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IAG Profits Knocked By Pilot Strikes

Published on Oct 31 2019 10:10 AM in General Industry tagged: Trending Posts / Aer Lingus / IAG / british airways / International Airlines Group

IAG Profits Knocked By Pilot Strikes

Aer Lingus and British Airways owner International Airlines Group (IAG) has said that it has taken a hit from industrial action by British Airways pilots, which knocked its profits in its third quarter.

The group said that the action by pilots at BA, together with other disruptions, resulted in a hit to its operating profit of €155 million in the three months to September 30.

British Airways pilots went on strike for 48 hours in September, grounding 1,700 flights in a dispute between pilot union BALPA and the airline over pay.

The pilot walkout was the first in the airline's history. No further strike dates have been scheduled, but the union has said it retains the right to announce more.

IAG has also faced disruption at airports. Strikes by ground staff at its Iberia airline, which also serve its Vueling brand, have disrupted flights in Barcelona.

CEO Willie Walsh said that threatened industrial action by Heathrow staff also had an impact, even though those August strikes did not go ahead.

Walsh said that disruption aside, IAG has posted good underlying results, but did not specify a timetable for the resolution of the BA dispute.

"We don't give a commentary on ongoing issues like that, so when we have something to report, we will update the market," Walsh said.

IAG posted third-quarter operating profit of €1.4 billion, in line with analyst consensus.

The group said that it expects its 2019 operating profit before exceptional items to be €215 million lower than 2018, reiterating a September profit warning.

Analysts at RBC said that the pilot dispute could overshadow holiday trading at Christmas.

"Until BA's dispute with its pilots is...settled, there is scope for further material disruption and subsequent profit downgrades [over] the key Christmas travel period," RBC said in a note, though it added that a "lack of new strike date announcements is encouraging".

Impact Of Protests

Air France-KLM has said demand for air travel is slowing, in part due to "a number of crises around the world" including disruption from protests.

Walsh played down the impact of protests on demand, but said that the state of the global economy was weak.

"We think the general macro economic environment has softened in 2019 relative to 2018, and that's the view we're taking on 2020," Walsh said, adding that all airlines flying to Hong Kong have been affected by the protests there.

He stated, "Other than that, there hasn't really been any noticeable change in trends and patterns that we'd previously seen."

News by Reuters, edited by Hospitality Ireland. Click subscribe to sign up for the Hospitality Ireland print edition.

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