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International Consolidated Airlines Group

Shares in British Airways owner IAG fly higher as its ups long-term profit forecasts

IAG now expects underlying earnings to average €7.2bn per annum over the next five years, versus its previous forecasts of €6.5bn

british airways planes
IAG also upped its cost estimates

International Consolidated Airlines Group PLC (LON:IAG) shares flew higher on Friday morning after the British Airways owner upped its five-year profits forecasts.

At its Capital Markets Day today, IAG will tell analysts that it now expects underlying earnings (EBITDAR) to average €7.2bn per annum over the next five years.

READ: IAG sees annual profits €200mln up on last year

That’s ahead of last year’s five-year forecast when the group said it expected earnings to average €6.5bn a year.

To help push profits higher, IAG, which also owns Aer Lingus and Iberia, is now planning to increase capacity by 6% between now and 2023, compared to previous guidance of 5%.

That is likely the driving factor behind a hike in cost estimates, along with the recent rise in fuel prices. Net capex (capital expenditure) is now expected to average €2.6bn a year (previously €2.1bn).

The FTSE 100 group left margin guidance unchanged at between 12-15%, while it also still expects earnings per share to grow 12%+ over the coming five years.

IAG shares were up almost 2% to 630p in early deals on Friday.

Quick facts: International Consolidated Airlines Group

Price: £4.57

Market: LSE
Market Cap: £9.07 billion
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