IAG pulls back capacity growth forecast

IAG is cutting its medium-term capacity growth targets, slashing the figure to 3.4% per year for 2020-22 from its previous level of 6% for 2019-23.

Capacity growth in 2020 will be around 3.2%, says the company, discounting effects from the British Airways strike in September this year.

This moderation of expansion will be reflected in lower average earnings per share growth of 10% for the three-year period rather than the 12% originally expected.

IAG has revised its outlook ahead of an investor briefing on 8 November.

Despite the revisions the company is maintaining its aim of a 12-15% operating profit margin for the period.

IAG plans gross capital expenditure of €4.7 billion ($5.2 billion) per year against a net capital expenditure of €2.6 billion under the previous outlook. This reflects a switch from net to gross capital expenditure in its forecasts.

It is also axing its monthly traffic updates from the beginning of 2020, instead adopting quarterly reporting.

IAG comprises five carriers – British Airways, Iberia, Vueling, Aer Lingus and Level – and has recently disclosed an agreement to acquire the Spanish operator Air Europa.

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