With little fanfare, shares in British Airways and Iberia owner International Consolidated Airlines Group (IAG) have climbed 25% over the last two months to hit a new 12-month high of 200p.

In a surprise turn of events, the firm announced at the beginning of August it had terminated its agreement to buy the remaining 80% of Air Europa on the basis ‘it would not be in the best interests of shareholders to continue in the current regulatory environment’.

The group returned to the dividend list last month with a small interim payout after first-half revenue rose 8.4% to €14.7 billion and pre-tax profit edged up to €1.05 billion.

A week later, IAG announced it would stop flying to Beijing, previously one of its most important routes, due to the cost, complexity and inconvenience to having to avoid Russian airspace.

As one industry observer commented, ‘Why bother when you can send the same plane to the US instead where demand for premium cabins remains sky-high?’

Shares notes IAG is a recent addition to the JOHCM UK Equity Income Fund (B03KR50), with the managers flagging its low single-digit price to earnings ratio as one of the attractions. 

‹ Previous2024-09-19Next ›