British Airways owner IAG posts soaring profits but warns on strike action

Marco Green
August 5, 2018

"There are a lot of people who have said we're foolish to have any interest because Norwegian is likely to fail".

"We will not be a longer-term shareholder in Norwegian unless we acquire it".

Willie Walsh, chief executive of the British Airways and Iberia owner, also told BBC radio that IAG remained interested in low-priced, long-haul carrier Norwegian Air after two failed approaches earlier this year. "The example we give is someone flying from Spain to Italy, they're not going to France, they shouldn't be impacted and the right to strike should be balanced against the fundamental right that people have in Europe, which is freedom of movement". I think it was the last contact that I had with them. There's some good news on this front, with costs falling at a faster rate than we've seen recently.

IAG continues to want to add new airlines to its portfolio and Walsh told BBC radio that IAG remained interested in Norwegian, the struggling low-priced carrier it had approached earlier this year. "The financial performance of the company is poor, and the balance sheet is very stressed".

French Air Traffic control strikes disrupted operations, particularly the company's Spanish carrier Vueling, which took a €20mln charge in the first half.

"We are committed to accelerating Level's growth and its fleet will increase to a total of seven A330-200 aircraft in Paris and Barcelona next year".

"These strikes are also having a significant negative impact on the Spanish economy and tourism", added Walsh.

In the six months to June 30, operating profit, before accounting for exceptional items, was up 17.4% to 1.12 billion euros (£1 billion).

The company's pre-tax profit of €1.9 billion (€1.7 billion) was skewed by a reduction in pension liability, amounting to a $785 million (€678 million) accounting gain.

Photo Credit: A British Airways aircraft. IAG has been rebuffed twice before, so it's unlikely to get Norwegian on the cheap.

Other reports by Click Lancashire

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