Aer Lingus owner IAG pares back spending plans
Aer Lingus owner IAG pared its long-term earnings outlook and reined in its capacity and spending plans as sluggish demand and a slide in the value of sterling following the Brexit vote hurt revenues.
Earnings before interest, tax, depreciation, amortisation and aircraft rental will now average €5.3bn over the 2016 to 2020 period, down from the €5.6bn estimated previously, IAG, headed by Willie Walsh, inset, said in a statement yesterday.
The company, which also owns British Airways and Iberia and Vueling of Spain, said capacity will now grow by 3pc a year over the period, compared with 3pc to 4pc under prior plans. Capital spending will average €1.7bn, versus prior guidance for a figure below €2.5bn.
The revision comes after IAG said on October 28 that it anticipated an operating profit of about €2.5bn for 2016, up about 7pc from 2015's €2.34bn, having previously forecast low double-digit growth. The downgrade was the second since the UK voted to quit the European Union on June 23.