Aer Lingus owner IAG dangled the prospect of resuming dividend payments for the first time after the Covid-19 pandemic as soaring travel demand helps repair its balance sheet.

The airline group, which also owns British Airways and Spain’s Iberia alongside other carriers, said it would reinstate the payment of a dividend once its balance sheet and investment plans were secure, according to stock exchange filing ahead of a meeting with investors on Tuesday.

IAG last paid out a dividend in 2019, and scrapped a planned payout in 2020 at the start of the Covid-19 pandemic. Earlier this month, Ryanair said it will pay a dividend of €400 million and plans to hand over about a quarter of annual profit to shareholders.

IAG also set medium-term targets of an operating margin of 12 per cent-15 per cent and a return on invested capital of 13 per cent to 16 per cent. – Bloomberg