grip on everyday costs and a lower-than-forecast fuel bill.”