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Brussels attacks slow IAG growth plans

Do Not UseDo Not Use 29/04/2016
BA plane © Getty Images BA plane

Airline group IAG, the owner of British Airways and Iberia, has said it will temporarily slow plans to fly more routes following the Brussels attacks.

It also said there was weaker demand from high-margin business-travellers.

IAG reported pre-tax profits of €124m (£96m) for the first quarter, compared with a loss of €37m in 2015.

"March revenue was affected by the timing of Easter and the Brussels terrorist attacks," said IAG chief executive Willie Walsh.

"Revenue trends in quarter two have been affected by the aftermath of the Brussels terrorist attacks, as well as some softness in underlying premium demand. As a result, IAG has moderated its short-term capacity growth plans."

Shares fell 4.8% in afternoon trading in London to 524.7p, making it the biggest faller on the FTSE 100.

Operating profits at IAG - which also owns Aer Lingus and Vueling - were €155m before exceptional items, compared with €25m in 2015.

IAG said it expected fuel costs to fall by about 1% this year due to weak oil prices.

Profits were boosted by the purchase of Irish flag carrier Aer Lingus which was completed last September.

IAG has fared better than some of its European rivals - Lufthansa and Air France-KLM - which have been hit by strikes over cost-cutting plans, as well as increased competition from Middle Eastern and budget airlines.

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