Aer Lingus owner IAG trimmed its 2026 capacity outlook to flat on Friday, after reporting a 16% drop in second-quarter profit hit by soaring fuel costs and weaker travel demand linked to the Middle East conflict. The capacity downgrade was offset by quarterly profit coming in just ahead of analyst expectations and a slightly lower fuel bill forecast. European airlines have struggled with spiralling fuel costs since the war began at the end of February. With little sign of an end to the war, many airlines are re-evaluating their hedging strategies and tightening cost controls, with many cutting capacity. IAG, which also owns British Airways and Iberia, said its fuel costs for the year would be between €8.3 billion and €8.6 billion, slightly lower than the roughly €9 billion forecast in May.