There's potential good news for investors in International Consolidated Airlines Group (IAG), the parent company of British Airways. According to a Bloomberg News report from April 5th, citing anonymous sources familiar with the matter, IAG is considering resuming dividend payouts as soon as this year.
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This would mark a significant shift for the airline group, which halted dividend payments in 2020 due to the financial strain caused by the COVID-19 pandemic. The last dividend distributed by IAG was an interim payout of 0.145 euros per share in November 2019.
The report highlights that IAG directors had previously proposed no dividends for 2023. However, there was a caveat - restrictions on payouts only applied to British Airways itself, not the other airlines under the IAG umbrella. This is likely because British Airways had outstanding credit facilities that limited their ability to distribute funds.
The potential return on dividends suggests that IAG is cautiously optimistic about its financial health. The fact that British Airways, their largest and most profitable airline, is no longer restricted from contributing to payouts strengthens this outlook. However, an official confirmation from IAG is still pending, and the final decision on dividend distribution will likely depend on the company's overall financial performance throughout 2024.