logo-loader
viewInternational Consolidated Airlines Group

British Airways owner IAG drops guidance because of coronavirus uncertainty

The group is not providing profit guidance yet, while it rejigged some of the freed-up capacity following cancellations

International Consolidated Airlines Group -

International Consolidated Airlines Group (LON:IAG) tanked as it said it is too early to forecast 2020 profits because of coronavirus disruption.

The British Airways owner said cancelling and rescheduling flights has so far hit planned seat capacity by kilometres by 1-2%.

READ: British Airways owner IAG adds to its woes as Heathrow’s third runway ruled unlawful

Demand is dropping as industry events and corporate trips are cancelled, but the airline said it is “strongly positioned for the expected recovery in demand”.

“IAG is resilient with a strong balance sheet and substantial cash liquidity to withstand the current weakness,” the firm said.

The FTSE 100-listed group had to suspend all flights to mainland China as well as reducing routes to Hong Kong, Seoul and Italy.

While the short-haul capacity has not been redeployed, some of the freed-up long-haul capacity has been salvaged by adding flights to India, South Africa and the US.

No guidance is problematic

Neil Wilson from Markets.com said the lack of guidance is "a real concern" and corporate travel could face a US$560bn hit from the virus.

"We can already see non-essential business travel being hit as companies take action to protect employees - families will start to do the same if we a broad spread across Europe," he commented.

"You could see a complete wipeout to the European summer season if the situation deteriorates in Italy and we for instance see a similar surge in cases across France."

Revenue up but profits dip in 2019

In the year to 31 December, revenue rose 5% to €22.4bn, while available seats per kilometre were up 4% to 337,750.

Underlying profit before tax dipped 1% to €2.9bn after costs of €170mln following strikes at British Airways and disruption at its IT systems during the summer.

Full-year dividend was lifted 2% to €0.315 per share.

Shares tanked 8% to 474.18p on Friday morning.

--Adds analyst's comment, shares--

Quick facts: International Consolidated Airlines Group

Price: 215.1 GBX

LSE:IAG
Market: LSE
Market Cap: £4.27 billion
Follow

Add related topics to MyProactive

Create your account: sign up and get ahead on news and events

NO INVESTMENT ADVICE

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is...

FOR OUR FULL DISCLAIMER CLICK HERE

Watch

Enthusiasm of Belvoir Group franchisees during crisis has been incredible...

Dorian Gonsalves, chief executive of Belvoir Group PLC, says the company’s franchisees will be ready to go straight out and start letting again as soon as the lockdown is lifted. Belvoir is actively transacting business on all sides except estate agency, where transactions have all but...

13 hours, 59 minutes ago

2 min read