British Airways owner IAG launches 1 billion euro share buyback

BRITISH Airways owner IAG launched a 1 billion euro (S$1.4 billion) share buyback plan on Friday (Feb 28) after it reported a 27 per cent jump in annual operating profit, beating market expectations.

The carrier reported adjusted operating profit of 4.44 billion euros, above analysts’ expectations from a company-compiled poll for 4.08 billion euros.

“These results highlight the... effectiveness of our strategy, underpinned by the successful execution of our transformation programme across the group,” CEO Luis Gallego said in a statement.

European airlines overall have struggled in the past year with spiralling costs and delivery delays.

IAG, which also owns Spanish airlines Iberia and Vueling, said it was confident about delivering margins and returns as demand remained strong.

The company has outperformed its rivals over the past year as growth in its lucrative transatlantic routes took off, and the airline kept a lid on costs.

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In stark contrast to other European airline stocks, its shares have soared in that time as the group benefited from limited delivery delays, strong demand and resilience on its core transatlantic routes.

Lufthansa is more exposed to the tougher Asian market than IAG, where Chinese carriers are able to fly in Russian airspace, making their flights shorter and cheaper.

At Air France, the Paris Olympics caused international tourists to avoid the city and residents in France to postpone their holidays. REUTERS