By Sarah Young
LONDON (Reuters) - British Airways owner IAG (L:ICAG) said most of its financial goals for 2019-2023 were the same as those made in a long-term plan last year, sticking to an upbeat target to post an operating profit margin of between 12 and 15 percent.
The group, which also owns Iberia, Aer Lingus and Vueling, issued a confident outlook on Friday despite a sharp rise in the oil price this year, as it continues to outshine rival European airlines Lufthansa (DE:LHAG) and Air France-KLM (PA:AIRF).
IAG gave guidance that average earnings per share would grow more than 12 percent per year from 2019 to 2023, in line with guidance it offered last year.
It raised its outlook for core annual earnings (EBITAR) to an average forecast of around 7.2 billion euros (£6.3 billion) from 6.5 billion euros.
Chief Executive Willie Walsh and other senior management will present the outlook to investors in London later on Friday.
Shares in IAG were up 2.3 percent to 632 pence at 0843 GMT, after climbing as much as 5 percent. The stock is at about the same level as it was a year ago, outperforming Lufthansa and Air France whose shares are both down by about a third in 12 months.
Liberum analyst Gerald Khoo gave his assessment of the outlook as "positive that the targets have gone up despite a tougher fuel cost environment, but a risk of greater scepticism on delivery as a result."
The price of jet fuel has climbed more than 30 percent compared to 12 months ago, according to the International Air Transport Association (IATA).
IAG said last week that for 2018 annual profit would increase by 200 million euros. That compared to Lufthansa's outlook for adjusted earnings (EBIT) this year to show a slight fall from 2017's record.
Air France-KLM has spent the year struggling with costly strikes before it finally agreed a pay deal with unions in October. It has faced tough competition from low-cost carriers like Ryanair (I:RYA) and easyJet (L:EZJ), as have IAG and Lufthansa, but Air France has been unable to overhaul costs and services the way IAG and Lufthansa have.
In its outlook, IAG raised its forecast for capital expenditure to 2.6 billion euros a year from 2.1 billion a year, and said it would grow available seat kilometres, a measure of capacity, by 6 percent a year, up from 5 percent previously.
It gave no further details on the capacity growth, which will include its fast-growing low-cost long-haul carrier Level and Level's new short-haul operation based at Vienna.
IAG did not provide an update on its plans with regard to Norwegian (OL:NWC), the carrier which rejected two IAG takeover approaches this year.