International Consolidated Airlines Group (LON:IAG) saw its quarterly results suffer a €155mln hit as the British Airways’ owner was impacted by strikes and “additional disruption” including threatened action by employees at Heathrow airport.
In the three months to 30 September, the FTSE 100-listed firm's profit before tax was down 9% year-on-year to €1.2bn, while passenger revenue was slightly down to €7.08 cents per available seat kilometres (ASK) and fuel cost was up 6% to €1.77 cents per ASK.
READ: British Airways owner IAG shares fly as more passengers check in
In the first nine months of the year, fuel prices were higher than in 2018, due to hedging profits in 2018 not repeated in 2019 and the strengthening of the US dollar.
The group - which also owns Iberia, Aer Ligus and Vueling airlines - said full-year underlying operating profit is expected to be €3.4bn, €215mln lower than 2018, with passenger revenue “slightly” down and improved non-fuel unit costs.
Willie Walsh, IAG's chief executive officer, said in the results statement: "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."
"Disappointingly, guidance for FY19 remains unchanged from the 26 September update despite sterling rallying significantly, which should boost operating profit due to the high sterling exposure for British Airways in particular," analysts at Peel Hunt said in a note.
"For FY20 the fuel price headwind should become a tailwind, supporting consensus operating profit growth of about 7%," they added.
Shares were slightly down to 517.2p on Thursday morning.
--Adds broker's comment, share price--