IAG in fares warning

A drop in operating profit for the third quarter of the year of nearly 4% was reported on Friday by British Airways’ parent company International Airlines Group (IAG). 

The group blamed a “tough operating environment” and a weak pound, with chief executive Willie Walsh saying BA ticket prices could increase as a result. Investors however had little reaction, since the results were in line with what had been forecast

IAG also cut its full-year profit target but observers said the forecast was less severe than anticipated. The company said it expected a €2.5bn operating profit before exceptional items, up 7% up on 2015, rather than the double-digit percentage rate forecast three months ago.

The operating profit for the July – September quarter was €1.2bn, a fall of 3.6%. IAG, 89% of whose earnings come from BA, forecast at the beginning of the year an underlying profits growth of about €945m, implying 2016 operating profits of nearly €3.3bn.

The group cut its forecast when it released its half-year results after the Brexit vote, a factor along with ATC strikes and terrorism also cited by other European carriers including EasyJet, Lufthansa and Ryanair which have also issued profit warnings. 

www.iairgroup.com

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franco mancassola, hunolulu

There was a time, in the not too distant past, when one of the most terrifying thoughts for an airline was to lose even a single passenger. They spared no effort to make sure that the passengers had the most comfortable and pleasant experience when they flew with them. After all, it is the passengers who pay their bills; the airline merely handles the money. Oh, how things have changed now! The airlines have discovered that the consumers are really a pushover and that their wallets can be pilfered with impunity, thus embarking in the application of some of the more absurd extra charges that I, in my long career, have ever seen. Aviation is going through prosperous times, fuel is at an all-time low and yet the new style of "nickel and dime" passengers continues. The new breed of managers fancy themselves as "acute business geniuses" but they may fail to understand that a different type of management is required in this new business era, one that realizes that responsibility begin, rather than end, when the passengers boards the aircraft. In business there is nothing more fatal than cunning management". But then, what do I know...

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