British Airways owner IAG has been hit by weak pound and air traffic control strikes in the third quarter, reporting a 3.5 percent drop in operating profit.
Revenue before exceptional items fell 4 percent to £5.2 billion, with operating profit falling to €1,205 million from €1,250 million in the same quarter last year.
Results showed a 13.7 percent decrease in passenger unit revenue for the quarter, down 5.9 per cent at constant currency.
IAG’s chief executive Willie Walsh commented:
“We’re reporting a strong quarter 3 operating profit before exceptional items of €1,205 million.
“While strong, these results were affected by a tough operating environment with a very significant negative currency impact of €162 million, primarily due to sterling weakness, and continued disruption due to air traffic control strikes.”
The company also said it had seen “weak trading conditions” in June – both before and after the Brexit vote – but have not seen any “immediate regulatory impact” in the aftermath of the EU referendum result.
However IAG was boosted by positive investor sentiment this morning, with shares soaring over 5 percent. IAG (LON:IAG) are currently trading up 5.63 percent at 436.80 (1243GMT).
FTSE recovers from earlier fall
The FTSE was set for its biggest weekly fall in six weeks this morning, after RBS shares sunk on the back of weak results and dragged other banking shares along with it.T he FTSE 100 had fallen 0.2 percent by 0930 GMT on Friday.
However the key index has since showed signs of recovery, sliding back into positive territory just after midday as IAG shares rise. It is now up 0.08 percent at 6,991.91.
Banks are still depressing the index, with HSBC and RBS down more than 1 percent as investors remain cautious after this week’s spate of banking results.