Third major airline warns fares will rise next year

The owner of British Airways has warned fares will rise next year.

International Airlines Group (IAG) is the latest operator to caution travellers that it will pass on soaring fuel costs, following similar announcements from Lufthansa and Ryanair.

Pricing is particularly high between Europe and the North Atlantic, according to IAG chief executive Luis Gallego.

IAG projected its fuel bill this year will be between €300m and €600m higher than previously anticipated, and will only rise from there.

Hedging has somewhat insulated airlines from spiralling jet fuel prices this year – a practice whereby an operator buys in advance for a fixed price.

IAG finance chief Jose Barrionuevo said the company hedged around 71% in 2026, but currently only 45% for 2027 – and at higher prices even then, the Financial Times reports.

Barrionuevo said: “The gross fuel bill is going to be higher than this year, as you can imagine… but we are confident that with the level of pass-through we’ve been achieving, we should be able to mitigate a big portion of that.”