IAG to reassess plane orders amid slowing economy, decline in fares and Brexit vote

International Consolidated Airlines Group said it will review its plane orders amid a global economic slowdown and the outcome of Britain's decision to leave the European Union. The owner of British Airways, Iberia and Aer Lingus said after the referendum in June that it would have to cut spending on the back of weaker demand from business customers, while the sharp decline suffered by the pound only exacerbated the problem.

Both issues are yet to be resolved, group chief executive Willie Walsh said on Thursday (8 September), while speaking at an airline conference in London.

He added that the FTSE 100 giant and its sector peers were likely to rein in spending on new aircraft for the foreseeable future.

"Without doubt all airlines, including airlines within IAG, are reassessing their requirements for new aircraft, as the outlook for growth has softened," he was quoted as saying by Bloomberg TV. "I don't think we're going to see growth rates that were anticipated."

Walsh's latest comments are another warning for Airbus and Boeing, the world's leading aircraft manufacturers, which have registered their lowest order figures in six years, as the aviation sector continues to swim against the tide amid a challenging environment.

Last year IAG ordered 20-single single-aisle Airbus A320neo and, earlier this year, the group indicated it would purchase used widebody Boeing 777s and lease Airbus's double-decker A380s for some of its British Airways routes.

However, IAG's chief executive was more optimistic over the outlook for the sector, indicating a number of airlines wanted to join the conglomerate, although the company was not looking to consolidate its operations at the moment.

"We're always looking for the opportunity," he said. "We're structured to facilitate further consolidation if the right opportunity comes along. We're not actively looking at anything in particular at the moment."