IAG's budget carrier Level has performed below expectations in Paris and Vienna, group chief executive Willie Walsh admitted today.
Level operates long-haul flights out of Paris and has a short-haul base in Vienna, adding to a long-haul base in Barcelona.
While the Barcelona operation has performed well, the situation in Paris and notably Vienna has been tough, Walsh told analysts after IAG reported first-quarter results.
The Austrian capital has over the last year become a battleground for Europe's biggest low-cost carriers.
"Vienna has seen huge increase in capacity, so that has had a big impact on yields in the Vienna market, which are behind what we had planned," says Walsh, though he adds that volumes and customer reaction have been better than expected.
"It's a market where... the airport is certainly making money and customers are getting good offers but it is challenging for the airlines," he says.
The situation in Paris is easing as competitors withdraw, Walsh adds.
IAG does not break out Level's financial performance.