British Airways owner International Consolidated Airlines Group (LON:IAG) doesn't seem to be able to catch a break.
Self-inflicted injuries and Brexit uncertainty out the way, it was expected to provide a reasonably upbeat assessment of prospects on Wednesday alongside its trading update.
However, America's drone assassination of Iran's military leader Qassem Soleimani has put paid to that with oil prices soaring in its wake, hiking the cost of jet fuel.
READ: HSBC turns positive on Ryanair and IAG as UK election result provides “more clarity”[hhmc]
The FTSE 100-listed group was just enjoying some respite with upgrades to buy from hold by both HSBC and Citi Group last month.
But on Monday IAG and its peers Ryanair Holdings plc (LON:RYA), Wizz Air Holdings PLC (LON:WIZZ) and easyJet PLC (LON:EZJ) were down between 2% and 3%.
Fuel prices mean a lot
In the case of airlines, oil price is pivotal as fuel costs account for most of their operating expenses: from 36% for Ryanair to 25% for IAG.
According to Wahab, profit margins will be squeezed as the companies will be forced to purchase the fuel at a higher cost, having to boost ticket prices.Read More – Source
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