Last checked at 
* Fails to give outlook for 2020 profit
* Says will cancel more flights in coming days
* 2019 profit fell 5.7%, slightly ahead of forecasts
* Shares down 8%
(Adds CEO comments, analyst comments, share price)
By Sarah Young
LONDON, Feb 28 (Reuters) - British Airways-owner IAG
said on Friday that coronavirus would hit its earnings
this year but it wasn't sure by how much, becoming the latest
airline to warn about the impact of the rapidly evolving
outbreak.
Coronavirus, which emerged late last year in China, has sent
demand for travel plunging in recent weeks as the outbreak has
spread around the world. Airlines are flying blind into a crisis
of unknown severity and duration.
IAG, which also owns Iberia and Aer Lingus, usually gives an
earnings forecast at this time of year but said the uncertainty
of the impact and duration of coronavirus meant it could not
give accurate profit guidance at this stage.
"It's a rapidly changing situation," Chief Executive Willie
Walsh told reporters on Friday. "I wouldn't call it
unprecedented. We have seen other challenges for the industry."
British Airways has in recent days cancelled flights to and
from Italy, Singapore and South Korea, after it suspended all
direct flights to China in January. IAG said further
cancellations would follow in the coming days.
British budget airline easyJet also warned on Friday
that it had seen "significant" softening of demand for travel to
Italy and other European markets and would cancel flights and
cut costs. Finland's Finnair also warned of a
significant fall in profit.
STOCKS PLUNGE
The rapid spread of coronavirus has sent shockwaves through
the global economy, hammering corporate supply chains, curbing
travel, cancelling conferences and sporting events, and wiping
tens of billions of pounds off financial markets.
Share prices were on track for their worst week since the
global financial crisis in 2008 and IAG's is down 25% since the
middle of January. On Friday it fell a further 8% to 474 pence.
The outbreak in Italy over the last week has brought new
disruption to short-haul European travel but Walsh said IAG,
with its strong balance sheet, was well-placed to withstand it.
"I'm very confident that we'll navigate our way through
these challenges," said Walsh, overseeing his last quarterly
results announcement before new boss Luis Gallego takes over on
March 26.
Bernstein analyst Daniel Roeska backed Walsh's thinking: "We
are also confident that a downturn would reveal the strength of
the IAG model."
IAG said it was cutting costs and implementing revenue
initiatives, which included looking at all discretionary
spending, to help it weather the storm. That's in line with
moves by Germany's Lufthansa and Amsterdam-based KLM
which have both cut costs in recent days.
IAG said flight cancellations due to falling demand would
hit its 2020 capacity growth though Walsh said it could start
adding capacity if other airlines fail and that the group was in
a strong position to benefit from any recovery.
The company also said its acquisition of Air Europa remained
on track for completion later this year and was not affected by
the coronavirus outbreak.
For 2019, IAG reported a 5.7% drop in operating profit to
3.285 billion euros, slightly ahead of a downgraded forecast of
3.27 billion euros it gave in September when it said a pilots
strike would result in a 215 million euros hit.
(Reporting by Sarah Young; editing by Kate Holton, Guy
Faulconbridge and David Clarke)
