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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.

IAG GROUP OCTOBER 2013 - GROUP TRAFFIC AND CAPACITY STATISTICS

§ In October 2013, Group traffic measured in Revenue Passenger Kilometres increased by 8.9 per cent versus October 2012 (up 1.1 per cent on a pro-forma basis); Group capacity measured in Available Seat Kilometres rose by 8.0 per cent (down 0.1 per cent on a pro-forma basis).

§ Group premium traffic for the month of October increased by 4.0 per cent compared to the previous year, on falling capacity.

§ For current outlook please see Quarter Three results presentation.


8 November 2013



STRATEGIC DEVELOPMENTS

On 29 October, Qatar Airways joined oneworld, becoming the first major Gulf carrier to join a global airline alliance. British Airways was its sponsor into the alliance. The airline serves more than 130 destinations in 70 countries. The addition of Qatar Airways to oneworld enhances the alliance's network and product offerings in one of the world's fastest growing regions for air travel demand.

British Airways announced that its hand-baggage only and new semi-flex fare options are now available across its short-haul network of more than 90 destinations.

On 15 October, Iberia unveiled its new corporate image as part of its transformation plan which aims to reshape the company into a modern, competitive and trend-setting airline. In mid-November Iberia will start to operate its fifth Airbus A330, which will be the first with the new livery in place.

Vueling will offer seven new destinations from Barcelona-El Prat airport in the summer 2014 season: Dakar, Warsaw, Leipzig, Budapest, Belgrade and Porto and Jerez. With these new routes, Vueling will have a total of 111 destinations from Barcelona to Europe, North Africa and Middle East.

Davy Research Outperform 370.05 349.00 - - Reiterates

Prime Markets Buy 367.40 349.00 385.00 385.00 Reiterates

Excellent gap up - £4 beckons.

Well done skinny - another choo, choo I've missed.:-)

Deutsche Bank Buy 384.20 384.20 400.00 430.00 Reiterates

HSBC Overweight 384.20 384.20 420.00 420.00 Reiterates

Directorate Change

IAG BOARD CHANGE

International Consolidated Airlines Group (IAG) is announcing that John Snow has notified his intention to resign as a director at the next IAG Board meeting on December 19, 2013.

The Board's Nominations Committee has proposed the appointment of Dame Marjorie Scardino as an independent non-executive director and this will be submitted for approval at the next Board meeting.

ends

INTERNATIONAL AIRLINES GROUP CAPITAL MARKETS DAY

At its Capital Markets Day today (November 15, 2013) IAG will update the market with the following information:

· IAG is targeting a €1.8 billion operating profit in 2015, up from €1.6 billion through:

o Impact of Vueling integration and performance

o Improved margins in British Airways increasing the 2015 operating profit target from £1.1 billion to £1.3 billion

o Iberia recovery plan on track with improvement expected

o Additional contribution coming from British Airways and Vueling growth


· Aiming for a level of EPS ≥ €0.54 (RoIC ≥ 12 per cent)

· Keeping 2015 leverage at around 55 per cent (pre IAS19)

· Heading for a business model that could sustain organic growth levels of 2-3 per cent (excluding Vueling) beyond 2015

o Assuming capex of €2.0 - €2.2 billion per year

o Providing market level returns for our shareholders


The presentations from the Capital Markets Day can be accessed via www.iairgroup.com and a webcast of the event will be available today from 0900 GMT/1000 CET.

IAG ups 2015 profit target on British Airways growth, Iberia recovery

(Reuters) - International Airlines Group on Friday raised its 2015 operating profit target by 12.5 percent, due to expected growth from British Airways (BA) and Vueling and the recovery of Iberia.

IAG, which owns the three airlines, raised its 2015 operating profit target to 1.8 billion euros ($2.42 billion) from 1.6 billion euros due to the expected impact of integrating Spanish budget carrier Vueling, which it took control of earlier this year, improved margins at BA and a recovery at Iberia.

Prior to Friday's statement the airline group is expected to report an average 2015 operating profit of 1.63 billion euros, according to Thomson Reuters data.

Credit Suisse Outperform 366.85 362.20 443.00 443.00 Reiterates

Nomura Buy 366.85 362.20 335.00 380.00 Retains

Jefferies International Buy 362.80 362.80 - 410.00 Retains

Nice chart skinny.

Making new highs this morning - 394.80p

New high and 4 quid @402.40p

New high @405.80p

New high @416.30p

International Cons Airlines Group Traffic Statistics December 2013

-- In December 2013, Group traffic measured in Revenue Passenger Kilometres increased by 10.6 per cent versus December 2012 (up 3.6 per cent on a pro-forma basis); Group capacity measured in Available Seat Kilometres rose by 9.1 per cent (up 1.9 per cent on a pro-forma basis).

-- Group premium traffic for the month of December increased by 7.3 per cent compared to the previous year, with a greater increase in load factor than that experienced in the non-premium cabin.

-- Underlying market conditions remain unchanged from those described at the publication of Capital Markets Day and Quarter Three results.

7 January 2014

STRATEGIC DEVELOPMENTS

On 2 December, Iberia announced that it has completed the reorganisation of its management team as part of its restructuring plan. The total number of management positions has been reduced by 48 per cent from 399 to 208. In addition, Iberia announced the reduction of the minimum connecting time between its flights at Terminal 4 in Madrid- Barajas airport enabling an additional 1,200 flight connections to be made each week.

On 10 December, British Airways announced that it is extending the number of routes operated by its new A380 and 787 fleets. The A380 will start services to Washington DC from September 2014, having already announced it will operate to Johannesburg in February 2014. The aircraft is already flying to Los Angeles and Hong Kong. The 787s will be operated on flights to Hyderabad from March, Chengdu from May, Philadelphia from June and Calgary from July 2014.

British Airways cancelled around 200 flights on 7 December, due to a technical failure at UK NATS (National Air Traffic Services).

Certain information included in these statements is forward-looking and involves risks and uncertainties that could cause actual results to differ materially from those expressed or implied by the forward-looking statements.

Forward-looking statements include, without limitation, projections relating to results of operations and financial conditions and International Consolidated Airlines Group S.A. (the 'Group') plans and objectives for future operations, including, without limitation, discussions of the Group's Business Plan, expected future revenues, financing plans and expected expenditures and divestments. All forward-looking statements in this report are based upon information known to the Group on the date of this report. The Group undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

It is not reasonably possible to itemise all of the many factors and specific events that could cause the Group's forward-looking statements to be incorrect or that could otherwise have a material adverse effect on the future operations or results of an airline operating in the global economy. Further information on the primary risks of the business and the risk management process of the Group is given in the Annual Report and Accounts 2012; this document is available on www.iagshares.com.

Making new highs again today.

Credit Suisse Outperform 434.40 443.00 443.00 Reiterates

IBERIA REACHES LANDMARK AGREEMENT WITH PILOTS' UNION

International Airlines Group (IAG) announces today that Iberia has reached agreement in principle with its pilots' union, SEPLA, to introduce permanent structural change and improve the airline's viability. It also heralds a new positive working relationship between Iberia and SEPLA after years of conflict.

This landmark agreement provides a strong foundation to put Iberia on the path towards sustainable profitable growth - the more positive of the two scenarios outlined at IAG's Capital Markets Day in November 2013. It will also enable Iberia to become more competitive and reduce its cost base.

The main impacts of the agreement are:

· Fundamental productivity improvements within Iberia.

· Salaries to remain frozen until 2015 as outlined in the Mediation Agreement. After that date, increases will be subject to the airline's profitability.

· The Mediation Agreement provided a 14 per cent salary reduction for pilots and an additional 4 per cent cut linked to the productivity agreement. With these productivity improvements, the 4 per cent will be returned.

· Facilitates the growth of Iberia and Iberia Express.

Luis Gallego, Iberia's executive chairman, said: "I would like to thank the efforts made by SEPLA, the pilots and Iberia's management team who worked together to reach this agreement. This groundbreaking deal reduces the cost structure and provides the foundation for the airline to grow profitably. A strong and profitable Iberia can protect jobs in the long term and boost tourism which is a key driver in Barajas and Spain's economic recovery.

"Iberia is the natural airline choice for Latin America and this agreement will enable it to be a formidable competitor and build on its new brand, providing customers with great service and an extensive network.

"This agreement also enables the growth of Iberia Express with a competitive cost base and provides promotion opportunities for current Iberia and Iberia Express first officers. Iberia Express will help make Iberia profitable and stronger, by providing short haul feed, and will provide Spanish competition to low cost carriers".

Willie Walsh, IAG's chief executive said: "'Luis Gallego, his team and SEPLA deserve congratulations for striking a bold deal that will mark the turning point in Iberia's future. Luis has deservedly won the respect of the industry, his colleagues and the trade unions. Permanent structural change was the only way to save Iberia from slow decline. This agreement marks the beginning of its future".

This agreement in principle is subject to the approval of SEPLA's general assembly.

Deutsche Bank Buy 442.00 442.00 430.00 506.00 Reiterates