British Airways-owner International Consolidated Airlines Group's (LSE:IAG) shares fell almost 2% to 160.5p as it held a much-anticipated event for investors, where its targets for the "medium term" included a return to paying dividends.
Other medium-term targets set out by the FTSE 100-listed group in a statement ahead of the event included an operating margin of 12-15%, a return on invested capital of 13-16%, and leverage (net debt/EBITDA) of less than 1.8x over the cycle.
IAG said it will restart dividend payments, which have been on pause since before the pandemic, only once its balance sheet and investment plans are "secure".
The Anglo-Iberian group had said a year ago that it could restart shareholder returns in 2024, after signing a new agreement its pension scheme trustee.
"We are focused on extending our core leadership positions in the North Atlantic and South Atlantic through developing our hubs, while enabling IAG Loyalty to reach its full potential within the group,” said chief executive Luis Gallego.
“Our transformation and investment plans will drive a step change across our businesses, delivering efficiencies and a market-leading customer experience. Executing our strategy will enable us to deliver sustainable growth and returns for our shareholders."
Analysts at UBS said the targets are "broadly in line with our expectations and we expect the market’s reaction to be largely neutral".
While the shares have advanced since IAG reported record third-quarter numbers last month, helped by improved transatlantic demand and lower costs, several analysts seemed to remain unenthused, saying other European airlines may offer more attractive investment opportunities, with others having doubts over slowing growth.