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2026 Quarter One ResultsHighlights
Chief Executive Officer
A strong first quarter; confident in the long-term prospects
Revenue in the first quarter increased by 1.9% to €7,181m reflecting continued strong demand for our network and airline brands
Operating profit increased by 77.3% in the first quarter, driven by revenue growth and limited impact on cost from the Middle East conflict. Operating margin improved by
2.1pts to 4.9%
Our capital-light Loyalty business grew its revenue by 10.0% and profit increased by 32.6% at a 20.1% margin
Strong balance sheet: net debt of €4,183m; net leverage at 0.5x. Liquidity of €12,731m
On track to complete the remaining €1bn excess cash return by end Feb 2027
Strong business model and strategy, transformation programme and track record on execution means we are uniquely positioned to navigate current headwinds
2026 Quarter One Results 4
Financial results
Nicholas Cadbury Chief Financial and Sustainability OfficerDelivering a strong first quarter
€m IAG operating profit bridge by driver: Strong operating profit growth
€m IAG operating profit bridge by business: Profit improvement in most of our brands
+77.3%
198
510
(30)
10
(198)
(187)
48 351
198
+153
27
27
98
(48)
28 21 351
Q1-25 Passenger
revenue
Cargo revenue
Other revenue*
Non-fuel costs
Fuel costs FX Q1-26
Q1-25 BA IB (excl. LEVEL)
VY EI IAG
Loyalty
Other* Q1-26
2.8%
Operating margin
4.9%
2.8%
5.5% 9.1% (4.6)% (24.5)% 20.1%
4.9%
*Other revenue includes MRO and Handling businesses, IAG Loyalty (including British Airways Holidays)
All metrics are shown before exceptional items
*Other includes LEVEL, IAG Cargo, IAG GBS, ICAG and consolidation adjustments
2026 Quarter One Results 6
Improving margins across most of our businesses
Q1 2026 (€m) | vLY |
420 | (4.1)% |
406 | (3.4)% |
(103) | (48) |
(24.5)% | (12.0)pts |
6,795 | +4.6% |
5.97 | (7.6)% |
5.82 | +2.4% |
Total revenue
Passenger revenue
Operating result before exceptional items Operating margin beforeexceptional items
ASK (m)
PRASK (cts/p)
Non-fuel CASK (cts/p)
579
Q1 2026
(£m)
290
116
20.1%
+3.4pts
vLY
+10.0%
+1.8%
+28
Q1 2026 (£m) | vLY |
3,389 | +7.1% |
3,167 | +8.2% |
186 | +90 |
5.5% | +2.5pts |
41,045 | (0.3)% |
7.72 | +8.5% |
5.66 | +4.1% |
Q1 2026 (€m) | vLY |
1,808 | (1.1)% |
1,352 | +4.5% |
164 | +27 |
9.1% | +1.6pts |
20,577 | (1.1)% |
6.57 | +5.6% |
6.20 | (1.5)% |
Q1 2026 (€m) | vLY |
616 | +8.6% |
609 | +8.0% |
(28) | +27 |
(4.6)% | +5.1pts |
8,961 | (1.9)% |
6.80 | +10.1% |
5.05 | +5.5% |
+35
132
IAG Loyalty operating profit on pre-HMRC VAT dispute basis:
Iberia figures exclude LEVEL
2026 Quarter One Results 7
Demand driving strong yields in all our markets
PRASK1 | Total PRASK ccy2 | ASKs | |
Q1 | 3.5% | 8.2% | +0.2% |
CRASK | Europe CRASK ccy | ASKs | |
Q1 | 3.5% | 6.0% | -1.6% |
CRASK | Domestic CRASK ccy | ASKs | |
Q1 | 16.8% | 18.2% | -2.5% |
22.9% of Group Q1 ASKs 8.2% of Group Q1 ASKs
North Atlantic CRASK CRASK ccy | ASKs | ||
Q1 | -0.2% | 6.8% | -0.4% |
CRASK | Asia Pacfic CRASK ccy | ASKs | |
Q1 | 3.4% | 8.6% | +19.3% |
27.7% of Group Q1 ASKs
5.0% of Group Q1 ASKs
Latin America & Caribbean CRASK CRASK ccy ASKs
Q1 4.5% 9.2% +1.9%
22.8% of Group Q1 ASKs
Africa, Middle East & South Asia
CRASK CRASK ccy ASKs
Q1
2.1%
8.2%
-2.2%
13.4% of Group Q1 ASKs
1PRASK represents total passenger revenue divided by ASKs. Regional CRASK represents passenger revenue excluding certain items that are not directly assigned at a route level (e.g. joint business payments/receipts, FX hedging gains/losses, EC261 & UK261 compensation, and adjustments to assumptions for unused tickets). 'ccy' represents data at constant currency.
2026 Quarter One Results 8
2Regional constant currency data presented is not an IFRS metric, and is based on internal IAG analysis to provide a directional view of foreign exchange impacts, particularly given the significant impact of the US dollar and Sterling in IAG accounts.
Q1 non-fuel unit costs in line with our expectations, with FX benefit
Cost category
Q1-26 unit cost (% vLY)
Q1 2026
Employee
0.5%
Reflects capacity-driven headcount growth and the impact of wage deals
Supplier*
(4.0)%
Transformation initiatives partially mitigated inflationary pressures
Ownership
10.0%
Increase driven by new aircraft, alongside customer-focused and digital investments
Total non-fuel
(0.9)%
Fuel
0.9%
Fuel prices increased from late February, reflecting the conflict in the
Middle East; the impact on the quarter was largely mitigated by jet fuel contract pricing mechanisms and the Group's hedging strategy
Total unit cost
(0.5)%
*Supplier costs include costs related to growth of the Group´s non-airline businesses, including Iberia´s MRO and Handling businesses and British Airways Holidays
Numbers in brackets indicate favourable movements All metrics shown are before exceptional items
2026 Quarter One Results 9
Adjusted EPS increased by 56.5% in Q1 2026
Three months to 31 March€m | Before exceptional items 2026 | Exceptional items | Reported 2026 | Before exceptional items 2025 | Exceptional items | Reported 2025 |
Revenue | 7,181 | - | 7,181 | 7,044 | - | 7,044 |
Operating costs | 6,830 | - | 6,830 | 6,846 | - | 6,846 |
Operating profit | 351 | - | 351 | 198 | - | 198 |
Finance costs | (180) | - | (180) | (219) | - | (219) |
Finance income | 62 | - | 62 | 85 | - | 85 |
Net change in fair value of financial instruments | 162 | - | 162 | 75 | - | 75 |
Net financing credit relating to pensions | 27 | - | 27 | 21 | - | 21 |
Net currency retranslation (charges)/credits | (23) | - | (23) | 134 | - | 134 |
Other non-operating credits/(charges) | 23 | - | 23 | (55) | - | (55) |
Profit before tax | 422 | - | 422 | 239 | - | 239 |
Tax | (121) | - | (121) | (63) | - | (63) |
Profit after tax | 301 | - | 301 | 176 | - | 176 |
Adjusted EPS before exceptional items (€c) | 3.6 | 2.3 |
2026 Quarter One Results 10
€m | 31 March 2025 | 31 December 2025 | 31 March 2026 |
Gross debt | 15,486 | 14,267 | 14,244 |
of which bank and other loans | 1,706 | 1,978 | 1,802 |
of which asset financed and lease liabilities | 13,780 | 12,289 | 12,442 |
Gross debt / EBITDA before exceptional items | 2.2x | 1.9x | 1.8x |
Cash, cash equivalents and interest- bearing deposits | 9,357 | 8,319 | 10,061 |
Net debt | 6,129 | 5,948 | 4,183 |
Net debt / EBITDA before exceptional items | 0.9x | 0.8x | 0.5x |
Total liquidity (cash and facilities) | 12,355 | 10,948 | 12,731 |
Continued balance sheet strengthening
*Rolling last four quarters EBITDA before exceptional items
Net leverage of 0.5x, reflecting strong profitability and cash generation
Gross leverage of 1.8x, driven by higher EBITDA*
Total liquidity (cash and facilities) of
€12.7bn
Investing in our fleet:
one A321XLR delivered in Q1
17 deliveries expected in 2026, majority of which unencumbered
Full Year capex expected to be €3.5bn
2026 Quarter One Results 11
Middle East Conflict
Capacity
c.3% of total Group pre-conflict ASKs flew to the Middle East region
some redeployment to markets benefitting from diverted demand
further fleet resilience added to better manage engine supply chain issues
Jet fuel hedging and availability
well-hedged for the rest of the year at 70% as at 5 May
confident of jet fuel supply in our main markets through the summer
regular assessment of longer term schedules
2026 Quarter One Results 12
Outlook
Well-positioned to manage current headwinds due to the unique strengths of the Group
Demand continues to be robust; booked revenue at 80% for Q2
Expect to be able to recover c.60% of higher fuel cost through revenue and cost initiatives, with a strong track record of execution
Expect impact of higher fuel cost to result in lower profits and free cash flow than originally anticipated
Continued strong free cash flow generation - on track to continue with the remaining €1bn of excess cash return programme
Confident in our business model and strategy to prove our resilience
2026 Quarter One Results 13
Appendices
Modelling assumptions FY2026
Capacity will be lower than the 3% increase guided at full year results in February as a result of our actions taken already. At present we expect it to increase by c.1% in Q2 and c.2% in Q3. We continue to review our longer term capacity plans.
Based on the fuel curve as at 5 May 2026, including our hedging positions and sustainability costs, our fuel cost would be c.
€9bn. We continue to execute our hedging policy and are currently 70% hedged for the remainder of the year with a mix of instruments.
We expect to recover around 60% of the higher fuel cost during this year through revenue and cost management, reflecting the mix of markets in which we operate.
We continue to expect to generate significant free cash flow in the year but given the impact of the Middle East conflict for it to be less than the €3bn guided at full year results in February. Capex is now expected to be around €3.5bn (from €3.6bn previously).
2026 Quarter One Results 15
Fuel hedging - 70% hedged for 2026
Effective blended price post fuel and FX hedging*
$1,065/mt
$1,035/mt
$1,005/mt
$975/mt
$945/mt
$950/mt
As per Q1 2026 resultsJet fuel price scenario
$/€ scenario Hedge ratio
Q2 2026$1,460/mt
1.155
75 %
Q3 2026$1,310/mt
1.155
68 %
Q4 2026$1,160/mt
1.155
62 %
Q1 2027$1,060/mt
1.155
49 %
Q2 2027$960/mt
1.155
40 %
Q3 2027$960/mt
1.155
35 %
As per Q1 2026 results
Jet fuel price scenario
FY 2026
Fuel cost
c€9.5bn
c€9.8bn
$1,460/mt
$1,660/mt
c€8.0bn
c€8.5bn
$760/mt
$960/mt
$1,260/mt c€9.0bn
SensitivityFull year 2026 fuel cost expected to be c.€9.0bn based on jet fuel forward curve and foreign exchange rates at 5 May 2026
* Effective blended price excluding into plane cost
2026 Quarter One Results 16
Q2 and Q3 capacity plans
Airline contribution to IAG ASK growth by quarter vLY0% +1% +2%
Q1-26 Q2-26 Q3-26
BA Iberia LEVEL Aer Lingus VuelingNote: British Airways includes BA Cityflyer and BA Euroflyer; Iberia includes Iberia Express
2026 Quarter One Results 17
Measure | IFRS/APM | Definition | Source of calculation |
Adjusted earnings per share | APM | Based on results before exceptional items after tax and adjusted for | Q1 2026 Interim Management Statement (alternative performance measures section, |
earnings attributable to equity holders and interest on convertible bonds, | note b: Adjusted earnings per share) | ||
divided by the weighted average number of ordinary shares, adjusted for | |||
the dilutive impact, when applicable, of the assumed conversion of the | |||
2028 Bonds and employee share schemes outstanding. | |||
Capex (or gross capital expenditure) | IFRS | Acquisition of property, plant and equipment and intangible assets per | Direct from Cash flow statement (Net cash flows from investing activities) |
cash flow statement | |||
Cash | IFRS | Cash and cash equivalents and Current interest-bearing deposits | Direct from Balance sheet (Current assets) |
EBITDA before exceptional items | APM | Operating result before exceptional items, interest, taxation, depreciation, | Q1 2026 Interim Management Statement (alternative performance measures section, |
amortisation and impairment. | note d: Gross and Net debt to EBITDA before exceptional items) | ||
Free cash flow | APM | Net cash flows from operating activities, less the cash flows associated | FY 2025 Results Release (Reconciliation of alternative performance measures |
with the acquisition of property, plant and equipment and intangible | section, note d: Free cash flow) | ||
assets reported in net cash flows from investing activities from the Cash | |||
flow statement. | |||
Gross debt | IFRS | Total borrowings (current and non-current) | Direct from Balance sheet (Current liabilities, Non-current liabilities) |
Gross debt to EBITDA before exceptional | APM | Based on Gross debt (per above) and the rolling 12 month EBITDA before | Based on Gross debt (per above) and Q1 2026 Interim Management Statement |
items (or Gross leverage) | exceptional items | (alternative performance measure section, note d: Gross and Net debt to EBITDA | |
before exceptional items) | |||
Liquidity (or Total liquidity) | APM | Cash (per above) plus committed and undrawn general and overdraft | Q1 2026 Interim Management Statement (Reconciliation of alternative performance |
facilities, and aircraft-specific financing facilities | measures section, note f: Liquidity) | ||
Movements in working capital | IFRS | Net movements in working capital per cash flow statement | Direct from Cash flow statement (Net cash flows from operating activities) |
Net debt | IFRS | Gross debt (per above) less Cash (per above) | Q1 2026 Interim Management Statement (Reconciliation of alternative performance |
measures section, note d: Gross and Net debt to EBITDA before exceptional items) | |||
Net debt to EBITDA before exceptional | APM | Based on Net debt (per above) and the rolling 12 month EBITDA before | Q1 2026 Interim Management Statement (Reconciliation of alternative performance |
items (or Leverage) | exceptional items | measures section, note d: Gross and Net debt to EBITDA before exceptional items) | |
Operating profit (and other Income | APM | See Q1 2026 Interim Management Statement (alternative performance | Q1 2026 Interim Management Statement (alternative performance measures section, |
statement items) before exceptional items | measures section, note a: Profit after tax before exceptional items) | note a: Profit after tax before exceptional items) | |
Unit measures (PRASK, Fuel CASK, Non Fuel | APM | Passenger revenue, fuel costs, non-fuel costs (before exceptional items) | Glossary in the 2025 ARA |
CASK) | divided by capacity (ASKs) |
Alternative Performance Measures (APMs) and terminology definitions
Where the term ARA is used this refers to both the Annual report and accounts and the Annual Financial Report.
2026 Quarter One Results 18
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