7th Nov 2014 07:52
LONDON (Alliance News) - International Consolidated Airlines Group Friday said it expects to meet its financial targets in 2015 and is considering introducing a long-term dividend plan for shareholders, as it reported a rise in October traffic.
"The company has made significant progress during 2014 and we remain confident in meeting our 2015 financial targets which we see as the trigger to introducing a dividend," the company said in a statement ahead of its Capital Markets Day later Friday.
The company, owner of British Airways and Spainish airlines Iberia and Vueling, said the initial dividend would be based on a payout ratio of 25% of underlying profit after tax.
IAG's announcement comes days after Irish airlines Ryanair Holdings PLC and Aer Lingus Group PLC raised their forecasts for the current financial year, after reporting growth in profit and revenue in the first half, driven by higher passenger numbers, average fares and lower fuel costs.
The move to introduce dividends comes after IAG spent recent years turning round its Iberia operations, which were loss-making due to a big cost bill and unprofitable routes. The airline is now streamlined, and costs have been reduced.
Outlining long-term planning goals for 2016-2020, IAG said it is aiming for an operating profit margin of between 10% and 14%, underlying operating profit of around EUR5 billion a year and annual capital spending of between EUR2 billion and EUR3 billion.
The company said October traffic increased 7.5% on the year in revenue passenger kilometres, and passenger numbers rose 10.3% to 6.9 million as its load factor remained steady at 81%.
Vueling, its lower-cost Spanish airline, reported a 27% rise in RPK, Iberia rose 6% and British Airways increased 5.4%.
By Ian Edmondson; [email protected]
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