IAG SWOT: Europe's leading legacy airline group hits milestones

Premium Analysis

For IAG 2019 is a milestone year. It marks the centenary of British Airways and the 15th anniversary of Vueling. The BA centenary is more accurately that of the forerunner company Aircraft Transport and Travel Limited (as bland a name as International Consolidated Airlines Group), which launched the world's first daily international scheduled service between London and Paris in Aug-1919. In addition, this year marks 50 years since the first flight of Concorde on 2-Mar-2019.

IAG is also hitting financial milestones. Its recently reported 2018 financial results demonstrate its continued leadership among European legacy airline groups for profit margins and return on invested capital. On both measures it improved for the sixth successive year, reaching an operating margin of 13.2% and a ROIC of 16.6%.

However, for BA this year's celebrations of past glories will be a reminder that, in spite of its much improved financial performance, its brand has lost some sheen since the days when it was Skytrax World Airline of the Year (as comparatively recently as 2006).

Vueling, too, has suffered brand dilution and will be anxious to raise its ROIC above IAG's target (it and Iberia remain stubbornly below this).

This report looks at IAG's strengths, weaknesses, opportunities and threats.

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