DAVY VIEW

IAG is trading well in Q1, but as expected it is likely to have a significantly higher fuel bill for FY2026. Based on the fuel curve as at May 5th 2026, including hedging positions and sustainability costs, fuel cost would be c.€9.0bn (€7.4bn previously). We expect consensus operating profit to settle in the €4.6bn range. IAG expects to recover around 60% of the higher fuel cost during this year through its revenue and cost management actions. This would leave the group in the mid-range of its 12-15% medium-term margin guidance.