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International Airlines Group (IAG) Fundamentals


International Consolidated Airlines Group, S.A., also known as International Airlines Group, is the name of an Anglo-Spanish holding company formed on 8 April 2010 as a result of the proposed merger between British Airways and Iberia.


The new company will be the third largest airline holding company in the world by revenue,with 419 aircraft transporting passengers between 200 destinations.The new company will carry over 62 million passengers per year, according to British Airways executives.Both airlines will, however, continue to operate under their current brand names. British Airways shareholders will take a 55% stake in the new company, while Iberia shareholders will own the remaining 45% stake.

Deutsche Bank Buy 0.00 317.00 330.00 360.00 Reiterates

HSBC Overweight 318.55 317.00 350.00 375.00 Reiterates

Credit Suisse Outperform 318.55 317.00 345.00 345.00 Reiterates

Citigroup Buy 326.70 326.70 300.00 380.00 Upgrades

Traffic Statistics July 2013M

JULY 2013 - IAG GROUP TRAFFIC AND CAPACITY STATISTICS


∙ In July 2013, Group traffic measured in Revenue Passenger Kilometres increased by 6.6 per cent versus July 2012 (down 2.8 per cent on a pro-forma basis); Group capacity measured in Available Seat Kilometres rose by 8.5 per cent (down 1.7 per cent on a pro-forma basis).

∙ Group premium traffic for the month of July increased by 0.4 per cent compared to the previous year, on falling capacity.

∙ Traffic in long haul is still influenced by the Group policy to improve unit revenues through yield, rather than load, as well as by the timing of Ramadan.

∙ Underlying market conditions remain unchanged from those described at the publication of Quarter Two results on 2 August.


6 August 2013

HSBC Overweight 0.00 323.40 375.00 375.00 Reiterates

Jefferies International Buy 323.40 323.40 - 355.00 Reiterates

Deutsche Bank Buy 320.60 320.60 360.00 360.00 Reiterates

Nomura Buy 320.60 320.60 283.00 335.00 Retains

Shorthaul fleet order

International Airlines Group (IAG) has secured firm orders and options for up to 220 Airbus A320 family shorthaul aircraft - up to 120 of these for its subsidiary Vueling. The new aircraft will enable the Barcelona-based airline to replace some of its existing A320 fleet and expand its business.

The Vueling agreement comprises 62 firm orders - 30 A320ceo and 32 A320neo - plus 58 options. The firm orders will be delivered to Vueling between 2015 and 2020.

In addition, IAG has secured 100 A320neo options which could be used for any of the airlines in the Group - British Airways, Iberia or Vueling - for aircraft replacement requirements.

Talk of a bid for Flyb.

Investec Hold 304.60 315.80 270.00 320.00 Downgrade

Cantor Fitzgerald Buy 303.10 299.40 290.00 360.00 Reiterates

Deutsche Bank Buy 302.55 360.00 360.00 Reiterates

Bank of America Merrill Lynch Buy 301.10 301.20 - 360.00 Reiterates

£500 payout if your flight is caught in weather chaos: Landmark court case opens door to millions of pounds of compensation claims dating back six years

Well, that doesn't sound much good for the SP does it?

No - I've twice been tempted to sell some @330p - looks like I may have a wait!

Deutsche Bank Buy 0.00 323.20 360.00 360.00 Reiterates

New multi year high @368.40p

RBC Capital Markets Outperform 364.30 360.00 400.00 Reiterates

Deutsche Bank Buy 357.20 364.00 - 360.00 Reiterates

Deutsche Bank Buy 353.90 353.90 360.00 400.00 Reiterates

3rd Quarter results

IAG period highlights on results:

· Third quarter operating profit €690 million (2012: €270 million) before exceptional items
· At constant currency, third quarter passenger unit revenue up 6.7 per cent (excluding Vueling 7.4 per cent) and non-fuel unit costs down 4.3 per cent (excluding Vueling up 0.6 per cent)
· Operating profit for the nine month period €657 million (2012: €17 million) before exceptional items
· Revenue for the nine month period up 3.9 per cent to €14,113 million
· Passenger unit revenue for the nine month period up 2.3 per cent (5.6 per cent at constant currency)
· Fuel costs for the nine month period down 3.4 per cent to €4,475 million (2012: €4,633 million). Fuel unit costs down 5.4 per cent at constant currency
· Non-fuel costs before exceptional items for the nine month period up 0.5 per cent at €8,981 million. Non-fuel unit costs down 3.5 per cent, down 1.1 per cent at constant currency
· Cash €3,740 million at September 30, 2013, up €831 million from December including €591 million of Vueling cash
· Adjusted gearing down 2 points to 49 per cent including Vuelin