IAG said that it was experiencing weaker demand in Europe, as well as Asia as a result of coronavirus, and it also highlighted a general softening of demand for business travel across its entire network due to the outbreak.
The comments came as IAG reported its 2019 results, and while both British Airways and Iberia announced suspensions to mainland China in late January the holding company pointed to a broader impact on demand for flights across its network.
It pointed to the number of cancellations of industry events and corporate travel in general as a driver for a widespread reduction in business travel.
“The earnings outlook is adversely affected by weaker demand as a result of coronavirus. We are currently experiencing demand weakness on Asian and European routes and a weakening of business travel across our network resulting from the cancellation of industry events and corporate travel restrictions,” the group said in its results statement.
IAG said the net impact of current flight cancellations and redeployed capacity is to lower the group’s 2020 planned capacity by approximately 1 per cent in terms of available seat kilometres to 2 per cent for the year.
“Our operating companies will continue to take mitigating actions to better match supply to demand in line with the evolving situation. Cost and revenue initiatives are being implemented across the business,” it said.
However, due to the level of ongoing uncertainty IAG said it was currently unable to give accurate profit guidance for FY 2020 at this stage.
IAG reports weakening demand in Europe due to coronavirus
