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LONDON, Feb 28 (Reuters) - British Airways-owner IAG
said coronavirus would hit earnings this year but it
does not know by how much, as it warned weakening demand would
cause further flight cancellations in the coming days.
Coronavirus, the illness which emerged late last year in
China, has sent demand for travel plunging in recent weeks as
the outbreak has spread. Airlines are flying blind into a crisis
of unknown severity and duration.
IAG, which also owns Iberia and Aer Lingus, usually gives an
earnings forecast at this time of year but said the ongoing
uncertainty of the impact and duration of coronavirus meant it
could not give accurate profit guidance at this stage.
The company said that it was cutting costs and implementing
revenue initiatives to help it weather the storm, following
rival airlines such as Germany's Lufthansa and
Amsterdam-based KLM which have cut costs in recent days.
At IAG, flight cancellations due to falling travel demand
would constrain capacity growth this year, it said, adding it
expected to cut more flights on its short-haul European network
in the coming days, in response to an outbreak of the virus in
Italy.
For 2019, IAG reported a 5.7% drop in operating profit to
3.285 billion euros, slightly ahead of a downgraded forecast of
3.27 billion euros it gave in September when it said a pilots
strike would result in a 215 million euros hit.
IAG CEO Willie Walsh is overseeing his last quarterly
results announcement before he hands the reins to new boss Luis
Gallego, currently the boss of IAG's Iberia airline, on March
26.
(Reporting by Sarah Young; editing by Kate Holton)