British Airways and Iberia owner IAG is cutting capacity and reviewing investments after a combination of a weak pound, airline strikes and terrorism hurt profits in the six months to June 30.
The group reported underlying profits of €555 million, up from €530 million a year ago slightly below forecasts.
Willie Walsh, IAG’s chief executive, said: “Numerous external factors affected our airlines including the impact of terrorism, uncertainty around the UK’s EU referendum and Spain’s political situation.
“We have reduced our planned capacity growth for the second half of the year, and have 2017 capacity growth and capex under review,” Walsh added.
He said the airlines’ operations have also been “considerably” disrupted by 22 air traffic control strikes in Europe.
IAG issued a profit warning immediately after the Brexit vote saying it no longer expects to match last year’s profit increase although added it didn’t expect the decision to have a long-term impact on profits.
Regarding the outlook for the rest of the year, IAG said it had "continued to experience a weaker trading environment in our UK point-of-sale business, which represents around one third of total revenue".
"On top of this, continued pound sterling weakness would reduce pound sterling profits when translated into Euros in what is traditionally the most profitable part of the year."
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