Despite the uncertainties hovering around the exit of the United Kingdom from the European Union, an optimistic outlook for the year by the British Airways owner IAG. The company reported better than expected forecast for the first half of its key summer period along with forecasting growth in revenues and a lowering of growth in fuel cost. This pushed the shares of the company.
He “would like to hope” that British Airways could reach a deal with its pilots, said IAG Chief Executive Willie Walsh. The pilots of the airline last month overwhelmingly voted to support a strike as a protest against issues over pay. However the pilots have not yet served any notice for a strike.
“Despite fuel cost headwinds, we delivered a good performance,” Walsh said in a statement. He added that for the rest of 2019, there would be an improvement in unit revenue and non-fuel costs.
Following the announcement by the company, the shares of the company rose by 4.2 per cent and became the best performing stock of Europe’s STOXX 600 index.
There was a 1 per cent rise in its revenues, IAG said, and added that the growth in unit costs, including fuel, was reported at a better than expected rate of 6.3 per cent on a constant currency basis.
“Given all the uncertainties over global growth and Brexit, this looks to be a very strong statement by the company and implies that forward bookings are trending well,” Goodbody analyst Mark Simpson said in a note.
It was just days ago that British Airways rival Lufthansa reported a 25 per cent drop in its profits primarily because of an intense short-haul competition in Europe.
However, Walsh said that the British Airways was not very concerned about oversupply. “We think the supply environment is going to be OK, certainly in the fourth quarter and going into the first quarter of next year,” he told journalists in a conference call. There can be a tapering growth in the last three months of the year, he said. “The economic environment is clearly softening, but it is still reasonably good,” he added.
Walsh said that he had not yet seen any economic impact of the Britain’s plan to leave the European Union on October 31 even while admitting that he was worried about the economic fall out of the event.
(Adapted form AlJazeera.com)