British Airways owner cuts profit forecast on pound slump

british-airwaysLONDON: British Airways’ owner lowered on Friday its annual earnings forecast for a second time since Britain voted for Brexit, blaming the latest downgrade mainly on a plunging pound.

International Airlines Group said it expected full-year operating profit of 2.5 billion euros, or 7.0 percent higher compared with 2015.

It had already cut an initial estimate at the end of July, saying it expected an increase above 10 percent.

Britain voted June 23 in favour of exiting the European Union, triggering a plunge in the pound to 31-year lows against the dollar and 7.5-year troughs versus the euro.

This has particularly hit IAG since its earnings are reported in euros.

IAG chief executive Willie Walsh on Friday said that the group’s third quarter was affected by “a very significant negative currency impact of 162 million euros, primarily due to sterling weakness, and continued disruption due to air traffic control strikes”.

Nevertheless IAG, owner also of Spanish carrier Iberia and Ireland’s Aer Lingus, posted a 10-percent rise in net profit for the three months to September 30 compared with one year earlier.