IAG has warned of weaker travel demand and further reductions in flight schedules due to the coronavirus.
The airline group, which owns British Airways, Aer Lingus, Iberia and budget carriers Vueling and Level, said capacity on Italian routes during March “has been significantly reduced” and warned: “further capacity reductions will be activated over the coming days”.
IAG has already switched some capacity from China and South Korea, but in a statement detailing 2019 results, it added: “We also expect to make some capacity reductions across our wider short-haul network. Short-haul capacity is not being redeployed at this stage.”
IAG’s 2019 operating profit reached €3.3 billion, down by €200 million year on year. However, a “strong” fourth quarter saw operating profit rise €50 million to €765 million. Profit after tax for the year fell 1.4% to €2.39 million.
IAG chief executive Willie Walsh said: “These are good results in a year affected by disruption and higher fuel prices. We demonstrated our robust and flexible model once again through additional cost control and by reducing capacity growth to reflect market conditions.”
The group said the impact of current cancellations and redeployed aircraft will lower capacity for the current year by 2%.
“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.
The outlook contrasts with 2019, when IAG’s airlines grew capacity 4% and load factors reached a record 84.6%, up 1.3 points year on year. New routes were added at Aer Lingus, connecting Dublin with Minneapolis; with BA Airways adding Heathrow services to Charleston, Pittsburgh, Islamabad and Osaka. Iberia added a new service from Madrid to Guayaquil.
On the low-cost side, Vueling’s capacity grew through additional domestic frequencies, with expansion in the Balearic and Canary Islands, while Level opened a new base in Amsterdam.