British Airways owner International Consolidated Airlines Group SA (LSE:IAG) is set to benefit from a tightly constrained long-haul capacity environment this summer, according to fresh analysis of airline schedules by RBC Capital Markets.
There has been limited growth on Europe’s most important intercontinental routes, according to travel data provider OAG.
Capacity on the North Atlantic is rising by less than 3%, while growth to Africa is similarly subdued. The South Atlantic looks broadly balanced and expansion to Asia and the Middle East is moderating.
By contrast, short-haul intra-European capacity appears more stretched, particularly on routes from central and eastern Europe and UK leisure destinations.
RBC says this supply backdrop is supportive for Europe’s legacy carriers IAG, Air France-KLM and Lufthansa, where disciplined capacity underpins pricing.
Among them, IAG is most preferred, citing its growing exposure to long-haul markets and the Atlantic in particular.
That matters in a summer where demand remains sensitive to macro and geopolitical risks.
"Positively for BA, scheduled capacity between London and North America remains constrained this summer, and still declining (as in this winter)," RBC noted, with IAG and Alaska Airlines seen as "driving almost all of the incremental capacity", while many operators are cutting seats, led by American Airlines and Norse Atlantic.
Capacity growth also varies by country. France, Germany and the Netherlands remain constrained, while Spain and Italy are expanding more aggressively.
IAG’s main hubs, such as Heathrow for BA and Madrid's Barajas for Iberia, face less incremental competition than some continental peers, which could help protect yields during the peak season.
RBC cautions that demand uncertainty persists on some routes, including Europe to the US. Even so, with volume growth scarce, pricing power is likely to do the heavy lifting. On that front, IAG looks comparatively well positioned going into the 2026 financial year.
Among European low-cost carriers, RBC highlighted some "attractions" in the outlook, including fuel and currency tailwinds, as well as some encouraging trends in website activity and macro indicators.
However, analysts believe the summer capacity backdrop "slightly tempers this outlook", with data suggestive of "over-declaring of capacity by some airlines".
Central and eastern routes "look more incrementally oversupplied", implying pricing risks for Wizz Air Holdings PLC (AIM:WIZZ)).
"After moderating in winter 25/26, capacity growth on some UK beach routes is set to pick up again this summer."
This is a risk for Jet2 PLC (AIM:JET2) primarily and also easyJet PLC (LSE:EZJ), the analysts added.