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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.

Final Results

IAG period highlights on combined results:

· Operating loss for the year to December 31, 2012 of €23 million before exceptional items (2011: operating profit €485 million). After exceptional items operating loss for the year not including Iberia restructuring and impairment was €68 million, compared to our guidance in November of €120 million

· Before exceptional items, British Airways made an operating profit of €347 million in the year to December 31, 2012 and Iberia made an operating loss of €351 million

· Non-operating charges for the year were €384 million, including €266 million related to non-cash pensions accounting requirements

· Loss before tax for the year of €997 million (2011: profit before tax of €503 million), including restructuring charge of €202 million for the Iberia transformation plan and €343 million impairment of Iberia intangible assets

· Revenue for the year up 10.9 per cent to €18,117 million (2011: €16,339 million), including €872 million or 5.4 per cent currency impact. Passenger unit revenue for the year up 9.4 per cent, on top of volume increases of 2.8 per cent

· Fuel costs up 20.4 per cent to €6,101 million (2011: €5,068 million before exceptional items). Fuel unit costs up 16.8 per cent, or 8.4 per cent at constant currency

· Non-fuel costs before exceptional items, up 11.6 per cent at €12,039 million, including €543 million of adverse currency translation. Non-fuel unit costs up 8.5 per cent, or 3.8 per cent at constant currency

· Capital investment of €1,239 million (2011: €1,071 million) including over €400 million on pre-delivery payments for future aircraft

· Cash of €2,909 million at December 31, 2012 was down €826 million on 2011 year end (December 2011: €3,735 million). Group net debt up €741 million to €1,889 million (December 2011: €1,148 million)

International Cons Airlines Group Traffic Statistics February 2013

IAG FEBRUARY 2013 - GROUP TRAFFIC AND CAPACITY STATISTICS

-- In February 2013, Group traffic measured in Revenue Passenger Kilometres decreased by 2.4 per cent versus February 2012; Group capacity measured in Available Seat Kilometres was down 4.4 per cent.

-- Group premium traffic for the month of February grew by 0.2 per cent compared to the previous year, with a 2.9 per cent decrease in non-premium traffic.

-- In February, Iberia cabin crew and ground employees' unions went on strike for five consecutive days: Iberia operated approximately 64 per cent of its flights. At a Group level, capacity was impacted by approximately 0.8 per cent.

-- For current outlook and strategic developments please see Quarter Four results presentation.

IAG Statement on Iberia

The board of International Airlines Group (IAG) has met today in an extraordinary session to analyse and assess the proposal issued by a mediator regarding Iberia.

As a result, the board has decided to accept the proposal.

Tudela confident that Iberia unions accept their proposal

MADRID, Mar. 11 (AFP) -

The mediator in the conflict in Iberia, Gregory Tudela, said on Monday to be "optimistic" about the support of unions and Iberia to its proposal on Wednesday, the union had a majority expressed their acceptance to the document.

"I'm optimistic, there is reason to be," Tudela said in remarks to reporters after the meeting with the parties involved.

The mediator also hoped that the proposal "is the first step in harnessing the problems facing the company."

Tudela said that although "the company has expressed its support for the agreement and most unions were in favor, wait a couple of days" so they can hold consultations with members, because "it is an issue very complex. "

A reversal of fortunes seems to be under way - looking very strong today.

RNS Number : 9298Z

International Cons Airlines Group

13 March 2013

IAG UPDATE ON MEDIATOR PROPOSAL FOR IBERIA

International Airlines Group notes, further to its acceptance of the mediator's proposal regarding Iberia, that unions representing the majority of Iberia's employees have also agreed to accept the proposal.

ends

March 13, 2013

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 the Company's plans and objectives for future operations, including, without limitation, discussions of the Company'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 Company on the date of this report. The Company 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 Company'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 to the Company and its risk management process is given in the Annual Report and Accounts 2012; this document is available on www.iagshares.com.

Off to the races this morning!

Morgan Stanley Overweight 0.00 262.70 2.40 4.00 Upgrades


Which I assume means £4 from £2.40!

Morgan Stanley note today:
"Pleasingly, IAG has taken clear steps to address Iberia losses in recent weeks. In addition, we think there are multiple avenues of leverage from US, Latam and Heathrow positioning. Our OW is further supported by clear progress in the financing markets – de-risking the balance sheet for IAG.
There is more to play for in the near term: We are 25% ahead of the market on FY13 EBIT. Our €629m forecast compares to consensus of €504m. Market exposures are generally favourable (or at least controllable in the case of Spain) and global partnership momentum has increased materially – oneworld has gained around 400bp of market share with recent deals.
Multiple Aircraft Transactions YTD. Flight Global reported on March 8 that American Airlines raised $660m in the past week, secured at 4-5.6%. In addition, two major lessors (Air Lease and Aviation Capital) raised US$700m for 4.6-4.8%. Management (CEO and senior execs) incentivised to deliver 2014 earnings at 96% of the 2015 target level. Maximum vesting occurs if the group achieves €0.50 EPS in 2014, which compares to the 2015 target of €0.52.
Where could we be wrong? In addition to the usual airline caveats of fuel, FX and event risk, the primary IAG risks involve further weakening of Spanish macro trends, additional austerity or taxation shocks in the UK or Spain and potential execution delays of the Iberia restructuring plans.

Virgin appears to have financial issues so IAG may be suffering too.

Deutsche Bank Buy 270.30 270.50 330.00 330.00 Reiterates

Directorate Change

IBERIA CHIEF EXECUTIVE

International Airlines Group (IAG) and Rafael Sánchez-Lozano have decided by mutual agreement that he will step down as chief executive of Iberia and from the IAG board with immediate effect. He will be replaced by Luis Gallego who is currently chief executive of Iberia's subsidiary Iberia Express. Luis has joined the Iberia and IAG boards.

Tender offer for the shares of Vueling Airlines

PUBLIC TENDER OFFER FOR THE SHARES OF VUELING AIRLINES, S.A.


International Consolidated Airlines Group, S.A., in compliance with article 82 of Law 24/1988, of July 28, on the Securities Markets, hereby announces that its wholly-owned subsidiary, Veloz Holdco, S.L. (Sociedad Unipersonal) ("Veloz Holdco"), in relation with the tender offer it has launched for 100% shares of Vueling Airlines, S.A. ("Vueling") (the "Offer"), has resolved:

1. To increase the consideration offered in the Offer of 7 euros per share of Vueling to 9.25 euros per share.

2. To extend the Offer acceptance period from 39 to 48 calendar days.

3. To reduce the Offer's minimum acceptance condition from 90% of those Vueling voting rights not owned by Iberia to 1,244,029 Vueling shares, which represent 4.16% of Vueling's share capital.

Veloz Holdco will submit the documentation relating to the amended Offer with the Spanish National Securities Markets Commission (CNMV) for its authorisation on or before 3 April 2013.



27 March 2013

American Airlines and US Airways merger approved

The merger of the owner of American Airlines and US Airways has been approved by a US judge, moving the two companies one step closer to forming the world's largest carrier.

The deal had to be approved by the judge because American Airlines has been in bankruptcy protection since November 2011.

The merger was first announced in February.

It still needs approval by the Justice Department and US Airways shareholders.

They are expected to back the deal before the end of the year.

LONGHAUL FLEET ORDERS

International Airlines Group (IAG) has reached agreement with Boeing for new longhaul aircraft for the group's fleet.

IAG plans to convert 18 existing Boeing 787s options into firm orders for British Airways. They will be used to replace some of the airline's Boeing 747-400 aircraft between 2017 and 2021.

For Iberia, IAG has reached agreement with Boeing to secure commercial terms and delivery slots that could lead to an order for Boeing 787s. Firm orders will only be made when Iberia has restructured and reduced its cost base and is in a position grow profitably.

British Airways' 787s will be powered by Rolls-Royce Trent 1000 engines. The engine order includes a comprehensive maintenance package with total care agreement.

Willie Walsh, IAG chief executive, said: "British Airways has 24 Boeing 787s on order already and we plan to boost this by a further 18 aircraft by exercising our options.

"The aircraft offers a step change in fuel burn efficiency versus our existing aircraft with improvements in fuel cost per seat of more than 20 per cent. New technology engines and improved aerodynamics will lower fuel burn leading to reduced carbon and NOx emissions.

"The creation of IAG has resulted in greater buying power for both airlines through joint procurement and we have been able to obtain delivery slots for Iberia as part of British Airways' order".

British Airways has 118 wide-bodied longhaul aircraft in its fleet with 42 aircraft (12 A380s, 24 B787s, six B777-300ERs) already ordered.

Iberia has 31 wide-bodied longhaul aircraft in its fleet with six A330 aircraft already ordered.

The fleet order is subject to approval by IAG shareholders.

Airbus seen close to BA deal, adding pressure for Boeing revamp

PARIS | Sun Apr 7, 2013 10:21pm BST
(Reuters) - A potential $7 billion (4.5 billion pounds) order from British Airways for Airbus A350 jets is set to hand Boeing Co (BA.N) its next major challenge as it nears the end of a three-month crisis over the grounding of the 787 Dreamliner, analysts said.

If confirmed, the order would strike a blow inside one of Boeing's most loyal wide-body customers and may hike pressure on the U.S. planemaker to defend future profits by formally offering a revamped version of its successful 777 mini-jumbo.

Spain's Vueling accepts takeover bid from IAG

MADRID | Tue Apr 9, 2013 12:23pm EDT

(Reuters) - The board of Spanish low-cost airline Vueling (VULG.MC) on Tuesday unanimously recommended shareholders accept an improved takeover offer of 9.25 euros per share from International Airline Group (ICAG.L) (ICAG.MC).

IAG, which already owns 45.85 percent of Vueling as well as British Airways and Spanish airline Iberia, last month raised its bid by almost one third after the Barcelona-based carrier rejected a previous offer of 7 euros per share.

IAG chief says won't merge Spanish airline Vueling with Iberia

ABU DHABI | Wed Apr 10, 2013 12:52pm BST
(Reuters) - International Airline Group (ICAG.L) will not merge Spanish low-cost airline Vueling (VULG.MC) with its Iberia unit if its takeover bid is successful, IAG's chief executive Willie Walsh said on Wednesday.

The board of Vueling on Tuesday unanimously recommended shareholders accept an improved offer of 9.

Walsh said the profitable Vueling business will operate separately from loss-making Iberia after the takeover.

Dreamliner: Boeing 'may never find battery fault cause'

Boeing has admitted that it may never know what caused the battery malfunctions that resulted in all its 787 Dreamliner aircraft being grounded.

The admission came from Boeing's Larry Loftis, the general manager of the company's 787 division.

Replacement battery systems are now being fitted to all 50 Dreamliners that had been in operation with airlines around the world.

Boeing expects the planes to resume service in the coming weeks.

skinny doesn't it make passengers feel confident if the aircraft manufacturer doesn't know why components in its aircraft fail, steer clear.

Yes - its not very reassuring!