British Airways owner IAG says strikes cost £121m

British Airways owner IAG has warned that its profits will be lower than expected this year, partly due to the impact of strikes by its pilots.

It said the strike earlier this month, in a row over pay and conditions, had cost it at least €137m (£121m).

Overall, IAG expects its operating profit for this year to be €215m lower than previous guidance.

There have been no further talks between BA and the pilots' union, and more strikes will hit profit, IAG said.

As a result of the two-day strike by pilots on 9 and 10 September, IAG said a total of 2,325 flights had been cancelled. A strike by BA pilots that had been scheduled for 27 September was called off last week.

• BA strike: Why are pilots walking out?

In addition to the costs from the pilots' strike, IAG took a €33m hit over threatened strikes at Heathrow Airport by employees.

The airline group also said its results would include a €45m hit from lower bookings and yields - a measure of the average fare per passenger mile - at its low-cost Vueling and Level airlines.

IAG also forecast lower growth in capacity - that is, the number of seats available - than it had previously thought, meaning it would reduce pilot recruitment plans.

Shares in IAG were among the biggest losers on the FTSE 100 in early trading, dropping about 3.7%, before paring some losses.

The British Airline Pilots' Association (Balpa) has said strike action by its members is a "last resort" due to "enormous frustration" with management.

Pilots rejected a pay increase worth 11.5% over three years, which BA proposed in July.

Balpa says its members took lower pay rises and made other sacrifices during tougher times for the airline, and now that BA's financial performance has improved - IAG reported a 9% rise in profits last year - they want a greater share of the profits.

Thomas Cook slots

In a call with analysts, IAG chief executive Willie Walsh said the airline group was interested in slots at Gatwick that may be up for grabs following the collapse of travel firm Thomas Cook.

"If there's an opportunity to acquire some slots through the administration process, we will be looking at that," he said. "We see Gatwick as an opportunity for us."

The 178-year-old holiday firm collapsed on Monday after rescue negotiations failed, triggering the biggest peacetime repatriation to bring 150,000 UK holidaymakers home.