Optimistic forecast prompts IAG share rise

Hotel News - 14/11/2011

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International Airlines Group said that it expected higher than previously forecasted profit figures for operations through 2015, raising the target to €1.5 billion (£1.3 billion). Officials said the firm would be able to boost savings to €450 million (£385 million) per year from €400 by combining its two carriers – BA and Iberia.

The company also said in the announcement that its transatlantic alliance with Texas-based American Airlines would amount to at least 150 million (£128 million).

IAG stock rose by more than 5 per cent on Friday on the news.

Meanwhile, Howard Wheeldon, an analyst from BGC Partners, said that the positive news comes as a result of strong marketing in the wake of industrial turmoil for BA in 2010. However he also said that the full effect from the global downturn had not yet been felt.

International Airlines Group was created in January as a result of the merger between Iberia and British Airways. The firm announced last week that it had put a bid in to Lufthansa to acquire UK-based BMI, which will allow IAG to take over an additional 10 per cent of overcrowded Heathrow airport’s precious few landing slots.

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