8th Nov 2019 08:30
(Alliance News) - International Consolidated Airlines Group SA on Friday cut its annual earnings per share growth forecast for the three years from 2020 to 2022 due to planned lower passenger capacity growth.
IAG shares in London were down 3.1% at 527.80 pence each in London, the worst performer in the FTSE 100 index.
The Anglo-Spanish airline holding company now expects average EPS growth of 10% per annum for the three years, compared with 12% per annum estimated previously.
The company attributed the EPS cut to lower planned available seat per kilometre growth, which is now predicted to be 3.4% per annum, compared with around 6% per annum estimated previously for 2019 to 2023.
ASK growth in 2020 is predicted to be 3.2%, excluding British Airways strikes in 2019 and leap year in 2020.
IAG made no change to its medium-term annual operating profit margin guidance of 12% to 15%. However, the company now expects gross capital expenditure to average EUR4.7 billion per annum compared with an average of EUR2.6 billion per annum net capital expenditure for 2019 to 2023.
Gross capital expenditure is defined as the total investment in fleet, customer product, information technology and infrastructure before any proceeds from sale of property, plant and equipment and intangible assets, IAG said.
The London-headquartered airline operator, which also owns Spain's Iberia and Ireland's Aer Lingus, also said that it will no longer disclose monthly traffic data from January, but will instead report traffic data on a quarterly basis, in line with other European and North American airlines.
All London-listed airlines, including also Ryanair Holdings PLC and easyJet PLC, currently report traffic monthly.
IAG said that October traffic, measured in revenue passenger kilometres, increased by 4.8% to 24.9 million from 23.8 million a year ago. Year-to-date traffic increased 5.6% to 241.6 million revenue passenger kilometres.
October capacity, measured in available seat kilometres, increased by 2.7% year-on-year to 29.4 million from 28.6 million.
IAG carried 10.4 million passengers in October versus 10.0 million a year ago. Load factor increased to 85.0% from 83.3%
British Airways saw 2.8% growth in October traffic, measured in revenue passenger kilometres, to 13.5 million. Iberia recorded 8.3% traffic growth, Aer Lingus 4.8%, Level 30% and Vueling 2.9%.
By Tapan Panchal; [email protected]
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