Coronavirus: British Airways owner hit by uncertainty amid global outbreak

IAG made healthy profits during 2019, but is cutting capacity this year

Uncertain future: the firm says the outlook is impossible to predict (British Airways)

British Airways’ parent company, IAG, has said it is impossible to give accurate profit guidance for 2020 “given the ongoing uncertainty on the potential impact and duration of Covid-19”.

BA has suspended all its flights to Beijing and Shanghai, and scaled back its operations to Hong Kong, Seoul and Singapore due to a slump in demand.

The aircraft and crew intended for these services are being redeployed to other parts of the world where demand is regarded as healthy, notably the US and India.

Many flights to northern Italy are also being cut, but British Airways says aircraft and crew are not being redeployed.

The Anglo-Spanish conglomerate also includes Aer Lingus and two Spanish airlines, Iberia and Vueling.

IAG reported solid underlying full-year profits for 2019, with revenue up 5 per cent in what the chief executive, Willie Walsh, called “a year affected by disruption and higher fuel prices”.

Operating profit before exceptional items was €3.285bn (£2.8bn) – down about 5 per cent on the previous year.

A strike by British Airways pilots in September 2019 cost the company more than €200m.

Mr Walsh said: “These are good results. We demonstrated our robust and flexible model once again through additional cost control and by reducing capacity growth to reflect market conditions.”

IAG’s announcement said its was taking “mitigating actions to better match supply to demand in line with the evolving situation”.

The firm said: “Cost and revenue initiatives are being implemented across the business.

“IAG is resilient with a strong balance sheet and substantial cash liquidity to withstand the current weakness.”

The group is planning a 2 per cent capacity reduction in 2020.

Mr Walsh is standing down as chief executive at IAG. On 26 March he will be replaced by Luis Gallego, who is currently running Iberia.