British Airways owner IAG has pledged to reinstate its dividend for the first time since the pandemic, as the post-pandemic boom in travel refuses to let up.
In a statement this morning, the airline conglomerate said it was committed to dividends once its balance sheet and future investment plans are secured.
Outlining its medium-term targets ahead of a capital markets event, the IAG said it expects operating margins of between 12 to 15 per cent and maintained its outlook for the fiscal 2023 year.
Chief executive officer Luis Gallego said: “Our transformation and investment plans will drive a step change across our businesses, delivering efficiencies and a market-leading customer experience. Executing our strategy will enable us to deliver sustainable growth and returns for our shareholders.”
It marks the latest evidence that soaring pent-up demand for travel is not slowing, despite concerns of a cooldown over the typically quieter autumnal months.
Low-cost giant Ryanair announced plans for a maiden dividend in November after netting a record €2.18bn (£1.8bn) half-year profit. Rival Easyjet is also reinstating its dividend off the back of this summer’s travel bonanza.
Despite the positive update, shares in IAG fell nearly five per cent by late afternoon, continuing a trend across the sector as investors demand near-perfect results amid concerns over jet fuel costs and fresh conflict in the Middle East.
Speakers at the capital markets day will outline the group’s targets, which include €1.5bn in operating profit from its Spanish businesses and further growth in its loyalty business.