British Airways and Iberia operator International Consolidated Airlines (IAG) is on course to increase profitability in 2017 despite tough aviation markets, says chief executive Willie Walsh.
Resilient performance in the third quarter of 2016 and a reiteration of previous guidance from Walsh on operating profit, which is expected to increase to €2.5bn (£2.2bn) next year, impresses analysts and investors.
IAG is among only a handful of gainers on London's blue chip index in early deals, gaining 3.1% to 426p.
'IAG has traded well through a difficult period which included stiff currency headwinds, air traffic control strikes and the Brexit vote,' writes Robin Byde at investment bank Cantor Fitzgerald.
'Passenger growth was healthy and fuel costs sharply lower, this helped to offset weak yields. We think that consensus for 2016 and 2017 is unlikely to change with these results. Investors and analysts will be keen to hear more about IAG's strategy and future growth prospects at its Capital Markets Day on 4 November.'
THIRD QUARTER TRADING
Operating profit before exceptional items was €1.2bn in IAG's third quarter of 2016 taking year-to-date profitability to €1.9bn in an industry where earnings are always second-half weighted.
'While strong, these results were affected by a tough operating environment with a very significant negative currency impact of €162m, primarily due to sterling weakness and continued disruption due to air traffic control strikes.'
