Profits at Aer Lingus parent company take a Brexit hit

IAG's quarterly results have fallen short of market expectations...

Profits at Aer Lingus parent company take a Brexit hit

Photocall file photo

Aer Lingus owner IAG has posted lower than expected quarterly profits - it says that the Brexit vote, strikes, and terror attacks affected demand.

Less Britons are making travel plans flowing the vote, and IAG's bottom line will be impacted by the weakening of the pound following the referendum.

The group's operating profit still rose by 4.7% to €555m in the three months to the end of June - although it had been expected to rise to €562m.

In February IAG said that the group's 2016 profit would be greater than €900m - which would have represented an increase of over 40% on the previous year. However, it has now announced that following the Brexit vote it no longer expects an increase of this size.

IAG also carries British Airways, Iberia, and Vueling - Chief Executive Willie Walsh said that the group will continue to cut costs throughout the rest of the year.

"It's unclear when UK corporates will regain confidence in terms of travelling and doing business [...] It will have to happen... whether that's later this year or early next year we'll have to wait and see," Mr Walsh told reporters.

Shares in the group have lost close to one third of their value since the beginning of this year.