IAG: better-than-expected quarterly results, dividend reinstated

(CercleFinance.com) - On Friday, International Airlines Group (IAG) reported better-than-expected quarterly results and proposed to pay a dividend to its shareholders, announcements which resulted in its shares posting the biggest rise in the FTSE 100 index.


Operating profit for the airline group, which includes British Airways, Iberia, Aer Lingus and Vueling, fell to E1.24bn in the quarter just ended, compared with E1.25bn a year earlier.

However, this figure exceeds the consensus of E1.08bn.

IAG explains that it benefited from strong passenger demand for the most attractive destinations in its core markets: the North Atlantic, Latin America and Europe.

Expressing confidence in its strategy and business model, the group has decided to once again pay a dividend to its shareholders, with an interim dividend of three euro cents to be paid in September.

IAG has also decided not to buy the remaining 80% of Air Europa's capital from Globalia, as it had promised to do last year, due to the current regulatory environment.

For the record, the European Commission decided earlier this year to open an in-depth investigation to assess the competitive consequences of the proposed acquisition.

Although IAG plans to retain its 20% stake in Air Europa, acquired in 2022, the Group will still have to pay Globalia a termination fee of 50 million euros.

On the London Stock Exchange, IAG shares were boosted by all these announcements on Friday morning, up 5%, the gold medal holder on the FTSE 100 index.


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