IAG Profits Fall as British Airways Sees Stronger Asia Demand

International Airlines Group has reported lower profits for the first half of 2026, despite a small increase in revenue and continued demand across several key markets.

The group, which owns British Airways, Iberia, Aer Lingus, Vueling and LEVEL, recorded revenue of €16.06 billion, up 1% compared with the same period last year.

Reported operating profit fell by 14.4% to €1.61 billion, while profit after tax dropped by 20.6% to €1.03 billion. Operating profit before exceptional items fell by 6.4% to €1.76 billion.

IAG said higher fuel costs and continued disruption in the Middle East had affected its performance, with British Airways, Iberia and Vueling suspending or reducing several services across the region.

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Capacity across Africa, the Middle East and South Asia fell by 9.4% during the first half of the year, with IAG expecting much of the disruption to continue for the remainder of 2026.

However, British Airways benefited from increased demand from passengers looking to avoid travelling through the Middle East, particularly corporate customers.

The airline added capacity to Bangkok, Kuala Lumpur and Singapore, helping IAG increase its Asia-Pacific capacity by 7.7%. Passenger unit revenue across the region rose by 8.4%.

The North Atlantic remained IAG’s largest market, with British Airways reporting strong performance supported by its Heathrow network, premium cabins and corporate demand.

Iberia and Aer Lingus also continued expanding their transatlantic networks with the Airbus A321XLR. Iberia added services including Toronto and Newark, while Aer Lingus introduced new routes to Cleveland, Pittsburgh and Indianapolis.

British Airways also continued its transformation programme, with further updates to its website and mobile app. Starlink installations have begun across British Airways, Iberia and Aer Lingus, with around half of IAG’s long-haul fleet expected to be equipped by the end of 2026

IAG now expects its overall capacity for 2026 to remain broadly unchanged compared with last year.

The results show a mixed first half for the group. Higher costs and Middle East disruption pushed profits lower, while British Airways benefited from stronger demand for direct services to Asia.