Transatlantic troubles wipe £2bn off IAG's value
The owner of British Airways saw nearly £2billion scrubbed off its market value after warning of a transatlantic travel slowdown.
Shares in International Airlines Group (IAG) slumped 11.6 per cent, or 47.9p, to 366.2p yesterday after reporting lower demand for economy-class seats over the popular summer months.
The update confirmed investors' fears that interest in travelling to and from the US has weakened since President Donald Trump took office in January.
'The North Atlantic market saw some softness in US point-of-sale economy leisure,' a spokesman for the international airline operator said.
Turbulence: The owner of British Airways saw nearly £2billion scrubbed off its market value
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The group also said fares were down in Europe due to 'more competitive markets elsewhere'.
IAG, which also owns Iberia and Aer Lingus, started yesterday with a market cap of around £19billion and closed worth just below £17billion.
Sales for the three months to September 30 were flat at £9.3billion, compared to the same period last year, while profits fell 2.1 per cent to £1.65billion.
Analysts blamed factors including a weak dollar and nervousness in the US economy for dampening tourist spending power.
Chris Beauchamp, at broker IG, said there are 'perceptions that travelling to the US has become harder' due to strict immigration controls at US airports.
Even so, North Atlantic journeys made up nearly a third of sales over the quarter at IAG.
Airports across the US will be hit by a wave of cancellations this weekend amid a government shutdown to ease traffic.
But IAG boss Luis Gallego said there have been signs of a 'recovery' with 'improving trends in October and November'.
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