BA owner International Consolidated Airlines (IAG) reports dip in revenue and cites Brexit-related sterling weakening and strikes had €162m impact
International Consolidated Airlines Group (IAG) has reported a dip in profit during the third quarter of 2016, citing recent weakness in the pound and a slew of air traffic control strikes.
The figures
Operating profit in the three months to 30 September was down 3.6 per cent to €1.2bn (£1.1bn) from €1.25bn in the same period of last year.
Passenger revenue dropped 5.4 per cent to €5.8bn from €6.1bn in 2015, while total revenue reduced by four per cent to €6.5bn from €6.8bn.
However, the group – which owns British Airways, Iberia, Vueling and Aer Lingus – hiked its interim dividend payment by 10 per cent, to 11 cents per share.
The company's share price was up 6.4 per cent in afternoon trading.
Why it's interesting
In July the firm said the falling pound had had a negative effect of €148m – despite Walsh stating ahead of the EU referendum that a Brexit vote wouldn't have a "material impact" on the business.
At current fuel prices and exchange rates, IAG said it expects its operating profit for 2016 to be around €2.5bn, and has seen no significant change in its short-term trading conditions.
What IAG said
Chief executive Willie Walsh said: "While strong, these results were affected by a tough operating environment with a very significant negative currency impact of €162m, primarily due to sterling weakness, and continued disruption due to air traffic control strikes.
"Despite this, our unit revenue performance was better than in quarter two and our quarterly profit after tax was €970m before exceptional items, an improvement of 9.9 per cent on last year."
In short
Sterling woes aren't helping this multi-national airline group, but IAG seems positive it will get through this turbulent patch.