British Airways parent International Consolidated Airlines Group (LON:IAG) has warned it could opt to keep its new budget carrier Level out of the UK over air passenger duty, City A.M. reports. The FTSE 100 company, which also owns Iberia, Vueling and Aer Lingus, launched Level last year as it looks to compete with low-cost transatlantic carries such as Wow Air and Norwegian.
IAG’s share price has been little changed in London in today’s session, having inched 0.03 percent higher to 601.40p as of 14:38 GMT. The shares are marginally underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.41 percent higher at 7,243.86 points.
IAG warns on air passenger duty
City A.M. reported today that IAG’s chief executive Willie Walsh had written to MPs, saying that air passenger duty undermines Britain’s position as a global trading nation post-Brexit, and reduces the chance of him bringing Level to the UK. APD is levied against each passenger on every flight departing from the UK.
“British consumers are losing out because of APD. In Spain and France, Level can offer lower fares than it can in the UK – and that goes for other long-haul low-cost airlines too,” Walsh said, as quoted by the newswire. “If APD was axed, IAG could open new routes and operate Level from regional airports.”
Analysts on British Airways parent
HSBC reiterated its ‘reduce’ rating on IAG this month, valuing the shares at 565p, while Deutsche Bank remains bullish on the British Airways parent with a ‘buy’ rating and a price target of 730p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 605.12p. IAG is scheduled to update investors on its full-year performance on February 23.