British Airways owner IAG has reported a 16% drop in second-quarter profit, weighed down by soaring fuel costs and weak travel demand linked to the Middle East conflict, and said it now expects capacity to be flat this year.
IAG, which also owns Iberia and Aer Lingus, said its fuel costs for the year would range between €8.3 billion and €8.6 billion, slightly lower than the roughly €9 billion forecast in May.
The carrier posted an operating profit of €1.41 billion for the quarter, lower than the €1.68 billion reported a year earlier, but slightly ahead of the €1.37 billion forecast by analysts in a company-compiled poll.
The quarterly results reinforce the pressure and uncertainty highlighted by fellow carriers Ryanair and EeasyJet this month, as a prolonged and escalating war raises costs and weakens travel demand.