IAG upgrades long term targets and reshuffles BA boardroom

International Airlines Group has upgraded its long term profit margin, earnings and return-on-invested-capital guidance, along with several boardroom changes at British Airways.

The FTSE 100 airline group released the update to its long-term planning goals for 2016 to 2020 on Friday ahead of its capital markets day.

The company confirmed it was now targeting a return on invested capital in real terms of 15%, compared to 12% previously.

It also said it believed it can deliver an operating profit margin of 12% to 15% - previously the target compared to 10% to 14% previously.

The average earnings per share are expected to grow from at least 10% per annum to a minimum of 12% per year.

EBITDAR expectations have also been raised to approximately €5.6bn from €5bn.

Capex targets have dropped from between €2bn and €3bn to less than €2.5bn per annum, while equity free-cash flow will grow from between €1bn and €1.5bn annually to between €1.5bn and €2.5bn.

The company also announced a number of personnel changes, including Keith Williams retiring as executive chairman of British Airways in April to be replaced by Alex Cruz, currently chairman and chief executive officer of Vueling.

Nick Swift will step down as chief financial officer of British Airways at the same time. IAG Cargo chief executive Steve Gunning will take his place.

The announcements came as IAG revealed a 23.3% increase in the number of passengers carries in October compared to the same month in 2014.

Over 8.5bn people flew in the month on the group’s four airlines – British Airways, Aer Lingus, Iberia and Vueling.