Lufthansa warning hits shares at IAG
SHARES in British Airways parent IAG fell 2.9 per cent yesterday after rival Lufthansa issued a profit warning.
Germany’s Lufthansa, which is looking to sell its British-based BMI airline, said a weaker than expected August had dented operating profits, which are no longer expected to beat last year’s figure of €876m (£762m).
The firm also expects passenger bookings to be weaker than forecast, a downgrade it blames on economic uncertainties.
Lufthansa has followed in the footsteps of several airlines that have trimmed or missed forecasts this year.
IAG, formed out of the merger between BA and Iberia last year, is seen as one of the frontrunners if Lufthansa goes ahead with the sell off the loss-making BMI.
Lufthansa appointed Morgan Stanley earlier this month to kick off a review of the business.
IAG chief executive Willie Walsh said earlier this year that he was looking at 12 possible takeover candidates as the new firm looks to expand.
The gloomy outlook for airlines was compounded yesterday when industry body IATA forecast a 29 per cent fall in 2012 industry-wide profit on the back of a weak global economy and stubbornly high jet fuel prices.
IATA said that while 2011 profits have been upgraded to $6.9bn, margins will fall to a “paltry” 0.8 per cent in 2012.