Friday 20 September 2019

Aer Lingus owner IAG upbeat about earnings growth

Shares in the parent company of Aer Lingus, IAG fell over past three weeks.
Shares in the parent company of Aer Lingus, IAG fell over past three weeks.

AER Lingus-owner IAG upgraded its target for 2016 to 2020 earnings growth to over 12 percent a year, underlining the group's long-term confidence at a time when rivals are hamstrung by internal issues.

Issuing a series of improved financial metrics, IAG said ahead of an investor event that it would aim for average annual earnings per share growth of over 12 percent, up from the 10 percent-plus figure previously targeted.

IAG's focus on growing earnings at a portfolio comprising BA,  Aer Lingus and Spain's Iberia and Vueling, comes as Lufthansa and Air France struggle with strikes and worker opposition to cost cuts.

Lufthansa's main cabin crew union said a week-long strike would start on Friday. The airline has already been hit by over a dozen pilot strikes in the last 18 months, while Air France has had to lower its sights on cost cuts after negotiations ended with managers fleeing a meeting and scrambling over fences.

IAG's boss Willie Walsh has been praised for managing to cut costs at both British Airways and Iberia since the pair sealed an $8 billion merger in 2011, acting before its French and German rivals, and making it better able to compete against Gulf carriers on long-haul routes and low-cost airlines like easyJet in Europe.

IAG also announced on Friday that Alex Cruz, current chief executive of Vueling would next year replace Keith Williams as executive chairman of British Airways as Williams retires.


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