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British Airways parent IAG drops after MSCI announcement

posted onFebruary 26, 2019

Shares of British Airways and Iberia owner International Consolidated Airlines Group S.A. (IAG) fell by more than 3 percent on Tuesday (Feb.26) after US-based index provider MSCI decided to delete the company's stock from its Spanish index effective March 1.

Shares in UK-headquartered, Spanish registered IAG trade both in London and Madrid. The Spanish listing dropped 3.3 percent by 0821 GMT, at the bottom of the IBEX while shares on London's FTSE plunged by 3.8 percent after MSCI's announcement. 

Traders said the deletion was due to the cap on foreign ownership of the shares,  announced by the company on February 11 in anticipation of Britain's exit from the European Union. London's departure from the bloc is currently timetabled for March 29. 

(Graph Source: IAG)

British Airways stock

Under the cap, the permitted maximum level of share ownership by non-EU persons will be fixed at 47.5%, a measure for which the timeframe was unspecified.

“On 11 February 2019, the  share register of International Consolidated Airlines Group, S.A. shows that ownership of the Company’s issued shares by  Relevant Non-EU Persons has reached 47.5 per cent. IAG’s Board has decided  that, due to the level of share ownership by Relevant Non-EU Persons, it is necessary to specify a maximum aggregate number of Relevant Non-EU Shares under  Article 11.8(b) of the Company’s bylaws. IAG confirms that the  Permitted Maximum of Relevant Non-EU Shares shall be fixed at 47.5 per cent. There can be no assurance as to when, or if, the  Permitted Maximum will be removed” IAG said in a statement.

British Airways  is one of the world's leading global premium airlines and the largest international carrier in the UK. It has its home base at London Heathrow, the world's busiest international airport, flies to more than 200 destinations in 75 countries across the globe and carries up to 145,000 customers every day and 45 million customers a year 

The airline currently has a fleet of more than 280 aircraft, approximately 45,000 employees, including 16,500 cabin crew and 3,900 pilots.  By 2020 it will have received 100 new aircraft in less than a decade. 

Brirish Airways can trace its origins back to the birth of civil aviation and will celebrate its 100th anniversary on 25 August, 2019.