Sep 26, 2019
British Airways parent IAG warns of hit to profits from strikes
British Airways parent IAG has warned that its full-year profits will be 6 per cent lower than last year after pilot strikes earlier this month wreaked havoc and became one of the most serious industrial disputes in its history. IAG said on Thursday operating profits would be €215m lower than 2018, when it generated €3.49bn, mainly as a result of the disruption, which saw pilots walk out for 48 hours on September 9 and 10. The total financial impact of the strikes would be around €137m, IAG said. Further disruption including strike threats at Heathrow airport was set to cause a further €33m hit, while adverse booking trends at its low-cost airlines are expected to cost it a further €45m. IAG expects capacity growth to be lower than expected in the final quarter of the year, mainly as a result of a drop-off in bookings at its low-cost airlines Vueling, which has been affected by ground handling strikes at Barcelona airport, and Level, which has been knocked by currency turmoil in Argentina. Capacity growth in 2020 will also be lower than had been previously expected, IAG said, as the industry struggles with overcapacity.
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