London, March 2, 2026, 09:04 GMT — Regular session
- IAG shares slipped, hit by a pullback in travel stocks as oil prices climbed and disruptions spread further across the Middle East.
- British Airways has canceled several flights to the Middle East, giving passengers the option to rebook or claim a refund.
- IAG will kick off its initial €500 million share buyback on Monday.
International Consolidated Airlines Group SA, the parent of British Airways, saw its shares slide Monday. Investors retreated from travel names after fresh Middle East tensions sent oil prices sharply higher.
Crude prices hit airlines directly via jet fuel costs. And when airspace or key hubs get disrupted, that’s a double whammy—leading to cancellations, detours, and a straightforward cost headache turning into a mess of operational problems.
IAG (ICAG.L) slid 6.8% to 395 pence, dropping 28.7 pence during the session. The airline group, according to a regulatory filing, will kick off a €500 million share buyback on March 2, planning to wrap it up by May 29 at the latest. Morgan Stanley Europe SE and Goldman Sachs Bank Europe SE are set to handle the repurchases. Qatar Airways, meanwhile, will offload shares to the banks on a pro rata basis so its voting power stays put, the document showed.
Shares kicked off at 381.3p, dipping to as low as 373.9p and hitting 397.1p on the upside. Trading volume landed around 14.4 million shares.
British Airways has cancelled several flights to the Middle East. Customers scheduled to fly between London Heathrow and Abu Dhabi, Amman, Bahrain, Doha, Dubai, or Tel Aviv through March 15 are being offered free date changes. Travellers booked up to and including March 8 can ask for a full refund.
IAG shares dropped alongside a broader selloff on the continent. The STOXX 600 shed 1.8%. Travel and leisure names fared worse, down 4.4%. Lufthansa tumbled 11% as it prolonged flight suspensions. Oil surged up to 13% after Strait of Hormuz shipping snarled, sending energy stocks higher.
“Higher fuel costs, flight cancellations, and the additional hit from rerouting around closed airspace are moving the market,” said Morningstar equity analyst Nicole Lim. Brendan Sobie, an aviation analyst in Singapore, also flagged “potential impact of higher oil prices” alongside wider political and economic jitters. Reuters
The drop comes just days after IAG posted annual profits ahead of forecasts and unveiled plans to hand 1.5 billion euros back to investors over the next year, kicking off with a buyback due by the end of May. On a media call, Chief Executive Luis Gallego said, “since Q3 we have seen a rebound” in transatlantic economy traffic. He also noted solid performance in premium and corporate bookings at British Airways. Reuters
Buybacks or not, when crude jumps, traders often treat airline stocks as fuel surrogates. Sharp oil gains leave carriers scrambling—there’s little time to adjust fares or put new hedges in place.
IAG faces a double whammy if oil prices stay high for a stretch and schedule disruptions drag on. Costs go up, revenue takes a hit. The impact isn’t just limited to flights through the affected region, either—rerouted planes and crews can ripple trouble elsewhere.
Oil stays on the radar, with investors eyeing any signs of de-escalation. Focus also turns to British Airways’ Middle East schedules as the March 15 rebooking deadline gets closer.
