London, Jan 20, 2026, 09:36 GMT — Regular session
- IAG shares fell in early London trading amid a drop in risk appetite.
- Oil prices held steady, keeping airlines on edge over jet fuel expenses.
- Investors are on the lookout for the next company update as trade policy headlines continue to swirl.
Shares of International Consolidated Airlines Group SA (IAG.L), the parent company of British Airways, dropped 1.8% to 403.2 pence by mid-morning Tuesday, after starting the day at 409.3 pence. The stock swung between a high of 409.7 pence and a low of 402.7 pence, with around 2.1 million shares changing hands. 1
The decline is significant since airlines are caught at the crossroads of key market pressures: fuel costs, consumer demand, and political uncertainty. When traders shift into defensive mode, travel stocks tend to be the first on the chopping block, facing rapid sell-offs before much scrutiny.
European stocks slipped again, with the STOXX 600 falling 0.7% in early trading as investors digested U.S. President Donald Trump’s tariff threat involving Greenland. Earnings reports and policy cues from the World Economic Forum in Davos are also drawing attention this week. 2
Oil offered little comfort to airlines. Brent hovered around $63.78 a barrel, with U.S. WTI near $59.58. Trump’s weekend tariff threats kept markets jittery. ING commodities strategists noted, “A weaker U.S. dollar provided some support to oil and the broader commodities complex,” while IG market analyst Tony Sycamore added, “This resilience in the world’s top oil importer provided a lift to demand sentiment.” 3
On the company front, IAG made no fresh regulatory announcements on the London Stock Exchange’s RNS feed Tuesday morning. 4
Fuel moves quickly. Airlines typically hedge fuel costs by locking in prices ahead of time, but this strategy covers just a portion of their usage and can fall behind rapid shifts in crude and jet fuel prices.
Trade policy remains a key variable. Should tariff threats turn into actual measures, business confidence could take a hit, along with discretionary travel—well before passenger numbers start to reflect the change.
Peers wrestle with the same challenges. Investors often compare easyJet, Ryanair, Lufthansa, and Air France-KLM to gauge how the market is weighing demand against costs on any given day.
Traders are juggling focus between oil prices and European equity markets in the short run. Moves in the dollar also carry weight, influencing crude costs and, by extension, what airlines might face on expenses.
But things can turn fast for airlines. A spike in crude, a sudden shift in sterling, or new disruptions on major routes can tighten margins before fares adjust—and that’s when a mild selloff can spiral.
IAG is set to release its FY-2025 results on Feb. 27. Investors will be watching closely for updates on demand, costs, and cash flow as the sector faces a tougher macro environment. 5
