Face of Nation : British Airways (BA) has issued a profit warning after it was hit by an unprecedented pilot strike and a threatened walkout by Heathrow airport workers. International Airlines Group (IAG), the airline’s owner, said the two industrial disputes had cost it £150m and would lower its pre-tax profits by £190m in 2019, compared to last year.
Shares in IAG tumbled 3.9% on the announcement on Thursday morning, making it one of the biggest fallers on FTSE index of Britain’s top companies.
The company (IAG.L) was forced to cancel more than 4,500 flights after many of its pilots walked out in a row over pay earlier this month. Ground staff employed by Heathrow Airport also threatened action too in September and caused further disruption, but it was called off after an improved pay offer.
More than 2,000 flights were subsequently reinstated as another planned pilot strike on 27 September was called off, but the dispute has proved an enormous headache for the company.
British Airline Pilots Association (Balpa) has threatened further strikes if BA do not engage in “meaningful” talks over their demands for a larger share of the group’s profits for pilots. BA said the pilots’ actions had cost the company £121m, and the threatened strikes at the airport had cost £29.2m.
IAG said in an update to its full-year guidance on Thursday ‘passenger unit revenue,’ an important industry measure, would fall rather than be steady as expected. It added that its offer of an 11.5% pay rise over three years “still stands,” and had been accepted by other unions at BA.
IAG chief executive Willie Walsh also told analysts on a call the collapse of Thomas Cook meant there was an “opportunity” to buy some of its slots at Gatwick airport. He said his company would “be looking at” any slots available in future.
