IAG disappointed with its second quarter finance report

The IAG’s stocks declined on Friday after failed to meet market expectations for its quarterly profit and announced a lower-than-expected performance of its transatlantic unit compared to its competitors. Although the IAG, which is owner of British Airways and some other airlines, kept its profit-growth guidelines for the full 2018, its shares fell by 3.9% to 657 pence – the biggest fall within the British FTSE index.

IAG reported a second-quarter operating profit of 835 million EUR, which is 6% more than in the same period last year, but slightly below the consensus estimate of 848 million EUR.

The results are due to negative currency movements and the impact of 20 million EUR in Vueling, related with the interruptions because of the strikes of air control in France. Although IAG retained its outlook, earlier this week, its large European rivals Air France-KLM and Lufthansa increased their revenues for 2018 supported by the booming North American routes.

IAG also maintained its annual forecast of passenger revenue growth at constant exchange rates. While this revenue increased by 2.3% in the quarter as a whole, the share of North America declined by 0.9%.

However, IAG Chief Executive Officer Willie Walsh said he was pleased with the presentation and identified the transatlantic results as “very good”.

“The fact that we reported an improvement in profitability in the first half of the year and that we say we will improve it throughout the year distinguishes us from many other airlines”, added he.

IAG continues to add new airlines to its portfolio, and Willie Walsh told that it retains interest in the low-cost carrier Norwegian Air.