IAG share price slides as British Airways parent trims growth outlook

on Nov 4, 2016
Updated: Oct 21, 2019

Shares in British Airways and Iberia parent International Consolidated Airlines (LON:IAG) have fallen deep into the red in London today after the company, which also owns Aer Lingus and Spanish lowcost airline Vueling, cut its spending and earnings targets. The blue-chip group, however, meanwhile posted a rise in the number of passengers it carried last month.

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As of 09:20 GMT, IAG’s share price had fallen 3.22 percent to stand at 436.30p, underperforming the broader London market, with the benchmark FTSE 100 index currently 1.36 percent worse off at 6,698.42 points. The group’s shares have lost just under a quarter of their value over the past year, and are down by some 28 percent in the year-to-date.
IAG announced in a Capital Markets Day statement this morning that it was now targeting earnings before interest, taxes, depreciation, amortisation, and restructuring or rent costs (EBITDAR) of approximately €5.3 billion average per annum for the 2016-2020 period, as compared with an earlier forecast of €5.6 billion average per annum. The British Airways parent also trimmed its capex guidance to €1.7 billion per year for the five-year period, from an earlier target of €2.5 billion.

The group, however, is sticking to its return on invested capital guidance of 15 percent and average earnings per share growth of at least 12 percent. IAG’s Capital Markets Day follows the company’s third-quarter results a week ago, when the British Airways parent said that it expected to deliver a full-year operating profit of about €2.5 billion.
In a separate statement, IAG reported that its traffic measured in revenue passenger kilometres had increased by 3.1 percent last month as compared with the prior-year period, while group capacity measured by available seat kilometres had climbed by five percent.
As of 09:47 GMT, Friday, 04 November, International Consolidated Airlines Grp share price is 385.00p.


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