Pilot strikes hits British Airways owner IAG’s profits
Pilot strikes and fuel costs have dented third quarter profit for British Airways’ owner in line with its September profit warning.
International Airlines Group (IAG) posted a third quarter operating profit of €1.42bn (£1.22bn), representing a 7.7 per cent decline from the corresponding period last year.
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IAG said the figures were affected by British Airline Pilots’ Association (BALPA) strike action, which resulted in 2,325 flights being cancelled.
This led to a 1.5 per cent fall in passenger unit revenue.
Fuel costs for the quarter were up by 6.1 per cent, also contributing to shrinking profits.
The trading update said it expected IAG profit for 2019 to fall by €215m (£185m).
The results come after IAG issued a profit warning in September.
IAG chief executive Willie Walsh said: “These are good underlying results.
“As we said in September, our performance has been affected by industrial action by pilots’ union BALPA and other disruption including threatened strikes by Heathrow airport employees.”
BA pilots went on strike on 9 and 10 September, but cancelled planned industrial action on 27 September, in a battle for higher wages.
BA offered pilots an 11.5 per cent pay rise over three years that was accepted by other unions representing BA staff, however BALPA asked for more for its pilots.
The dispute is ongoing, however Walsh told the Financial Times he expected it would be resolved soon.
“I know the team at British Airways are very much focused and engaged on resolving the issue,” he said.
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“I am very confident that we will see a resolution in the very near future.”
Shares in IAG finished up 2.19 per cent to 531.20p in today’s trading.