British Airways parent International Airlines Group is to pay its first dividend to shareholders on the back of improving results.
The news came ahead of IAG publishing third-quarter figures this morning which showed operating profits soaring by €350 million over the same period last year to €1.25 billion, on revenue up by 15.2% to €6.7 billion.
IAG expects to generate an operating profit between €2.25 billion and €2.3 billion for the full year, excluding newly-acquired Aer Lingus.
British Airways made a profit of €825 million in the three months to September 30, up from €607 million a year earlier.
Iberia’s profit was up to €200 million from €162 million and Vueling’s up to €178 million from €140 million.
Newly acquired Aer Lingus’s operating profit was €45 million from August 18, the date of acquisition.
Chief executive, Willie Walsh, said: “We’re delighted to announce IAG’s first dividend payment of 10 euro cents per share.
“For the full year we expect to pay out 25% of our underlying profit after tax in dividends and plan to announce a proposal for a final dividend for 2015 when the full year results are published.”
IAG saw passenger revenue rise by 13.6% in the first nine months of its financial year to €15.2 billion to give a 59.7% improvement in operating profit to €1.8 billion.
The pre-tax profit for the nine months came in at €1.14 billion against €1.1 billion a year earlier after €38 million in exceptional charges mainly related to the takeover of Aer Lingus.
This came as capacity rose by 6.9% and traffic increased 8.2%, with an improved seat load factor of one percentage point to 81.7%.
Selling costs dropped by 4.9% due to the timing of promotions and from improvements in supplier contract terms, IAG said. The reduction in selling costs were partially offset by volume increases with additional passengers carried of 12.4%.
Walsh said: “We’re reporting strong quarter results with a positive contribution from all of our airlines. IAG made an operating profit before exceptional items of €1,250 million, up from €900 million last year.
“Our passenger unit revenue showed a better trend than in the second quarter of the year and our cost performance remained strong.
“Aer Lingus made an operating profit of €45 million since it joined IAG on August 18.
“While the airline’s profitability is seasonal, Aer Lingus is cost-effective and provides a natural gateway to build our business between Europe and North America. It’s a great asset for the group.”
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