The IAG Corporation, which owns the British Airways, said most of its 2019-2023 financial targets matched with those announced in its long-term plan last year. Thus, the company retains its target of operating profit margin of 12-15%. The group, which also owns airlines Iberia, Aer Lingus and Vueling, posted positive prospects despite the sharp rise in fuel prices this year. The company continues to perform better than the competing European airlines Lufthansa and Air France-KLM.
IAG’s, whose shares rose 3% at the beginning of the session, show that average earnings per share will increase by more than 12% yoy from 2019-2023, which is consistent with last year’s forecasts.
the aviation group raised its prospects for the basic annual profit averaging around 7.2 billion EUR from 6.5 billion EUR.
The IAG’s Chief Executive Officer William Walsh and other senior managers will present the forecasts to investors.
For 2018, IAG expects annual profit growth of 200 million EUR. For comparison, Lufthansa’s adjusted earnings forecast this year shows a slight decline from the record of 2017.
Air France-KLM has struggled over the past year with expensive strikes before finally concluding a deal with the trade unions in October. It faces serious competition from low-cost carriers and from IAG and Lufthansa, but fails to restructure its costs and services as they do.
In its forecasts, IAG increased its capital expenditure expectations to 2.6 billion EUR per year from 2.1 billion EUR per year and will increase the total number of seats per kilometer – a measure of capacity – by 6% per year. It does not provide any further details on the capacity increase, which will include the rapidly growing low-cost carrier Level.
The company also did not provide an update on its plans with regard to Norwegian Airlines – the airline, which rejected two proposals for acquisitions by IAG this year.
