IAG Considers Reinstating Dividends as Airline Industry Recovers

In a move reflecting the recovering strength of the airline industry, International Airlines Group (IAG), the parent company of British Airways, is reportedly contemplating the reinstatement of dividend payments to shareholders as early as this year. This development, as reported by Bloomberg News, marks a significant turnaround from the challenges faced during the pandemic, which forced the conglomerate to halt its dividend distributions.

Before the global travel disruptions caused by COVID-19, IAG had maintained a steady dividend policy, with the last interim dividend of 0.145 euros ($0.1566) per share paid out in 2019. However, the ensuing global crisis led to the suspension of final payouts in 2020 as the airline sector grappled with unprecedented disruptions.

IAG, which also oversees Aer Lingus and FlyLevel among others, has been tight-lipped in response to media inquiries about this financial strategy, offering no immediate comment.

Despite a cautious stance in February, indicating no dividends would be disbursed for 2023, IAG acknowledged that its main operating entities faced no dividend distribution restrictions, with the exception of British Airways. The flagship UK carrier is currently navigating several undrawn committed credit facilities, which may influence its capacity to contribute to group-wide dividend payments.

The consideration to resume dividends underscores a broader optimism in the airline industry’s recovery trajectory. As travel demand rebounds and airlines begin to stabilize financially, stakeholders are keenly watching for signs of returning shareholder value. IAG’s deliberations on dividends will be closely monitored, offering potential insights into the sector’s financial health and the company’s confidence in its sustained recovery.

Sources: AirGuide Business, airguide.info, bing.com, bloomberg.com