British Airways and Iberia parent International Consolidated Airlines Group (LON:IAG) is taking steps to avoid falling foul of European Union ownership rules in the event of a no-deal Brexit, Reuters has reported, quoting Spain’s newspaper El Pais. While the UK is set to leave the EU on March 29, the parties have yet to agree a withdrawal deal.
IAG’s share price has fallen into the red in today’s trading, having given up 1.52 percent to 633.60p as of 08:40 GMT. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.26 percent higher at 7,124.06 points. The group’s shares have added about 6.6 percent to their value over the past year, as compared with about a 3.7-percent dip in the Footsie.
IAG turns to Spanish government
Spanish newspaper El Pais reported, citing Spanish government and EU sources, that IAG had been in contact with the Spanish government since at least last month in an effort to ensure it will meet EU ownership rules, which require European operators to be majority owned and operated in the bloc. IAG is registered in Spain but has diverse global shareholders.
While the British Airways and Iberia parent did not comment directly on the report, a spokesperson told Reuters that the company remained confident that the UK and EU would reach a comprehensive air transport agreement.
“Even if there is no Brexit deal, both the EU and UK have said they will put an agreement in place that allows flights to continue,” the spokesperson said.
Analysts on British Airways parent
Credit Suisse, which sees IAG as a ‘buy,’ set a price target on the shares of 780p last week, while Deutsche Bank reaffirmed the British Airways parent as a ‘buy,’ with a valuation of 770p. According to MarketBeat, the FTSE 100 group currently has a consensus ‘buy’ rating and an average price target of 746.57p.