BA owner IAG cuts medium-term capacity and profit forecasts

IAG, which owns British Airways, is buying the Spanish Air Europa. (AP)
Updated 08 November 2019

BA owner IAG cuts medium-term capacity and profit forecasts

LONOND: British Airways owner IAG scaled back its forecast for capacity growth for the next three years on Friday, hitting its outlook for earnings per share but potentially providing relief for rivals in a weak global economy.

IAG said available seat kilometers, a measure of passenger-carrying capacity, was estimated to grow by 3.4 percent a year between 2020 and 2022, compared to a previous forecast of 6 percent growth a year for the 2019-2023 period.

The airline group, which also owns Iberia, Aer Lingus and Vueling, said the capacity growth cut would lower its forecast for growth in earnings per share (EPS) to 10 percent-plus a year from a previous forecast of 12 percent-plus a year.

IAG shares were down 3 percent in early trade.

The airline industry has struggled to maintain margins in the face of industry overcapacity and a muted economic outlook which has produced fierce competition over ticket prices.

Chief Executive Willie Walsh said last week that he expected global macroeconomic softness to continue in 2020. The company has also taken a hit from industrial action at British Airways, which knocked its outlook for profits this year.

IAG said the forecasts for capacity growth numbers were not adjusted for the impact of the pilot strikes. After 48 hours of action in September, no further industrial action is scheduled although the dispute over pay remains unresolved.

The issues at BA, which was forced to ground 1,700 flights during the walkout, was cited by easyJet as helping its performance in the last quarter, while Lufthansa has also said slower capacity growth at rivals was providing relief.

In a further sign of an easing of industry overcapacity, Ryanair is set to grow at its slowest rate in seven years in the year to March 31, 2021, as it expects further delays to its Boeing 737 MAX deliveries and may be without the jets next summer.

Friday’s strategy update comes after IAG said on Monday it would buy Spain’s Air Europa to boost its presence on routes to Latin America and the Caribbean.

IAG said it expected the deal, which will be funded through external debt, to close in the second half of next year and for it to add to its earnings in the first full year after the closure.


Are robots ever going to replace doctors? Experts say ‘no’

Updated 8 min 29 sec ago

Are robots ever going to replace doctors? Experts say ‘no’

  • The panel addressed the role of artificial intelligence (AI) and robotics in the medical field

DUBAI: The growing use of technology in the healthcare industry will continue to expand but should not take over from the primary care provided  by doctors and nurses, a panel of health experts said in a panel discussion at the World Economic Forum on Thursday.

The panel addressed the role of artificial intelligence (AI) and robotics in the medical field, agreeing that all care should remain focused on the needs of the patient, adding that “robots can’t replace doctors.”

But Leif Johansson, chairman of the board at pharmaceutical company, AstraZeneca AB, said the technology would be especially essential to “screening programs and extending access to care.”

“The only way to support primary care centers with low-skilled people, for screening purposes, will be with AI, robotics,” he explained, citing India as an example of a country with a shortage of qualified doctors who can address the needs of a massive population.

While technology presents potential benefits to the industry, Lisa Sanders, Associate Professor at the Yale Medical School, said she was concerned current technology faced a “barrier in data input.”

“How is AI or the robot going to get the data they need from patients?” Sanders, the doctor who was the inspiration behind the hit US TV show “House,” said, questioning how technology “would be able to assess patients when they’re complex and confused.”

Jodi Halpern, a professor of bioethics, shared the same sentiment, and highlighted what she described as three important situations when “a relationship with an actual human doctor makes a difference for effective healthcare.”

One was taking medical history from patients, Halpern said, explaining most patients would only disclose personal information when there’s empathy from doctors.

“If we don't get a good history, we won't get a good treatment," she added.

Another was ensuring patients take medication, and lastly was helping people deal with bad news.

Sanders, a physician herself, said “it’s not the thinking” that doctors need help from technology for, but "other things like dealing with poorly conceived systems of medical records."