London, Jan 16, 2026, 09:07 GMT — Regular session
Shares of International Consolidated Airlines Group (ICAG.L), the parent company of British Airways, ticked up 0.2% to 411.5 pence in early London trading on Friday. The stock held steady, following a week dominated by energy price swings and security news. (Iairgroup)
Fuel ranks high among airlines’ expenses, making crude oil prices a quick gauge for profit margins. This sensitivity usually appears first in European carriers, often ahead of any booking updates from the companies.
Route disruption can cut both ways. Longer flights drive up fuel consumption and crew hours, pushing costs higher. That extra strain can even lead to cancellations, hitting both revenue and expenses.
Brent held steady at $63.81 a barrel by 0749 GMT, retreating from multi-month highs hit earlier this week as hopes for a U.S. strike on Iran faded, Reuters reported. “Sentiment is driving markets, but the impact of headlines is always short-lived,” said Priyanka Sachdeva, senior market analyst at Phillip Nova. Kelvin Wong of OANDA pointed to developments in Iran and China’s upcoming data as key near-term factors. (Reuters)
Airlines remain cautious, still steering clear of Iranian and Iraqi airspace. Despite Iran reopening its skies after a brief shutdown, European carriers like British Airways, Lufthansa, and Wizz Air kept avoiding the area on Thursday, Reuters reported, citing flight tracking sites. IAG confirmed that all British Airways flights to Bahrain are cancelled through Jan. 16. Meanwhile, Dyami’s security intelligence director Eric Schouten warned of “sudden airspace closures and flight disruptions” ahead. (Reuters)
IAG ended Thursday at 410.8 pence, having fluctuated between 403.5 and 411.8 pence during the session, per Yahoo Finance data. Early trading on Friday kept the stock near that level as investors remained focused on cost pressures rather than passenger numbers. (Yahoo Finance)
For now, the dynamic is straightforward: weaker crude prices offer relief, yet rerouting and cancellations quietly raise costs and complicate operations, particularly on long-haul routes.
The downside risk remains right alongside the upside. Should tensions with Iran escalate and crude prices surge, airline stocks could quickly lose their gains. Plus, prolonged flight detours would push up unit costs, even if ticket demand stays steady.
In the short term, traders will watch for fresh flight disruption news and whether oil prices hold steady following recent volatility. This is crucial for all European airlines with Middle East ties, not just IAG.
IAG’s next key event is its FY-2025 earnings report on Feb. 27. Investors will focus on any guidance around costs, demand, and the group’s outlook for trading conditions in 2026. (Iairgroup)
