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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.

3rd Quarter Results.

International Airlines Group today (November 4) presented Group results for the three and nine months ended September 30, 2011. In addition, IAG presented combined results for the nine months ended September 30, 2011 including Iberia's first 21 days of January.

IAG period highlights on combined results:

Third quarter operating profit of 363 million, before exceptional items (2010: 528 million)

Operating profit for the nine months to September 30, 2011 of 451 million, before exceptional items (2010: 219 million)

Profit before tax for the nine months of 355 million after exceptional items (2010: 63 million)

Revenue for the nine months up 11.6 per cent to 12,263 million (2010: 10,986 million), including 146 million or 1.3 per cent of adverse currency translation

Passenger unit revenue for the nine months up 4.1 per cent (6.7 per cent at constant currency), on top of capacity increases of 7.7 per cent

Fuel costs for the nine months up 28.5 per cent to 3,751 million, before exceptional items (2010: 2,919 million)

Other operating costs up 2.7 per cent at 8,061 million, before exceptional items, including 122 million or 1.0 per cent of favourable currency translation. Non fuel unit costs down 4.7 per cent, or 3.4 per cent at constant currency

Cash down 200 million to 4,152 million (December 2010: 4,352 million)

Group net debt down 293 million to 602 million (December 2010: 895 million)

IAG AND LUFTHANSA AGREEMENT IN PRINCIPLE ON BMI

RNS Number : 5082R

International Cons Airlines Group

04 November 2011

IAG AND LUFTHANSA REACH AGREEMENT IN PRINCIPLE ON THE SALE OF BRITISH MIDLAND LTD

International Airlines Group (IAG) and Deutsche Lufthansa AG (Lufthansa) have today reached an agreement in principle for the sale of British Midland Ltd (BMI) to IAG.

The sale and closing of the deal remain subject to conditions including a binding purchase agreement, further due diligence and regulatory clearances. It is envisaged that the purchase agreement will be signed in the coming weeks and the aim is for the transaction to be completed in the first quarter of 2012.

ends

INTERNATIONAL AIRLINES GROUP CAPITAL MARKETS DAY

At its inaugural Capital Markets Day today (November 11, 2011) IAG will release the following new financial information to the market:

An operating profit target of around 1.5 billion in 2015 achieved through an increase from 400 million to 450 million in annual synergy targets from year five, structural profit improvements of 400 million plus organic growth of 150 million.

Specific areas of financial benefit including the creation of Iberia Express (at least 100 million), hub improvements at Madrid Barajas (at least 100 million).

From a 2010 base, we expect the optimisation of the transatlantic joint business with American Airlines to deliver at least 150 million.

Planned capital expenditure programme of 1.1 billion in 2011, 1.6 billion in 2012, 2.0 billion in 2013, 1.35 billion in 2014, 1.6 billion in 2015.

Cost efficiency gains from the introduction of new aircraft into the fleet of around 250 million.

Organic capacity growth rate of 2.5 per cent per annum up to 2015.

EU emissions trading costs of 90 million in year one of the scheme at current
carbon prices.

View into 2012: at todays spot fuel price, we would expect around 14% growth in unit fuel costs; we expect unit costs ex-fuel to be flat; we plan to grow capacity by 2.5%.

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This won't be helping today - Iberia pilots to vote on strike over new airline

Nov 22 (Reuters) - The pilots and crew of Spanish air carrier Iberia will decide on Nov. 30 whether to take strike action against the company's plans to launch a low-cost carrier with new, and cheaper, personnel, a union spokesman said.

American Airlines files for Chapter 11 protection

American Airlines' parent company AMR Corporation has filed for Chapter 11 bankruptcy protection in an attempt to cut debt and reduce labour costs.

The company expects the airline to continue to operate as normal throughout the bankruptcy process.

BINDING AGREEMENT FOR BMI PURCHASE

Following the announcement on November 4, 2011, International Airlines Group (IAG) and Deutsche Lufthansa AG (Lufthansa) have today reached a binding agreement for IAG to acquire British Midland Limited (bmi). The cost is £172.5 million in cash though the price is subject to significant reductions. bmi consists of three distinct business units - bmi mainline, bmi regional and bmibaby.

Transaction highlights:

· Acquisition of bmi for £172.5million in cash
· IAG's Heathrow slot portfolio to increase by up to 56 additional daily slot pairs
· Lufthansa to take on bmi's defined benefit pension scheme
· Lufthansa has the option to sell bmi regional and bmibaby before completion
· Significant price reduction if Lufthansa does not opt to sell bmibaby before completion
· Deal subject to competition clearance
· Earnings per share (EPS) accretive by 2014 at the latest
· 2015 operating profit target of €1.5 billion to increase by more than €100 million with consequent increase in EPS
· Underpins goal of 12 per cent return on capital employed by 2015
· Restructuring costs spread over three years and significantly lower in total than bmi's current annual losses

Finally showing some upside and near October highs.

Nomura reiterates Buy TP 265.00p

IAG Jan traffic up 1.1 percent

(Reuters) - International Airlines Group, formed by the merger of BA and Iberia, posted a small rise in traffic in January, boosted by strong growth in first and business class passengers.

Traffic, measured in revenue passenger kilometres (RPK), rose by 1.1 percent versus January 2011, while passenger load factor -- a measure of how well it fills its planes -- was up 200 basis points at 75.7 percent, it said on Friday.

IAG said its first and business-class travel -- the most profitable part of its passenger business - rose 3.8 percent, while non-premium traffic was up 0.7 percent.

Final Results.

FULL YEAR RESULTS ANNOUNCEMENT

International Airlines Group today (February 29, 2012) presented Group consolidated results for the year ended December 31, 2011. In addition, IAG presented combined results for the year ended December 31, 2011 including Iberia's first 21 days of January.

IAG period highlights on combined results:
· Fourth quarter operating profit of €34 million, before exceptional items (2010: €6 million)
· Operating profit for the year to December 31, 2011 of €485 million, before exceptional items (2010: €225 million)
· Profit before tax for the year of €503 million after exceptional items (2010: €84 million)
· Revenue for the year up 10.4 per cent to €16,339 million (2010: €14,798 million), including €317 million or 2.1 per cent of adverse currency impact
· Passenger unit revenue for the year up 3.6 per cent (5.8 per cent at constant currency), on top of capacity increases of 7.1 per cent
· Fuel costs for the year up 29.7 per cent to €5,068 million, before exceptional items (2010: €3,907 million), fuel unit costs were up 21.4 per cent
· Other operating costs up 1.1 per cent at €10,786 million, before exceptional items, including €165 million or 1.5 per cent of favourable currency impact. Non-fuel unit costs down 5.6 per cent, or 4.1 per cent at constant currency
· Cash down €617 million for the year to €3,735 million
· Group net debt up €253 million in the year to €1,148 million

Announced after Friday's close - REGULATORY APPROVAL FOR BMI DEAL

The European Commission (EC) has today given regulatory approval for International Airlines Group's purchase of bmi from Lufthansa.

Some technical conditions need to be finalised before completion, which is anticipated to take place around April 20, 2012. Following completion, it is intended that bmi mainline will be integrated into British Airways during the coming months.

IAG has offered the following commitments to the EC as part of the regulatory process:

· Seven daily slot pairs to be used between Heathrow and either Edinburgh and/or Aberdeen.
· Five daily slot pairs to be used between Heathrow and the following destinations - Nice, Cairo, Riyadh, Moscow, Edinburgh and/or Aberdeen.
· Two Heathrow daily slot pairs will be leased to Transaero for use on flights to Moscow.
· Other airlines can apply for seats on the integrated BA/bmi short and midhaul network for their transfer passengers, on normal commercial terms.

merger with Iberia beginning to look like a big mistake by "willie wanker".

BA fuel surcharge fine cut by OFT to £58.5m

The Office of Fair Trading (OFT) has sharply reduced a fine imposed on British Airways for price-fixing.

The original fine, imposed in 2007, was £121.5m, but the OFT has reduced that to £58.5m.

BMI DEAL COMPLETED

International Airlines Group (IAG) has completed the purchase of bmi from Lufthansa.

It is planned that bmi mainline will be integrated into British Airways and consultation has begun already with bmi mainline staff and their trade unions.

bmibaby and bmi regional have not been sold prior to completion. Under the terms of the purchase agreement, IAG will also acquire these businesses and receive a significant price reduction.

As previously stated, bmibaby and bmi regional are not part of IAG's long term plans and will not be integrated into British Airways. IAG will pursue options to exit these businesses and more details will be provided in due course. The costs associated with exiting these businesses, including the impact of operating them in the short term, are expected to be offset by the price reduction.

IAG will update investors about the bmi integration plan at its Q1 results on May 11, 2012.


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Credit Suisse Upgrades to Outperform TP 195.00.

RNS Number : 0646D

International Cons Airlines Group

10 May 2012

BMI REGIONAL SALE

International Airlines Group (IAG) has signed a binding agreement to sell bmi Regional to Sector Aviation Holdings Ltd (SAH) for a total consideration of GBP8 million in cash. The sale includes all bmi Regional's fixed assets and long-term liabilities, including owned and operating lease aircraft.

bmi Regional operates a fleet of 18 Embraer regional jets on scheduled services throughout the UK and Northern Europe.

The sale is conditional upon CAA approval and it is anticipated that ownership will be transferred to SAH within two weeks.

IAG chief executive Willie Walsh said: "This deal provides a future for bmi Regional and should secure around 330 jobs".

Sector Aviation is a consortium of businessmen with considerable aviation experience including the team previously referred to as Granite Aviation, led by Ian Woodley. The business is being funded by Stephen and Peter Bond who are also investors in Loganair.

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1st Quarter Results.

IAG period highlights on combined results:

· First quarter operating loss of €249 million, before exceptional items (2011: €102 million loss)

· Loss before tax for the quarter of €263 million (2011: €47 million loss)

· Revenue for the quarter up 7.8 per cent to €3,919 million (2011: €3,636 million), including €40 million or 1.1 per cent of favourable currency impact

· Passenger unit revenue for the quarter up 8.5 per cent (7.3 per cent at constant currency), on top of capacity increases of 0.6 per cent

· Fuel costs for the quarter up 24.9 per cent to €1,409 million (2011: €1,128 million), fuel unit costs were up 24.0 per cent

· Non-fuel costs before exceptional items for the quarter up 5.7 per cent at €2,759 million, including €32 million or 1.2 per cent of adverse currency impact. Non-fuel unit costs up 5.1 per cent, or 3.7 per cent at constant currency

· Cash of €3,574 million at quarter end was down €161 million

· Group net debt down €19 million in the quarter to €1,129 million

Chairman's Statement

INTERNATIONAL AIRLINES GROUP

JUNE 2012 - GROUP TRAFFIC AND CAPACITY STATISTICS


§ In June 2012, Group traffic measured in Revenue Passenger Kilometres rose by 8.9 per cent versus June 2011 (up 5.9 per cent on a like for like basis); Group capacity measured in Available Seat Kilometres was up 5.8 per cent (up 2.6 per cent on a like for like basis).

§ Group premium traffic for the month of June grew by 5.3 per cent compared to the previous year, with 9.6 per cent growth in non-premium traffic.

§ Underlying market conditions remain unchanged from last month. As we had indicated earlier in the year there is likely to be some near-term softness in premium traffic due to the Olympic Games.