IAG share price flies higher as group unveils special dividend

Shares in International Consolidated Airlines Group (LON:IAG) have climbed higher in today’s session as the British Airways and Iberia parent said that it would pay out a special dividend to shareholders as it updated the market on its full-year performance. The company, which also owns Aer Lingus and low-cost airlines Vueling and Level, noted that it was ordering Boeing aircraft for its British Airways unit.

As of 09:34 GMT, IAG’s share price had added 1.30 percent to 608.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.69 percent lower at 7,058.04 points. The group’s shares have lost more than one percent of their value over the past year, as compared with about a 2.4-percent dip in the Footsie.

IAG updates on FY performance

IAG announced in a statement this morning that its revenue had climbed 6.7 percent to €24.4 billion last year, generating operating profit before exceptional items of €3.23 billion, 9.5 percent higher year-on-year. The British Airways parent unveiled final proposed dividend of 16.5 € cents per share, as well as a special dividend of 35.0 € cents per share, or approximately €700 million.

“This was a very good performance despite three significant challenges: fuel prices increasing 30 percent, considerable Air Traffic Control disruption and an adverse foreign exchange impact of €129 million,” the group’s chief executive Willie Walsh commented in the statement.

Going forward, however, the company expects its 2019 operating profit before exceptional items and impacts of IFRS16 to be in line with the €3.23 billion reported this year. 

Group announces aircraft order

IAG announced in a separate statement that it was ordering 18 Boeing 777-9 aircraft, plus 24 options, for British Airways, to replace 14 Boeing 747-400 and four Boeing 777-200 between 2022 and 2025.

“This aircraft will provide further cost efficiencies and environmental benefits with fuel cost per seat improvements of 30 percent compared to the Boeing 747,” Walsh said in the statement.

As of 10:05 GMT, Thursday, 28 February, International Consolidated Airlines Grp share price is 608.00p.