British Airways has issued a fare price warning for holidaymakers and passengers planning trips in 2026. The airline, which competes with Easyjet, Jet2, TUI, Ryanair, and Wizz Air, says its prices will be hiked as it attempts to recoup most of a €2bn (£1.7bn) hit in fuel costs this year.
Fuel Costs Surge Amid Geopolitical Tensions
The International Airlines Group (IAG), BA's parent company, said its annual fuel bill is now expected to be about €9bn, up from a forecast of €7.1bn. BA also told passengers it was 70 per cent hedged for the summer, amid the ongoing Iran war. As the Strait of Hormuz remains blocked, BA expects to recover about 60 per cent of the €2bn additional fuel costs through revenue and cost management actions.
Impact on Fares and Profit
Recovering the €1.2bn would add an estimated 8 per cent to BA’s fares, based on its 2025 revenues. Luis Gallego, the chief executive of IAG, said: “Unfortunately, for example, BA that is a more premium brand, they are going to have a higher pass-through compared, for example, with Vueling.” Gallego noted that BA was actively managing the uncertainty created by the fuel price increase and its impact, taking necessary action on yields, costs, and capacity. He added: “The impact of the higher fuel price will inevitably lead to lower profit this year than we originally anticipated.”
BA's Resilience and Capacity Redeployment
BA’s chief executive, Sean Doyle, said his airline’s focus was to “fully, effectively redeploy capacity from markets where people aren’t travelling to, such as the Middle East, into markets where people want to travel to.” Doyle highlighted BA’s advantageous resilience amid the conflict in the Gulf, with the US and Israel assault on Iran and Lebanon continuing.
Global Supply Concerns
IAG warned: “If the current conflict continues to restrict flows of both crude oil and jet fuel from the Middle East, there is the potential for supplies of jet fuel to be restricted on a global basis.” Gallego also mentioned that Asia, which was a concern, is now building up reserves, so the group expects to fly everything scheduled for the summer.
