IAG SA said the weaker demand on transatlantic routes has shown signs of easing over the past three weeks as the travel outlook begins to stabilize following a period of uncertainty.
The British Airways owner noticed “several weeks” of demand softness in its economy cabins from the US, though the situation is now recovering, IAG Chief Executive Officer Luis Gallego said on Monday in a Bloomberg TV interview. Some corporate travel also slowed after the US announced tariffs and business passengers delayed some travel as a result, he added.
Some airlines saw a decline in travelers flying between Europe and the US after President Donald Trump imposed tariffs on countries around the world. IAG, Air France-KLM and Deutsche Lufthansa AG all previously said that the weakness was more noticeable on their cheaper seats, while demand for premium travel remained robust.
“I think it’s more the uncertainty,” Gallego told Bloomberg’s Guy Johnson in New Delhi at the annual general meeting of the International Air Transport Association. “People don’t know what’s going to happen.”
IAG, which also owns Spain’s Iberia and Ireland’s Aer Lingus, last month announced a large purchase of Boeing Co. and Airbus SE widebody jets, a decision it made independently of tariffs, Gallego said. Following a US trade deal with the UK, the airline group won’t pay duties on its Boeing aircraft delivered to British Airways, he said.
“It’s true that we wanted to have more certainty on tariffs,” Gallego said. “We still need more details about the complete aviation picture.”