05:48 AM EDT, 07/31/2026 (MT Newswires) -- International Consolidated Airlines Group (IAG.L, IAG.MC), d/b/a IAG, warned of flat capacity growth for full-year 2026 as it reported lower attributable profit in the first half due to the impact of the ongoing Middle East conflict. The airline holding company's total revenue in the six months ended June 30 reached 16.06 billion euros, compared with 15.91 billion euros a year ago, amid market challenges, including the crisis in the Middle East and other geopolitical events, according to a Friday release. The group attributed the increase to strong travel demand and its diverse portfolio of markets and customer propositions. On the other hand, profit attributable to equity holders decreased to 1.03 billion euros from 1.30 billion euros. IAG said it was able to partly mitigate the effects of significant increases in fuel prices with disciplined cost control. Looking ahead, the airline group expects capacity for full-year 2026 to be flat compared with 2025. It remains optimistic that travel demand will be strong amid market challenges, with a bullish outlook for both its long- and short-haul markets. However, the company is estimating a higher total fuel cost scenario of 8.6 billion euros for the year, compared with the previous estimate of 8.3 billion euros. "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," commented Chief Executive Officer Luis Gallego. Shares of the company decreased 1% in London before midday, paring back some losses in earlier trading. "We do not expect the 2Q beat to translate into a FY26E consensus upgrade (with consensus at EUR4.52bn for EBIT pre-exceptionals in FY26E above RBCe of (Euro)4.31bn). Capacity guidance has been trimmed, and we think the more bullish end of the market was hopeful that more than ~60% of higher fuel costs could be recovered in FY26," RBC Capital Markets said in a quick-take note following IAG's earnings release. "However, whilst IAG's outlook could clip the higher end of consensus, we don't expect a significant downgrade overall either, with recent fuel cost scenarios less bad than projected by consensus, and with consensus forecasting a ~13% operating margin in FY26, within the 12-15% guided range."

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