Shares in International Consolidated Airlines Group SA (LSE:IAG), owner of British Airways and Iberia, fell back 8% on quarterly results, having earlier this week reached their highest altitude since Covid.
The FTSE 100 group reported a slightly weaker-than-expected third quarter as currency movements and softer pricing weighed on revenue, with management promising to update on shareholder returns alongside February's results.
Deutsche Bank analysts said it was a "solid" update in spite of "some headwinds in the operating environment", putting it on track for best-in-class operating margins around 15% this year.
Also noted was a "positive" deal with SpaceX's Starlink to provide in-flight Wi-Fi across all carriers the day before.
The profit taking in the shares, they said, was reflective of "no beat and raise this time around and patience needed on the buyback".
IAG shares had risen around 40% since the start of the year, trading on 6.5x forecast earnings.
Peel Hunt expects at least €3 billion of further shareholder returns when results are released in February, likely through share buybacks on top of a dividend.
The broker said IAG remained on track for another year of strong profits and shareholder returns.
Total revenue was flat year-on-year at €9.33 billion, just below forecasts, while operating profit rose 2% to €2.05 billion. Passenger revenue slipped 0.1% to €8.26 billion, held back by a lower load factor and weaker yield per seat.
Peel Hunt said the drag from foreign exchange was the key factor, with passenger revenue per available seat kilometre, aka PRASK, down 2.4% year-on-year, but only 0.3% lower at constant currency.
The broker expects little change to forecasts, noting IAG’s unchanged full-year outlook and guidance for 2.5% capacity growth, fuel costs of €7.1 billion and capital expenditure of €3.7 billion.