Profits surge but shares stall at British Airways owner
Lufthansa and Air France-KLM are among the carriers that this week recorded better-than-expected quarterly results
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Agreeing to pay its first dividend and raising its profit forecasts was not enough to prevent British Airways’ owner’s shares plummeting to the bottom of the FTSE 100 index.
The City, which has driven IAG shares up by 27 per cent in the past two months, was disappointed the airline owner could not beat expectations as much as its rivals after a bumper summer that saw British holidaymakers looking to escape the rain.
IAG shares fell 2.5 per cent, or 15p, to 582.5p, despite a 43.5 per cent rise in pre-tax profits to €1.1bn (£788m) in the three months to 30 September.
It came as IAG, which finally sealed its takeover of Ireland’s Aer Lingus in August, slightly raised its forecast for 2015 operating profits to between €2.25bn and €2.3bn, ahead of the expected €2.2bn.
Gerald Khoo, an analyst at Liberum, said: “The minor improvement to guidance may disappoint the market, given upward pressure on estimates at other European airlines.”
Lufthansa and Air France-KLM are among the carriers that this week recorded better-than-expected quarterly results thanks to strong demand and cheaper fuel.
However, IAG’s chief executive, Willie Walsh, shrugged off the shares fall to toast a 15.2 per cent rise in sales in the quarter to €6.7bn.
“The summer was very strong, with mixed weather in Britain leading to demand for sun holidays,” he said. “There were still some concerns over travelling to north African countries such as Egypt and Tunisia,” but, he added, holiday hotspots such as Spain remained popular.
Mr Walsh was speaking a day after the company confirmed it would be paying a dividend of 10 euro cents per share. Neither airline had paid investors any dividends since 2008, before IAG was created through the merger of BA and Iberia in 2011.
Mr Walsh said that Aer Lingus made an operating profit of €45m since it joined IAG. “It’s a great asset for the group.”
He added that he wants to see the UK remain part of the EU “on a personal basis” but admitted that it “should and could” be better than it is.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments