British Airways and Iberia parent International Airlines Group (IAG) has set itself an operating profit target of €1.5 billion ($2 billion) in 2015 through a mix of higher synergy targets, structural profit improvements and organic growth.
IAG outlined its long-term profit target at its first capital markets day today. The group recorded an operating profit of €225 million last year and hopes to roughly double this in 2011. But it plans to build on this to reach operating profits of €1.5 billion by 2015.
This will be driven by structural profit improvements of €400 million, raising its synergies target €50 million to reach €450 million from year five, and organic growth of €150 million. It sees annual organic capacity growth of 2.5% over this period.
"Specific areas of financial benefit including the creation of Iberia Express (at least €100 million), hub improvements at Madrid Barajas (at least €100 million)," the company said. "From a 2010 base, we expect the optimisation of the transatlantic joint business with American Airlines to deliver at least €150 million."
The group also said it envisages around €250 million in cost efficiency gains from the introduction of new aircraft, but estimated EU emissions trading scheme costs of €90 million in year one and its unit fuel costs to rise 14% next year.
Source: Air Transport Intelligence news
