International Airlines Group is prepared to alter capacity in the face of any “sustained downturn” in economic conditions.
The British Airways and Iberia parent company said October demand in economy cabins was weaker than last year, particularly in Spain, while forward bookings for premium cabins are “broadly in line” with levels seen at this time last year.
The forecast came as IAG reported a significantly improved pre-tax profit for the nine months to September, reaching €355 million after exceptional items against €63 million for the same period last year, when BA suffered from cabin crew strikes.
As a result the group said it expected to deliver full-year operating profits double last year’s level.
“Given the disruption and non-recurring accounting items in Q4 2010, we are confident of a higher level of profitability in Q4 this year, even after the negative impact of the high fuel price,” IAG said.
Fuel costs for the nine months were up by 28.5% to €3.75 billion, before exceptional items.
Chief executive Willie Walsh, announcing fourth quarter and nine month results, used the opportunity to further attack the government over Air Passenger Duty.
He also issued a warning on the impact of soaring fuel costs which continue to have a “significant impact” on the business.
“The competitiveness of the UK economy and the aviation industry has been damaged by Air Passenger Duty with UK airlines facing the highest tax levels in the world.
“Unless the British chancellor reverses this, even more passengers and businesses will avoid the UK and further undermine the economy.
“The main challenge for 2012 will be to offset increased fuel costs, as our hedges unwind, against a background of potentially weaker demand.”