British Airways’ parent company International Airlines Group (IAG) has revealed a 35% slump in profits because of soaring fuel costs.

The group reported pre-tax profits tumbling to 732 million euro (£627 million) in the three months to the end of June, from 1.1 billion euro (£940 million) a year earlier.

The company’s fuel costs and emissions charges rose by 23%, linked to the conflict in the Middle East.

Its revenue was stable at 8,883 million euro (£7,603 million).

IAG chief executive Luis Gallego insisted the group has “excellent fundamentals”, and its diverse portfolio of brands means it is well positioned to deal with “near-term headwinds”.

The company, which also owns the Iberia, Vueling and Level airlines, said it expects demand for travel across its network to “remain strong”.

About 57% of its seats have been booked for the second half of the year, with revenue from those bookings in line with last year.

It added that it expects its long-haul markets to “remain positive” and short-haul flights to be “competitive”.

IAG’s pre-tax profits for the six months to June 30 were down 21%, from 1.3 billion euro (£1.1 billion) to 1.0 billion euro (£850 million).

Its revenue over this period rose by 1% to 16.1 billion euro (£13.8 billion).

Some 57.9 million passengers flew on the company’s flights in the first half of the year, which was relatively flat compared with 2025.

Mr Gallego said: “With these results IAG has again demonstrated that its excellent fundamentals are supporting continued value creation for our shareholders, despite the impact of the crisis in the Middle East and wider geopolitical events.

“We are well-positioned to deal with these near-term headwinds with a diverse portfolio of world-class brands in large and attractive markets; industry-leading margins; significant free cash flow and a strong balance sheet; and attractive shareholder returns.

“Our long-term transformation programme has created the resilience that we are now benefiting from – products and services that our customers value, efficient and punctual operations and a low cost base.”

He added: “We remain confident in our business model and strategy that has made us one of the best-performing airline groups in the world.”