IAG share price: British Airways parent flags Brexit tourism boost
British Airways parent International Consolidated Airlines (LON:IAG) has flagged a surge n inbound tourism spurred by a weakening of the pound after the UK voted to leave the European Union in last week’s referendum, Bloomberg has reported. The comments came after the company, which also owns Aer Lingus, Iberia and Spanish low-cost carrier Vueling, cautioned last week that the Brexit vote would weigh on its profit growth this year.
IAG’s share price has fallen deep into the red in today’s session, having shed 2.55 percent to 348.10p as of 10:39 BST, and underperforming the blue-chip FTSE 100 index which currently stands 2.15 percent higher at 6,272.30 points. The group’s shares have lost just under 30 percent of their value over the past year, and are nearly 43 percent worse off in the year-to-date.
IAG’s chief executive Willie Walsh said in an interview with Bloomberg Television yesterday that the UK would now become more attractive for tourists. He further noted that the company did not plan to eliminate jobs or move assets away from the UK in the wake of the Brexit vote, and that there would be no significant capacity cuts or fare discounting.
Walsh pointed out that the turmoil created in the airline industry by the UK vote might even present the British Airways parent with takeover opportunities, while declining to specify which companies he had in mind.
His comments came after IAG warned on Friday that it had experienced a weaker than expected trading environment in the run-up to the EU referendum, and that in the face of current market volatility, it no longer expected to generate an absolute operating profit increase similar to last year.
“We still will make record profits in 2016,” Walsh told Bloomberg yesterday, adding that the demand environment continued to be ‘healthy’. The Irishman, who as a UK resident was entitled to vote in the referendum, noted that he had backed the ‘Remain’ camp and that the ‘Leave’ victory meant that “a vision of the UK trading without boundaries will now be difficult to deliver”. He, however, added that democracy had been served.
“We’ve got to respect the decision and move on,” Walsh pointed out.
As of 11:01 BST, Wednesday, 29 June, International Consolidated Airlines Grp share price is 348.55p.