What effect is Brexit having on International Consolidated Airlines Group PLC (LON:IAG)? That will be the question on investors’ lips on Friday, when the British Airways owner updates on first quarter-trading.
Consumer confidence is low at the minute, not just in the UK but in other countries as well, so it will be interesting to see if people are still prepared to fork out for holidays.
Businesses are also suffering a crisis of confidence, so that too could hit demand for lucrative business class airfares.
The sharp rise in oil prices over the past six months has raised concerns about fuel costs for airlines, which could put extra pressure on margins.
An update on guidance for the year will also be eyed. While the outlook given in February was better-than-feared, it was hardly scintillating, with bosses forecasting flat profits.
Macro issues still affecting Millennium & Copthorne
Once travellers arrive at their destination, they need somewhere to stay: step up hotelier Millennium & Copthorne Hotels PLC (LON:MLC), which is also due to update investors in the fourth and final session of this shortened week.
Revenue and profit slumped last year as global geopolitical uncertainties weighed on business confidence, while soaring costs hit the bottom line. The rise of Airbnb, a shortage of staff and a glut of new hotels has also dented hotels’ profits.
Those issues are obviously still front and centre, so the market will be keen to see what effect they continue to have and how bosses are dealing with them.
Investors will also be looking out for an opening date for MLC’s Mayfair hotel, which has been rebranded under Hilton’s new LXR luxury brand, as well as evidence that the New York hotels are being returned to profitability.
Significant events expected on Friday May 10:
Economic data: UK quarterly GDP estimate; UK trade data; UK construction output; US CPI