CORPORATE STRATEGY

International Airlines Group

International Airlines Group

Introduction

The study relates to International Airlines Group, which aims to analyze the business environment of IAG and the reasons why merger with Iberia and British Airways took place. Moreover, the study also evaluates the success and analysis of the strategies which is reflected in the financial performance of IAG. Besides it, in view of existing business environment, the report also analyzes and evaluates potential future strategies for International Airlines Group.

Company

International Airlines Group is an international scheduled airline group which is based in the UK. International Airlines Group works on the wide-ranging networks of scheduling of international flights together with its franchise partners and code share; moreover, the worldwide flying destinations of the airline are more than 300. The group is involved in the domestic and international scheduling of air services operation for the carriage of the provision of ancillary services, mail and freight and also the passengers. In addition to this, company is also engaged in air cargo business at several parts of the world along with its passenger services. The key business area of the group is London with significant existence at London City, Gatwick and Heathrow.

Key Financials

(In EUR as of 12/ 31/ 2011) Income Statement

Revenue

16,103 m

Net Income

562 m

EPS - Net Income - Diluted

0.30

Revenue per Share

8.91

Balance Sheet

Total Assets

19,753 m

Total Liabilities

14,367 m

Shareholders' Equity

5,386 m

Total Assets per Share

10.65

Net Assets per Share

2.90

Cash Flows

Cash from Operations

770 m

Cash from Investing

601 m

Cash from Financing

- 369 m

Cash Flow per Share

0.38

From the above table, it can be observed that the financial performance of International Airlines Group presents that the majority part of assets is consist of liabilities as compared to equity. The reason of this statement is that the total liabilities are 14367 million which is greater than the shareholders equity of 5386 million, which is a positive aspect for the company because the long-term and the short term debts of International Airlines Group are constant. Moreover, the equity of IAG does not seem to be in good condition as liabilities are high. In addition to this, the per share net assets and per share total assets indicate that the assets structure of International Airlines Group's is in satisfactory condition which reflects that the IAG can fulfill its financial liabilities, in case of financial distress. Furthermore, past researches present that the analysis of financial situation of companies are used to find out whether the company is facing the liquidity problems, the analysis of profitability shows the return on invested capital and analysis of related variables involved in the short term financing,.

Elements of the Business Environment

We can say that virtually no undertaking is completely isolated, because they operate in a market environment. This surrounding environment is largely influenced in different ways. This is the reason why International Airlines Group should carefully analyze its existing business environment in order to know its potential future strategies. Usually, a distinction is made between external and internal business environment. While the external environment is basically everything for imaginary boundaries company, and can say that these factors affect ...