Transatlantic Turbulence: IAG's Struggle Amid U.S. Economic Weakness

IAG reports a decline in its shares following a flagging U.S. economy, despite increased third-quarter bookings. Concerns loom over transatlantic travel, with a notable drop in the North Atlantic market. CEO Luis Gallego remains optimistic, despite challenges posed by policy changes and economic conditions.

British Airways owner IAG signaled potential difficulties in the U.S. economy market on Friday, causing its shares to plummet by nearly 10%, despite reporting a third-quarter operating profit that met expectations alongside a rise in bookings.

The decline underscores ongoing concerns about a slowdown in the profitable transatlantic market, exacerbated by reduced travel from Europe to the U.S. following policy changes under President Donald Trump, perceived by some as anti-trade and anti-foreigner.

Despite these challenges, IAG reported a profit of 2.05 billion euros for the quarter ending September 30, aligning with forecasts, while maintaining a cautiously optimistic outlook for transatlantic travel into 2026, amid changes in economic conditions and market expectations.