International Consolidated Airlines Group (IAG), the company which owns British Airways, is blaming Brexit for a €148 million (£124 million) foreign exchange loss in the first 6 months of 2016.
The pound dropped to 31-year lows against the dollar in the immediate aftermath of the EU referendum — though not so heavily against the euro — and IAG’s share prices fell over 33% when it admitted last month that the more volatile market would take its toll.
Although the company’s second quarter operating profit for 2016 was up to €555 million (£467 million) from €530 million (£446 million) in the same period a year ago, IAG says the result of the EU referendum hit it hard.
But IAG has more to deal with than just a weak pound. CEO Willie Walsh said in a statement:
“Our performance this quarter saw a negative currency impact of €148 million, primarily due to the weak pound. Numerous external factors affected our airlines including the impact of terrorism, uncertainty around the UK’s EU referendum and Spain’s political situation and increased weakness in Latin American economies. This led to a softer than expected trading environment, especially in June.”
Walsh also blamed “22 air traffic control strikes in Europe so far this year,” as well as adverse weather conditions, both of which will cost the company at least €80 million (£67.3 million) in the second half of the year.
Despite the foreign exchange hit, IAG’s total revenue for the three months to June 30 hit €5.708 billion (£4.8 billion), up 0.9% from the same quarter a year ago.
Here is a look at IAG’s share price as of 8:40 am GMT: