IAG warns on profits due to BA pilot strikes and higher competition

British Airways owner International Consolidated Airlines Group (LON:IAG) has warned that profits will be €215mln lower than expected due to competition for its other budget airline brands and strikes by pilots and airport workers.

The Anglo-Iberian carrier said €45mln of the profit impact is expected from the latest booking trends among low-cost airlines, where its Vueling and LEVEL brands operate.

Strikes by BA pilots, meanwhile, led to the cancellation of 2,325 flights in a week during September, while allowing customers to re-book flights or receive a refund all combined to produce an estimated financial impact of €137mln. 

On top of this, threatened strikes by workers at Heathrow Airport saw IAG bag a further hit of €33mln.

The FTSE 100 outfit said revenue per passenger is also likely to be “slightly down” compared to the previous indication that it would be flat, while there was no change in guidance for non-fuel costs to improve. 

Flight capacity is expected to grow only 4% for the year, compared to 5% previously as the fourth quarter is not expected to expand as much as had been predicted.

Story by ProactiveInvestors