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Shares in British Airways' parent IAG fly lower as it predicts drop in 2019 free cash flow

Published: 12:20 04 Mar 2019 GMT

IAG
IAG declared a €700mln special dividend after a 9.5% rise in profit last year

Shares in British Airways owner International Consolidated Airlines Group PLC (LON:IAG) took a nose dive on Monday after saying 2019 free cash flow would be lower than last year.

IAG released a clarification on its outlook for the year following confusion during a call with analysts last Thursday after the airline group posted its full-year results.

READ: British Airways owner IAG declares €700mln special dividend as 2018 profits rise 9.5%

The confusion was due in part to the adoption of new accounting standards.

IAG said: “We expect equity free cash flow to be lower in 2019 than in 2018 based on our guidance of operating profit being similar in 2019 compared to 2018 and on an increase in net capital expenditure from €2.2bn in 2018 to €2.6-2.7bn in 2019.”

The company, which also owns the Aer Lingus, Iberia and Vueling airlines, declared a €700mln special dividend after a 9.5% rise in operating profit before exceptional items to €3.23bn last year.

For 2019, IAG expects flat operating profit before exceptional items, based on current fuel prices and exchange rates. Passenger unit revenue is expected to improve at constant currency and non-fuel unit cost is expected to be flat at constant currency.

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