The owner of British Airways yesterday shocked the City by warning that it will only break even this year, as it suffers from Spain's economic strife, soaring fuel costs and strikes.
International Consolidated Airlines Group, which owns BA and Iberia, also warned that its performance will be hit by €240m (£192m) of operating losses at bmi, bought from Lufthansa in March.
In the first three months of this year, IAG saw its operating loss more than double to €249m. Much of that was due to fuel, expected to cost €1bn more this year than last.
Recession in Spain pushed Iberia's operating loss for the three months up 70 per cent to €170m, including the €25m cost of pilot strikes.
BA's operating loss – mainly due to fuel – was £62m.
The aviation expert James Hollins at Investec described the breakeven forecast as "optimistic".
The shares rose 2.4p to 165.4p.
* BAA yesterday blamed a 2.5 per cent decline in cargo movement in April on the "the global economic climate". However, passenger numbers at Heathrow were up at 5.8 million.