6th Nov 2015 07:17
LONDON (Alliance News) - International Consolidated Airlines Group SA on Friday upgraded its long-term guidance on returns and margins and announced a reshuffle of its management team.
The group, which owns British Airways and Spanish carrier Iberia and recently acquired Irish airline Aer Lingus, said it has upgraded its sustainable return on invested capital target for 2016 to 2020 to 15% from 12% previously.
It has also upgraded its guidance on operating margin target to between 12% and 15%, up from 10% to 14% previously, and is now targeting average annual growth in its earnings per share over the five-year period of 12%, compared to 10% before.
IAG said it is now targeting capital expenditure of less than EUR2.5 billion a year, compared to USD2.0 billion to EUR3.0 billion previously, and said it is looking to generate equity free-cash flow of EUR1.5 billion to EUR2.5 billion a year, up from EUR1.0 billion to EUR1.5 billion previously.
In addition to the upgraded targets, the group said it has reshuffled the management of its airlines. Keith Williams will retire as the executive chairman of British Airways in April 2016 and will be replaced by Alex Cruz, currently the chairman and chief executive of Vueling, the low-cost arm of Iberia.
Nick Swift will step down as British Airways chief financial officer at the same time and will be replaced by Steve Gunning, the chief executive of IAG Cargo.
In a separate statement, IAG said its group traffic, measured in revenue passenger kilometres, rose 17% in October to 20.7 billion, up from 17.8 billion a year earlier. On a pro-forma basis, including the results from Aer Lingus, traffic increased 7.6%.
The group's load factor for the month increased by 2.4 percentage points to 83.4% from 81.0% a year earlier and was up 2.5 points on a pro-forma basis.
By Sam Unsted; [email protected]; @SamUAtAlliance
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