IAG share price closes lower as British Airways traffic suffers
Shares in International Consolidated Airlines Group (LON:IAG) lost more than one percent yesterday, as the company revealed that passenger traffic at its British Airways unit had dipped last month. The group, which also owns Iberia, Aer Lingus and low-cost carriers Vueling and Level, however, also reported that its overall passenger traffic had climbed in August.
IAG’s share price shed 1.41 percent to close at 595.00p yesterday, underperforming the broader London market, with the blue-chip FTSE 100 index ending the session 0.52 percent in the red at 7,372.92 points. The group’s shares have added more than 51 percent to their value over the past year, and are up by just under 35 percent in the year-to-date.
IAG disclosed in a statement yesterday that its traffic measured in revenue passenger kilometres had increased 1.2 percent year-on-year last month. Group capacity measured in available seat kilometres meanwhile came in 0.4 percent higher. Despite the overall rise, the company’s British Airways and Vueling units posted traffic declines of 0.6 percent and 5.2 percent, respectively. Aer Lingus meanwhile saw its traffic soar by 10.2 percent, while traffic at Iberia climbed by 6.5 percent. IAG did not provide separate statistics for Level, which was launched in June as low-cost transatlantic carrier.
Today’s traffic statistics follow the group’s second-quarter update in July, when the FTSE 100 company disclosed that British Airways had to book a €77-million charge over the IT failure at the airline which caused travel chaos for tens of thousands of passengers in May. IAG’s overall profit, however, climbed to €805 million before exceptional items, up from €555 million in the previous year.
In analyst news, HSBC reiterated its ‘reduce’ rating on the British Airways and Iberia parent this week, valuing the shares at 550p. According to MarketBeat, IAG currently has a consensus ‘hold’ rating and an average price target of 537.43p.
As of 07:59 BST, Wednesday, 06 September, International Consolidated Airlines Grp share price is 606.02p.