By Steve Goldstein
Shares of British Airways owner International Airlines Group /zigman2/quotes/208070069/delayed UK:IAG -2.56% fell as much as 8% on Friday, as investors took a pessimistic position on the group’s outlook.
The operating loss of €2 billion ($2.37 billion) was hardly a surprise given the airline flew at 22% of 2019 capacity. The company said passenger traffic won’t return to pre-pandemic levels until 2023 at the earliest, as it forecast third quarter capacity at 45% of 2019 levels.
“Management’s done a terrific job making the most of the situation—operating costs have come down significantly and cargo revenue is at an all-time high. But IAG’s in the business of flying people around the world, a tricky place to be in a global pandemic,” said Laura Hoy, equity analyst at Hargreaves Lansdown.
Other companies geared to reopening also struggled, a sign of global worries around the delta variant of coronavirus. Engine maker Rolls-Royce /zigman2/quotes/203646520/delayed UK:RR -2.10% fell 3%, travel operator TUI /zigman2/quotes/207049334/delayed UK:TUI +1.64% lost 4% and easyJet /zigman2/quotes/202825892/delayed UK:EZJ -0.53% fell 4%.
NatWest /zigman2/quotes/209265718/delayed UK:NWG +0.79% was another decliner, losing 3% even as the bank topped earnings estimates, restarted its dividend and said it would buy back £750 million of stock. Jason Napier, an analyst at UBS, pointed out the earnings beat was driven by a much larger impairment credit than expected, and that underlying income was lower.
The broader FTSE 100 slumped 0.9%, as European stock markets also declined.