Feb 24, 2017
British Airways owner plans €500m share buyback
International Airlines Group reported a 9 per cent rise in operating profit for 2016, and announced a €500m share buyback, as the company disclosed a €460m hit to earnings mainly stemming from sterling's weakness after Brexit. Pre-tax profit rose 31 per cent to €2.4bn last year, on revenue down 1 per cent to €22.6bn. Free cash flow rose 39 per cent to €2.1bn last year. In Friday morning trading, IAG's shares rose 2 per cent to 515p. A core driver of IAG's performance in 2016 was how it benefited from a full year of earnings from Aer Lingus, which was bought in August 2015. Earnings at British Airways, IAG's largest airline, rose 18 per cent to €1.5bn last year, while profit at Iberia, the Spanish subsidiary, increased 23 per cent to €271m. However, earnings at Vueling, IAG's budget airline, fell 62 per cent to €60m after what the group called a "Difficult year" due to disruption, including air traffic control strikes. In the fourth quarter, IAG's pre-tax profit rose 141 per cent to €554m on revenues down 8 per cent to €5.3bn. The group increased capacity by 4.3 per cent during 2016, notably on routes to Asia and within Europe.
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