IAG: Capital Markets Day & Dividend Statement

IAG CAPITAL MARKETS DAY 2014

At its Capital Markets Day today (November 7, 2014) IAG will update the market with the following information:

· Long-term planning goals for 2016-2020 include:

o Return on Invested Capital (real terms) of 12%+
o An operating profit margin of 10% to 14%
o Average EPS growth of 10%+ per annum
o EBITDAR of approximately €5bn average per annum
o Capex of €2bn to €3bn per annum
o Equity free-cash flow of €1bn to €1.5bn per annum
o ASK growth of approximately 3% to 4% per annum
o Gearing to be in the investment grade zone

· Dividend policy statement:

o It has been the stated intention of IAG to distribute regular dividends to our shareholders in the medium and long term, in an amount appropriate to market conditions, depending on a number of factors, including but not limited to, the earnings of the company, financial conditions, cash requirements and prospects and legal requirements.

o The Company has made significant progress during 2014 and we remain confident in meeting our 2015 financial targets which we see as the trigger to introducing a dividend.

o Therefore we anticipate making a declaration in 2015 as the first step in our plan to introduce a sustainable dividend payment.

o The initial dividend would be based on a payout ratio of 25% of our underlying profit after tax.

The presentations from the Capital Markets Day can be accessed via www.iairgroup.com and a webcast of the event will be available today from 0830 GMT/0930 CET.