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British Airways owner ascends ladder of trade power

September 28, 2015 Business News, Headline News No Comments Print Print Email Email

egtmedia59Shrugging off pressure on airlines worldwide, British Airways owner International Airlines Group has climbed to the top of the FTSE 100, a vital British trade index.

The FTSE 100 is an index composed of the 100 largest companies listed on the London Stock Exchange (LSE). The companies are often referred to as “blue chip” companies, and the index is customarily viewed as a fairly accurate indication of the performance of major companies listed in Britain.

Bankers Morgan Stanley (as reported in the Guardian) said:

“IAG moves to our top overweight pick in the sector – we raise our forecasts 3%-12% and the price target moves [11% higher] to €10.00, leaving around 20% upside. Besides third quarter 2015 trading momentum we see further opportunities for synergies, costs, cash flow and product leverage to be presented at the capital markets day [6 November 2015].

The bank said four “interesting levers for upside” existed for IAG.

They were these:

  1. Aer Lingus: how IAG can capitalise on benefits of increased Atlantic exposure as well as potential rationalisation of short haul;
  2. Unit cost: there remains more scope for improved cost metrics particularly in BA short haul and group supplier consolidation;
  3. Free cashflow growth: helped by likely review of capital expenditure profiles at lower fuel price level
  4. Product enhancements: exploring expansion of the Avios [air miles currency] platform.

Edited by William Sykes

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