British Airways Parent IAG Lowers Medium-Term Profit Forecast, Reins In Capacity Growth

International Airlines Group (IAG.L), the owner of British Airways and Spain’s Iberia, cut its profit forecast and said it plans to curb capacity growth through 2020 after the drop in the value of the pound hurt demand for its flights among British travelers.

Earnings before interest, tax, depreciation, amortization and aircraft rental, or EBITDAR, a profitability measure in the airlines industry, will be about 5.3 billion euros on average per year between now and 2020 compared with an earlier estimate of 5.6 billion euros per year, the company, which also owns Irish carrier Aer Lingus and Vueling of Spain, said in a statement on Friday.

The airline operator, through, reiterated its target for earnings per share growth of 12% per year. Capital expenditure will average 1.7 billion a year after previously targeting less than 2.5 billion euros a year. Available seat kilometers, a capacity measure in the airline industry, will grow 3% a year on average rather than an earlier predicted range of between 3% and 4%.

IAG also said on Friday that its airlines carried 8.8 million passengers in October, 3.9% more than a year earlier. They carried 6.6% more passengers this October than last year in both Europe and the Asia Pacific region. Traffic fell in Latin America and in Africa and the Middle East.

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