Aer Lingus owner IAG upgrades earnings target
British Airways-owner IAG has upgraded its long-term guidance, targeting an average earnings growth of over 12pc a year, as it also announced a number of management changes within the group.
IAG, which in August added Aer Lingus to a portfolio comprising BA and Spain's Iberia and Vueling, said that Alex Cruz, current chief executive of Vueling, would next year replace Keith Williams as executive chairman of British Airways. Mr Williams is to retire in April.
At the same time, Nick Swift will be stepping down as finance director of British Airways and Steve Gunning, current CEO of IAG Cargo, will be replacing him.
For the 2016-2020 period, IAG will aim for average annual earnings per share growth of more than 12pc, up from the 10pc-plus figure previously targeted.
It is also targeting a return on invested capital of 15pc, compard with previous guidance of over 12pc. Capital spending will be less than €2.5bn a year.
The airline group recently reported soaring third quarter results, with operating profits up 38.9pc to €1.25bn, buoyed by strong demand during the peak summer period.
Aer Lingus contributed €45m to group profits. Overall revenues at IAG climbed 15.2pc to almost €6.8bn in the quarter, while pre-tax profits rose to €1.1bn from €745m a year earlier.
The airlines owner also raised its guidance for full-year operating profits, excluding Aer Lingus, to a range of €2.25bn to €2.3bn, from a previous forecast of “in excess” of €2.2bn.
IAG reached a milestone last week when it announced a 10 euro cent-a-share interim dividend, its first investor pay-out since the company’s creation following BA’s merger with Iberia in 2011. Mr Walsh said a final dividend was “likely to be something in the same order” and would total about €400m.