LONDON – British Airways-owner IAG claims that coronavirus would hit this year’s earnings, however, the rapidly evolving nature of the coronavirus outbreak means it cannot be ascertained by how much.
Coronavirus emerged late last year in China and has sent travel demand plunging of late as the outbreak has spread.
IAG also owns Iberia and Aer Lingus and it usually gives an earnings forecast around this time of year. The ongoing uncertainty around coronavirus impact meant it could not give correct profit guidance right now.
“It’s a rapidly changing situation,” Chief Executive Willie Walshsaid. “I wouldn’t call it unprecedented. We have seen other challenges for the industry.”
British Airways cancelled flights to and from Italy, Singapore and South Korea, and had suspended all China direct flights in January.
Low-cost airline EasyJet also warned of a “significant” softening of demand for its northern Italian bases, leading to the cancellation of flights and cutting costs.
IAG was cutting costs and implementing revenue initiatives for weathering the storm, following rivals like Germany’s Lufthansa and Amsterdam-based KLM that have cut costs recently.
At IAG, flight cancellations are because of falling travel demand which could constrain capacity growth this year, adding that it expected to cut more flights on its European network soon, in response to the coronavirus outbreak in Italy.
(Photos syndicated via Reuters)
This story has been edited by BH staff and is published from a syndicated field.