Shares in International Consolidate Airlines Group (LON:IAG) have climbed higher in London this morning even as the British Airways and Iberia parent unveiled a drop in profits for the first quarter of the year. The blue-chip company, which also owns Aer Lingus and low-cost carriers Vueling and Level, pointed to fuel and foreign exchange headwinds, as well as the timing of Easter.
As of 08:59 BST, IAG’s share price had gained 3.05 percent to 504.20p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.61 percent higher at 7,251.17 points. The group’s shares have added more than 26 percent of their value over the past year, as compared with a near six-percent fall in the Footsie.
IAG posts drop in profits
IAG announced in a statement this morning that its first-quarter operating profit had fallen to €135 million, from €340 million in the prior-year period. The group’s passenger unit revenue meanwhile fell 0.8 percent, down 1.4 percent at constant currency.
“In a quarter when European airlines were significantly affected by fuel and foreign exchange headwinds, market capacity impacting yield and the timing of Easter, we remained profitable,” IAG’s chief executive Willie Walsh said in the statement.
Group updates on outlook
IAG said that at current fuel prices and exchange rates, it expects its operating profit before exceptional items in the current year to be in line with 2018 pro forma. Passenger unit revenue meanwhile is forecast to be flat at constant currency and non-fuel unit cost is expected to improve at constant currency. The company expects passenger unit revenue at constant currency to improve for the remainder of the year.
According to MarketBeat, the British Airways and Iberia parent currently has a consensus ‘buy’ rating, while the average target of the IAG share price stands at of 690.36p.