This report is an updated version of the report published on January 06, 2026, at 09:57 AM GMT

International Consolidated Airlines Group SA 

International Consolidated Airlines Group SA (LSE: IAG) is an FTSE 100 index-listed European aviation conglomerate that operates flights under the British Airways, Iberia, Aer Lingus, and Vueling banners. Over the past period, the company transported 264 million travelers to 185 destinations worldwide. Its primary airport hubs are situated in London Heathrow, London Gatwick, Madrid, Barcelona, and Dublin.

Key Recommendation Rationale – Sell at GBX 430.50

• Stagnant Revenue & Pricing Pressure: Total Q3 revenue was flat YoY, revealing a growth ceiling. Reported Passenger Revenue per ASK (PRASK) fell 2.4%, indicating an inability to monetize capacity growth amid intense competition, particularly in Europe and the North Atlantic.
• Core Network Yield Deterioration: Critical unit revenue metrics weakened significantly in primary markets. North Atlantic PRASK fell 7.1%, and Europe fell 6.0%. This suggests structural softness in core profit engines, with half the Atlantic decline attributed to underlying demand/pricing, not just FX.
• Underlying Cost Inflation Emerging: While Q3 non-fuel unit costs were stable (+0.2%), the nine-month figure rose 4.3%, exceeding capacity growth. Employee and Ownership unit costs increased 2.9% and 9.1% respectively in the quarter, challenging operational efficiency targets and margin resilience. 

Valuation Methodology: Price/ Earnings Approach

 Share Price Chart

Conclusion

The combination of stagnant revenue, deteriorating core yields, and emerging underlying cost inflation poses a significant challenge to IAG's margin resilience and casts doubt on the sustainability of its current earnings growth trajectory amid competitive pressures.

For conducting the valuation, the following peers have been considered: Air Astana AO (LSE: AIRA), Jet2 PLC (LSE: JET2), etc

Given its current trading levels, the recent strategic investments and partnerships, relative valuation, and associated risks, it is prudent to exit the stock at the current levels.

Hence, a ‘Sell’ recommendation is given on the stock at the Current Market Price of GBX 430.50 as of 06 January 2026 at 08:31 AM GMT. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 06 January 2026. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’