International Consolidated Airlines Group’s (LON:IAG) new low-cost airline Level will expand into short-haul routes, the British Airways and Iberia parent has said. The blue-chip company, which also owns Aer Lingus and Spanish low-cost carrier Vueling, launched budget long-haul carrier Level last year in an effort to compete with low-cost transatlantic carries such as Wow Air and Norwegian.
IAG’s share price has fallen deep into the red in today’s session, having given up 1.17 percent to 661.55p as of 13:38 BST. The stock is underperforming the broader London market, with the benchmark FTSE 100 index currently standing 0.44 percent lower at 7,588.03 points.
IAG’s Level flies to Vienna
IAG announced in a statement today that it was launching a new low-cost Austrian subsidiary, branded as Level, with flights from Vienna starting on July 17. The new subsidiary will have an Austrian Air Operator’s Certificate and will base four Airbus A321 aircraft in Vienna from where it will fly to 14 European destinations.
“We are launching this new short-haul subsidiary to provide Austrian consumers with more flight choices across Europe,” the FTSE 100 group’s chief executive Willie Walsh commented in the statement. The move comes after the British Airways parent lost out on the acquisition of Austrian airline Niki earlier this year, with former Formula One champion Niki Lauda making the winning bid for the insolvent carrier.
Analysts on FTSE 100 group
HSBC, which sees IAG as a ‘sell,’ set a price target of 600p on the shares last week, while Royal Bank of Canada, which rates the British Airways parent as an ‘underperform,’ boosted its valuation on the stock from 675p to 740p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 711.47p.