IAG results

British Airways owner IAG has come out with a fine set of provisional results raising its 2015 profit forecast by more than 20%, and outperforming its struggling continental rivals.  For 2014 it reported operating profit up 81% to €1.39bn.

It now expects 2015 operating profit in excess of €2.2bn, compared to the €1.8bn forecast.  The airline played down the role that falling fuel prices played in the results noting that Iberia’s “turnaround has been remarkable”.  British Airways’ operating profit increased to €1,215m up from €762m last year.  Vueling made an operating profit of €141m, compared to an operating profit of €139m in 2013.  “The airline is focusing on flexible growth,” says IAG.

No mention of promised dividends at this stage. 

BA/IAG has never paid out in Willie Walsh's 10-year tenure and long-term shareholders now have the dilemma of cashing in at the current all-time high of 580p, paying the profit tax and investing elsewhere, or taking the dividend when it comes round.  The City will always take a short-term view.

The Irish Government last week rebuffed IAG's €1.4bn bid for Aer Lingus, arguing that it would need more assurances regarding jobs and growth plans before committing to the deal.   www.iairgroup.com

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