British Airways owner IAG cuts spending and earnings targets
International Airlines Group (IAG), the company behind British Airways, Iberia and Aer Lingus, said today it is trimming its spending and earnings targets in the run-up to 2020 – shortly after it posted a fall in profits.
The airline operator said although it has a strong balance sheet, it expects earnings before interest, taxation, depreciation, amortisation and restructuring to hit an average of €5.3bn a year in the next four years, compared with €5.6bn it had previously suggested.
In a statement released ahead of its capital markets day, it added that capital expenditure will be €1.7bn a year, down from "less than" €2.5bn a year it had previously guided.
The guidance comes after IAG released figures showing operating profits had fallen 3.6 per cent in the three months to the end of September, with revenues falling four per cent. In July it said the falling pound had hit it to the tune of €148m.
Still, this morning it also unveiled figures showing the number of passengers it carried in October rose 3.9 per cent on last year, to 8.8m – bringing its total for 2016 up to 86.3m, up 6.5 per cent on last year.
It also used the opportunity to reiterated how pleased it is about the government's decision to build a third runway at Heathrow airport.
"IAG… is pleased a decision has finally been made and that the government's directive to cap customer charges at today's level is fundamental.
"Heathrow is the world's most expensive hub airport so it's critical that new capacity is affordable."