BA boss: Sunseekers will carry on flying

BRITISH Airways owner International Airlines Group has brushed off concerns about Brexit, saying: ‘People will continue to fly.’

Chief executive Willie Walsh was upbeat despite a summer of shocks, including terror attacks, strikes in France, an attempted coup in Turkey and a sharp drop in the pound.

The group, which also owns Spanish flag carrier Iberia, Ireland’s Aer Lingus and budget airline Vueling, reports its figures in euros so suffered a big currency loss due to the plunge in sterling. The firm said this, and other factors, had caused it to lower its forecasts for growth and review routes and investment.

Most of the pain will come from outside the UK, with the focus on Latin America.

On Brexit, Walsh said: ‘People will continue to fly. I’m not concerned. There will be a bit of turbulence in the short term but I think the British consumer will still look to travel and take their holidays in the sunshine. In the longer term I don’t see any change – we will still get business people and tourists. Once corporates have worked through the uncertainty and we get out the other side, things will return to a normal trading environment.’

IAG is seen as a bellwether for the economy because travel is often cut when businesses and consumers feel under financial pressure.

The comments from Walsh came after drugs giants GlaxoSmithKline and AstraZeneca pledged hundreds of millions of pounds for their British operations in a vote of confidence in the UK following the Brexit vote.

Shares in IAG dipped 0.8pc, or 3.30p, to 406p despite a £125m hit from currency conversions. IAG gets a third of its revenues from Britain and said this would also hit third-quarter results, usually the most profitable time of the year due to the summer holidays.

Profit rose to £688m for the six months to June 30, up from £412m on sales of £8bn.

IAG has now cut capacity growth to 4.5pc this year, down from the 4.9pc rise planned in April. And it has placed its capital expenditure across the group under review. The firm expects 2016 underlying operating profit to rise by a ‘low double-digit’ percentage.

Nicholas Hyett, an analyst at broker Hargreaves Lansdown, said: ‘The group has played down the impact of Brexit.

‘Despite terrorist attacks and strikes, IAG seems to be dealing well with the challenging backdrop and a rise in capacity across the sector.’