Berenberg cuts target for IAG on expected hit to fuel prices and capacity from conflict

Fuel would be the most "tangible" headwind, they said, despite the carrier having hedged approximately 60% of its fuel bill for the financial year.

Furthermore, the conflict in Ukraine meant that capacity would only reach 83% of 2019 levels, instead of the 85% that the company had recently guided towards.

But there were also positives, with IAG more exposed to the US and less towards Asia than peers, meaning that its long-haul business was less vulnerable to the conflict than peers, as long as the war did not spread beyond Ukraine.

In a research note dated 14 March, Berenberg also called attention to management's assertion that an equity raise is not in the works at the moment.

Indeed, the carrier appeared to be "comfortable" in not pursuing a quick return to an investment grade balance sheet.

The analysts kept their recommendation on the shares at 'hold'.