IAG Lifts Profit Targets, Names Cruz to Head British Airways
IAG raised earnings targets covering the next five years and promoted Alex Cruz, head of its low-cost Vueling arm, to chief executive officer at the main British Airways brand. The stock rose as much as 4.4 per cent.
Europe's third-biggest airline is targeting an operating profit equivalent to 12 to 15 per cent of sales for the 2016-2020 period, up from a previous range of 10 to 14 per cent, it said in a statement today. Cruz replaces Keith Williams as BA chief, with Steve Gunning, head of IAG Cargo, taking over from Nick Swift as the unit’s finance chief.
IAG, as International Consolidated Airlines Group is known, has swelled to four brands with the €1.4 billion takeover of Aer Lingus Group, and also includes Spanish market leader Iberia. Barcelona-based Vueling helped make Cruz’s reputation by fending off Ryanair Holdings and EasyJet, Europe’s biggest discounters.
“Vueling has become a dynamic, innovative and cost- effective airline and Alex will bring new experience and insight to British Airways,” IAG CEO Willie Walsh (pictured) said in the statement. Gunning “has been highly effective in setting up IAG’s first ever single business unit at IAG Cargo,” the executive added.
IAG also will also target a return on invested capital of 15 percent over the next five years, compared with a previous target of 12 percent. It also lifted the target for earnings per share by two percentage points to 12 percent.
News by Bloomberg, edited by Hospitality Ireland