IAG lifts dividend, presses ahead with buyback despite fuel costs hitting Q3 profits

(Sharecast News) - IAG reported a lower third-quarter profit on Friday as a sharp rise in fuel costs and operational disruption offset strong revenue growth across its transatlantic business, although the airline group increased its dividend and pressed ahead with its share buyback programme. The British Airways owner said operating profits before exceptional items fell to €1.73bn from €2.05bn a year earlier, as total fuel costs jumped 30.4% and air traffic control outages disrupted operations during the quarter.mRevenues increased 4.5% to €9.74bn, supported by strong passenger demand, higher cargo revenues and continued growth at its Loyalty business.

Long-haul routes remained the standout performer, with North Atlantic unit revenues rising 11%, as British Airways posted a 12% increase, while South Atlantic demand also remained robust. IAG said strong pricing trends were continuing into the fourth quarter and early 2027.

Despite the pressure from fuel prices and disruption, IAG said it remains on track to achieve a full-year operating margin before exceptional items of at least 12% and also highlighted its strong financial position, with net leverage of 0.6x at the end of September.

Reflecting that strength, IAG raised its interim dividend by 10% to €0.053 per share and confirmed that the final €500m tranche of its €1.5bn share buyback programme has now commenced.

Looking ahead, IAG expects full-year capacity to be slightly lower than 2025 levels, reflecting the loss of Middle East flying, disruption across its airlines and a continued focus on preserving profitability rather than pursuing growth.

As of 0845 GMT, IAG shares were up 5.12% at 449.09p.









Reporting by Iain Gilbert at Sharecast.com

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