IAG said it expected profits to rise by nearly 20% thanks to strong travel demand and lower costs, but its shares dropped over concerns that revenue trends were weaker than those of rivals.
His comments were made as the airline group unveiled its earnings for the three months to the end of September.
Over the quarter, Ryanair became embroiled in a fiasco over the rostering of its pilots, while Norwegian Air and other carriers have stepped up competition across the Atlantic.
The group is responding to fast expansion, including Norwegian and Lufthansa’s Eurowings, by adding capacity at Aer Lingus and the new Level low-cost brand, which flies to the US from Barcelona.
Its shares dropped by over 6%, having hit an all-time high this week, as analysts focused on the passenger unit revenue trend and transatlantic routes. Shares in the group, which also owns Vueling, are up 44% this year. “We consider the results to be broadly encouraging, but there may be an adverse short-term reaction to the unit revenue trend,” said Liberum analysts.
Mr Walsh told analysts that stripping out Aer Lingus, Level and three new BA transatlantic routes, unit revenue had increased by slightly over 1% on the North Atlantic routes.
“We see this as a solid performance,” he said, adding that transatlantic demand was good.
He said he was confident of a comprehensive Brexit agreement between the UK and EU on air travel that should allow flights to continue to operate as they currently do.
Unit costs across IAG fell, helped by a drop in the fuel price.
However, it added a further €65m in costs related to a computer system failure at British Airways that stranded 75,000 people over a May bank holiday weekend.
IAG said third-quarter operating profit before exceptional items rose 20.7% to €1.46bn.
It expects operating profit for the full year to be €3bn before exceptional items, up 18.3% on last year.
Reuters, Irish Examiner, Bloomberg