British Airways-parent cuts profit forecast on strikes

London, Sept 26 (AFP/APP):IAG, the owner of British Airways, said Thursday it was cutting annual profits guidance after taking a hit of 137 million euros from BA pilots carrying out historic strikes.

IAG “expects its 2019 operating profit before exceptional items to be 215 million euros ($236 million) lower than 2018”, the group said, noting that it was taking hits also from threatened strike action elsewhere and lower bookings going forward.

BA grounded its entire UK fleet over two days this month when for the first time in its 100-year history pilots employed by the airline went on strike in a long-running dispute over pay.

Even though pilots represented by the BALPA union have cancelled a third 24-hour stoppage, BA has said it has been able to revert to only a half-service on Friday having initially cancelled all UK flights scheduled for tomorrow.

And despite the strike being scrapped, “there have been no further talks between British Airways and BALPA”, IAG said Thursday.

“The airline’s offer of a 11.5-percent pay increase over three years still stands and has been accepted by British Airways’ other unions, representing 90 percent of the airline’s employees.

“Clearly any further industrial action will additionally impact IAG’s… 2019 operating profit,” the airlines group added.

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In total, the disruption will have caused the cancellation of 2,325 BA flights, IAG said Thursday.

“The net financial impact of the industrial action is estimated to be 137 million euros,” it said.

“In addition, there were further disruption events affecting British Airways in the (third) quarter, including threatened strikes by Heathrow Airport employees, which had a further net financial impact of 33 million euros.”

IAG said also that it was taking a hit of 45 million euros from lower bookings, in particular for its budget carriers Vueling and LEVEL.

Shares in IAG slid 2.6 percent to 467.70 pence in reaction to the update, while London’s benchmark FTSE 100 index was up 1.2 percent overall approaching midday.

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