International Consolidated Airlines Group (LON:IAG) faces a £183.4-million fine over a data breach which, AJ Bell reckons, could cost the company even more in customer trust, Citywire reports. The FTSE 100 company disclosed yesterday that it had been notified by the Information Commissioner’s Office (ICO) that it intends to issue the airline with a penalty notice over the theft of customer data from British Airways’ website last year.
IAG’s share price fell in the previous session as investors digested the fine prospects, giving up 1.36 percent to 450.30p, and underperforming the broader UK market, with the benchmark FTSE 100 index shedding 3.87 points to end trading 0.05 percent lower at 7,549.27. This morning, the shares have extended their losses, having given up 1.13 percent to 445.20p as of 08:14 BST, compared with a 0.1-percent fall in the Footsie.
AJ Bell weighs in on IAG
Citywire quote AJ Bell analyst Russ Mould as commenting yesterday that the fine for the British Airways customer data breach showed that the regulator was “becoming increasingly strict but consumers and other customers are also likely to be unforgiving of failures in this area”.
“A strong consumer brand like British Airways relies on trust and it could be highly damaging if prospective flyers feel they can’t trust the company with their data,” the analyst pointed out.
Other analysts on group
George Salmon at Hargreaves Lansdown meanwhile commented in a note yesterday that while the ICO fine is an ‘unwelcome distraction,’ the British Airways parent should be able to withstand the impact.
“It’s a one-off hit, is less than 10 percent of next year’s expected profits and could yet be reduced on appeal,” the analyst elaborated, adding, however, that that was “not to say improvements aren’t required”.
According to MarketBeat, the British Airways parent currently has a consensus ‘hold’ rating, while the average target on the IAG share price stands at 654.62p.