IAG scales back summer ramp-up

STORY: IAG shares felt a sharp 8% on Friday (May 6).

Investors were spooked when the company cut back on plans for more short-haul flights at Heathrow airport this summer.

The company has struggled with a lack of staff, particularly ground workers.

The British-Airways owner has seen crew absences due to the Omicron variant.

Flights also had to be cancelled during the first quarter, with IT issues adding to the challenges.

IAG announced a first-quarter operating loss of $798 million - far higher than analysts had expected.

It also lowered its full-year group capacity guidance to around 80% of 2019 levels, from 85% it gave in a February forecast.

But the company does see some hopes for a better year ahead.

IAG still expects to report operating profits from the second quarter, and for the year.

Chief Executive Luis Gallego said fewer travel restrictions had led to better travel demand.

He also claimed the challenges IAG faced were being felt across the industry.

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