IAG is soaring - but investors are still disappointed

The airline group reported healthy profits, but lagged behind analyst expectations.

by Rachel Savage
Credit: Airwolfhound
Credit: Airwolfhound

You reveal growing sales and healthy profits, report your latest mega acquisition is integrating nicely and even unveil your first dividend. Yet still your shares fall. What’s a CEO to do?

Such is life for International Airlines Group boss Willie Walsh this morning – not that the straight-talking, job-slashing Irishman will let it ruffle him. The owner of British Airways, Iberia and, since August, Aer Lingus, reported third quarter profits rose 38% to €1.25bn (£900m). But shares nonetheless dropped more than 4% to around 573p this morning.

It increased its full-year profit forecast from €2.2bn to €2.25bn-€2.3bn. But that didn’t impress analysts, who had predicted an average of €2.31bn. The markets may also be disappointed its third quarter earnings didn’t make even more hay from low oil prices. Yesterday, Air France-KLM and Lufthansa reported profits had trebled and risen 42% respectively, although both were lower than IAG’s.

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