British Airways owner IAG warns of coronavirus hit

Image copyright
AFP

British Airways owner IAG has warned that its profits in 2020 will be hit by the effects of coronavirus.

The airline group said flight suspensions to China and cancellations on Italian routes would affect how many passengers it would carry this year.

Due to uncertainty about the impact and duration of the current outbreak, it was not possible to say how much profits would be hit, it said.

Rival EasyJet has said it is cancelling some flights due to the virus.

The budget carrier said that, following the increased number of coronavirus cases in Northern Italy, it had seen “a significant softening of demand and load factors into and out of our Northern Italian bases”.

“As a result we will be making decisions to cancel some flights, particularly those into and out of Italy, while continuing to monitor the situation and adapting our flying programme to support demand.”

‘Significant’ fall

Shares in airlines have been among the hardest hit in the global market sell-off seen this week, and IAG’s shares have sunk 17%.

IAG chief executive Willie Walsh told the BBC’s Today programme: “I don’t think it’s a surprise that investors are cautious in the current circumstances.”

He said that IAG had a “very strong balance sheet” but that it is “natural in the current circumstances that people will be cautious”.

Mr Walsh said that in the first three weeks of February, bookings had been affected mainly in Asia.

“Clearly we had announced the suspension of flights to China. We took that decision at the end of January, and we had seen some impact on our other Asian routes, but it had looked like it was stabilising.

“But earlier this week we had the issues in Italy, and that’s clearly led to a significant fall-off in demand in Italy and in some of the surrounding countries as well.”

He added that general business travel had been affected by the cancellation of large conferences, and by the introduction of travel restrictions by some big companies.

Source link