International Consolidated Airlines (IAG) rose strongly on Friday after saying that it expects to make €1.5bn in operating profits in 2015, significantly higher than €6m achieved in 2010.
In its Capital Markets Day, the firm will reveal its target which it expects to achieve through an increase from €400m to €450m in synergy targets (from the merger of British Airways and Spain's Iberia) from year five, €400m of structural profit improvements and €150m in organic growth.
Iberia Express, the group's recently launched short- and medium-haul network, as well as hub improvements at Madrid's Barajas airport are expected to create a "financial benefit" of at least €100m each.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Furthermore, capacity is estimated to grow at an organic rate of 2.5% oer annum and introducing new aircraft into the fleet is expected to save the firm €250m. The "optimisation" of the transatlantic joint business with American Airlines will deliver at least €150m (from a 2010 base).
Capital expenditure is expected to be €1.1bn in 2011, rising to €1.6bn in 2015.
Shares were up 4.3% at 147.8p by 09:07.
BC
-
Thousands of Neil Woodford investors sue Hargreaves LansdownMore than 5,000 people who invested in Woodford's collapsed equity income product are taking Hargreaves Lansdown to court
-
Is now a good time to invest in gold?In the current market conditions, is gold a good investment? We explore the reasons why now might be a good time to put some money into gold.
