Terror attacks hit flight demand

Despite this International Airlines Group (IAG) said operating profit jumped more than five times to £121m in the first three months of 2016, boosted by the purchase of Irish flag carrier Aer Lingus last September.

March sales were hit by the Brussels nail bombings on March 22, which killed 32 victims. This followed the attacks in Paris last November which killed 130 people. Many tourists have decided not to fly to major European cities in fear that there will be another attack.

IAG said it would trim its growth plans this year to adjust for weaker demand, which has also been hit by worries that the UK could vote to leave the EU.

IAG’s chief executive Willie Walsh said the group will cut its 2016 capacity growth to 4.9 per cent from a previously planned 5.2 per cent.

The group said the Brussels attacks, which included a bombing in the departure hall of Zaventem airport, had curbed travel appetite over the last six weeks.

Mr Walsh said the nail bombings have had a “more pronounced” and “more extended” impact on travel demand than past shocks given how soon they had come after the Paris attacks in November.

However he said that demand is picking up.

“The trends going into the third quarter, however, appear to be back to normal,” he said, adding that he expects the third quarter will be strong.

IAG’s shares closed down 5 per cent at 525p. Some analysts have blamed risks associated with Britain’s vote on EU membership on June 23.

“The shares remain under the pall of the UK’s EU referendum and for many investors we find this binary outlook to be a deterrent to new investment,” said RBC analyst Damian Brewer.

IAG was also hit by weaker demand from high-margin business travellers, in particular flying related to the slowdown-hit oil industry and Brazil, and as British corporates take a pause due to Brexit uncertainty.

One bright spot was BA’s flights between Leeds Bradford Airport and Heathrow.

Simon Lea, British Airways’ airport manager Leeds Bradford, said: “The improved timings of the last flights of the day have opened up much needed connection opportunities for the people of Yorkshire, particularly to some of the business and leisure destinations that are so important to this region.”

The last southbound departure of the day has been brought forward by 75 minutes to 7.40pm. The earlier arrival time has allowed customers to connect with evening flights to Abuja, Buenos Aires, Jeddah, Kuwait, Sao Paulo and Tel Aviv.

In addition, customers travelling from Leeds Bradford Airport will have the option of connecting with the later flights of the day to Dubai and Hong Kong.

The last northbound service is also earlier, now departing Heathrow at 5.50pm, which means improved connection times for customers flying in from long-haul destinations.

Tony Hallwood, Leeds Bradford Airport’s aviation development director, said: “Leeds Bradford welcomes the wider choice of connections that make flying from Yorkshire so convenient and less hassle.

“Business and leisure travellers can now fly with British Airways after a day’s work and take advantage of excellent onward connections to Africa, Asia, Gulf, Middle East and South America.”