BA parent IAG downgrades profits forecast

BA parent IAG downgrades profits forecast

British Airways owner International Airlines Group today downgraded its annual earnings projections until 2020.

The group, which includes Aer Lingus, Iberia and Vueling, expects an average profit [EBITDA] of €5.3 billion a year, down from €5.6 billion forecast previously.

Capital expenditure will also be trimmed from €2.5 billion a year to €1.7 billion as part of long term planning goals.

Capacity growth will be about 3% a year against 3% to 4% previously anticipated.

However, IAG expects to maintain an operating profit margin of 12%-15%, a 15% return on invested capital and average growth in earnings per share of at least 12% a year.

IAG was using a capital markets day to provide the financial update today.

Shareholders were told that the group has a strong balance sheet and has no need for further deleveraging.

IAG reported a 3.1% rise in October passenger traffic with group premium traffic up by 4.7% year-on-year.

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