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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  International Consolidated Airlines Group, SA    IAG   ES0177542018

INTERNATIONAL CONSOLIDATED AIRLINES GROU

(IAG)
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British Airways owner IAG's profit propelled by North American tailwind

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08/02/2019 | 05:35am EDT
FILE PHOTO: British Airways logos are seen on tail fins at Heathrow Airport in west London

DUBLIN (Reuters) - British Airways owner IAG gave an optimistic outlook on Friday as growing revenues in North America and an easing in fuel cost growth helped it exceed profit forecasts for the first half of its key summer period, lifting its shares.

IAG Chief Executive Willie Walsh also said he "would like to hope" that British Airways could reach a deal with its pilots, who last month voted for strike action in a dispute over pay, although they have not yet served notice.

"Despite fuel cost headwinds, we delivered a good performance. We're on track to meet our financial targets," Walsh said of the owner of Iberia, Aer Lingus and Vueling.

IAG shares were up 2.3% at 0915 GMT compared to a fall of 2% on Europe's STOXX 600 index, after IAG said second-quarter operating profit had risen to 960 million euros (907 million pounds).

This was 5% ahead of the 914 million forecast in an IAG poll of analysts, and up from 900 million last year and a sharp contrast to a 60% fall in first quarter operating profit.

IAG said its revenue per passenger was up 1.1% in the quarter on a constant currency basis up from a fall of 1.4% in the first three months, while fuel unit costs growth came in better than expected at 6.3%.

Passenger revenue per seat kilometre in North America rose 2.9%, from a fall of 2.3% in the previous quarter, while in Europe they improved from a fall of 5.7% in the first quarter to a fall of 1.1% in the second.

"Given all the uncertainties over global growth and Brexit, this looks to be a very strong statement by the company and implies that forward bookings are trending well," Goodbody analyst Mark Simpson said in a note.

OVERSUPPLY EASING

The strong results come days after rival Lufthansa cited intense short-haul competition in Europe for pushing profits down 25% and Ryanair cited a weak fare environment for profit down 21% in the same quarter.

But Walsh, who has trimmed traffic growth plans for the last three months of the year to 3.2% from 5.9% six months ago, said he was not too concerned about oversupply.

"We think the supply environment is going to be OK, certainly in the fourth quarter and going into the first quarter of next year," he told journalists in a conference call, saying he planned to taper growth in the last three months of the year.

"The economic environment is clearly softening, but it is still reasonably good," he added.

Air France-KLM this week posted even stronger growth in operating profit of 16% as new Chief Executive Ben Smith's cost-cutting helped offset fuel cost rises.

While Walsh said he was worried about the economic impact of Britain's plan to leave the European Union on Oct. 31, he did not see significant regulatory issues and had not yet seen any impact on bookings.

MAX FACTOR

Walsh also said he was in talks to bring forward the first delivery of Boeing's grounded 737 MAX jet by a year to 2022.

IAG stunned industry executives at the Paris Airshow in June by signing a letter of intent to buy 200 737 MAX jets, with a plan for deliveries between 2023 and 2027.

"We are looking at bringing forward the delivery to 2022, which we think will be possible," Walsh said.

(Reporting by Conor Humphries; editing by David Evans and Alexander Smith)

By Conor Humphries

Stocks mentioned in the article
ChangeLast1st jan.
AIR FRANCE-KLM 1.52% 9.206 Real-time Quote.-4.35%
BOEING COMPANY (THE) -0.43% 377.32 Delayed Quote.17.64%
INTERNATIONAL CONSOLIDATED AIRLINES GROUP, SA -1.36% 471.3 Delayed Quote.-22.69%
LUFTHANSA GROUP AG 0.99% 14.215 Delayed Quote.-28.55%
NORWEGIAN AIR SHUTTLE ASA -2.29% 37.19 Delayed Quote.-61.84%
RYANAIR HOLDINGS 0.90% 10.09 Delayed Quote.-6.98%
STOXX EUROPE 600 -0.80% 389.8 Delayed Quote.16.04%
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Financials (EUR)
Sales 2019 25 771 M
EBIT 2019 3 304 M
Net income 2019 2 312 M
Debt 2019 6 668 M
Yield 2019 5,91%
P/E ratio 2019 4,94x
P/E ratio 2020 4,65x
EV / Sales2019 0,68x
EV / Sales2020 0,63x
Capitalization 10 735 M
Chart INTERNATIONAL CONSOLIDATED AIRLINES GROUP, SA
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International Consolidated Airlines Group, SA Technical Analysis Chart | MarketScreener
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Technical analysis trends INTERNATIONAL CONSOLIDATED
Short TermMid-TermLong Term
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Income Statement Evolution
Consensus
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Mean consensus BUY
Number of Analysts 16
Average target price 7,60  €
Last Close Price 5,41  €
Spread / Highest target 114%
Spread / Average Target 40,5%
Spread / Lowest Target -8,86%
EPS Revisions
Managers
NameTitle
Chief Executive Officer & Director
Chairman
Chief Financial Officer & Executive Director
Independent Non-Executive Director
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Sector and Competitors
1st jan.Capitalization (M$)
INTERNATIONAL CONSOLIDATED AIRLINES GROUP, SA-22.69%11 844
DELTA AIR LINES INC.17.50%37 981
UNITED AIRLINES HOLDINGS INC6.40%22 889
AIR CHINA LTD.10.86%16 054
RYANAIR HOLDINGS-6.98%12 243
ANA HOLDINGS INC-2.78%11 611