British Airways owner issues profit warning over soaring jet fuel costs

The parent company of British Airways has issued a profit warning and said it expects to spend about €2bn (£1.72bn) more on fuel than planned this year due to the Iran war. International Airlines Group (IAG), which also owns Aer Lingus, Iberia and Vueling, said it has hedged 70% of its expected fuel use for this year with costs expected to be about €9bn, up from previous forecasts of €7.1bn. The company said that it expects to recover about 60% of the higher fuel costs this year through “revenue and cost management actions”. “We are actively managing the uncertainty created by the fuel price increase and its impact, taking the necessary action on yields, costs and capacity,” said Luis Gallego, chief executive of IAG. “The impact of the higher fuel price will inevitably lead to lower profit this year than we originally anticipated.” Global oil prices have reached peaks of $126 a barrel as the conflict continues to weigh on markets, having stood at $72 just before the conflict began. On Friday, oil was trading at just above $100 per barrel. Speaking as IAG reported on first-quarter trading, Gallego added that IAG is not currently seeing any issues with fuel availability in its main markets, and is confident about fuel availability through the peak summer period. However, across the industry 2m airline seats have been cut from this month’s schedules as airlines redraw their operations because of soaring jet fuel prices, according to data released earlier this week by Cirium. …