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British Airways owner IAG issues profit warning after Brexit vote

Published 24/06/2016

British Airways owner IAG has issued a profit warning
British Airways owner IAG has issued a profit warning

British Airways owner IAG has issued a profit warning following the UK's decision to leave the EU.

The company's share price tanked 19% to 425.6p in trading on Friday morning.

It issued a statement which read: ''Following the outcome of the referendum, and given current market volatility, while IAG continues to expect a significant increase in operating profit this year, it no longer expects to generate an absolute operating profit increase similar to 2015.''

The firm insisted it believes the vote "will not have a long-term material impact on its business", but added that it experienced "a weaker than expected trading environment" in the run-up to the referendum.

EasyJet announced that it was "working on a number of options to allow it to continue flying in all of its markets".

It insisted that the Brexit vote "will not have a material impact" on its strategy or ability to deliver "long-term sustainable earnings growth and returns to shareholders".

Pro-Remain campaigner Carolyn McCall, chief executive of easyJet, said: "We remain confident in the strength of easyJet's business model and our ability to continue to deliver our successful strategy and our leading returns.

"We have today written to the UK Government and the European Commission to ask them to prioritise the UK remaining part of the single EU aviation market, given its importance to trade and consumers."

Several non-EU member countries are part of the European Common Aviation Area in return for compliance with safety rules and economic co-operation.

Tim Alderslade, chief executive of t he British Air Transport Association, which represents UK-registered airlines , said: "The Government must now urgently confirm that the UK will seek to remain a member of the European single aviation market once we leave the EU.

"We also call on the Government to prioritise all aviation-related negotiations, agreements and decisions during the EU withdrawal process.

"Given our status as an island trading nation, and with excellent international air links and travel now being even more vital for our future prosperity and economic growth, the environment for aviation post-Brexit must be clarified as soon as possible."

Ryanair, which supported the Remain campaign, launched a sale to mark the referendum.

Robin Kiely, a spokesman for the Dublin-based carrier, said: " It's a good job we're better at running an airline than political campaigns.

"Britons are booking our £9.99 seats in record numbers in what will be the last big seat sale of its kind, as they look to flee a country which will be run by Boris, Gove and Farage."

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