Fuel costs will grab the headlines when International Airlines Group reports on Friday 6 November, but the promised guidance on its 2026 Dividend may tell shareholders more about how management sees the year.

The line most previews skip

Most attention on International Consolidated Airlines Group (LSE:IAG) this week will centre on fuel. That is understandable. Brent Crude fell by about $12.50 on Monday 2 November 2026, IAG's shares rose 3.8% and the FTSE 100 closed at 10,761.33 for a fourth consecutive gain.

Yet tucked inside IAG's second-quarter update was a commitment that gives Friday's third-quarter results an extra layer. The group said guidance for its 2026 dividend would be provided alongside the Q3 numbers on 6 November. That means Friday is not only a trading update. It is also the moment IAG tells shareholders what kind of payout to expect for the year.

Dividend guidance is a statement of confidence. A board sets it with an eye on profits, cash flow, Debt and Investment plans. That is why it can say more about management's view of the outlook than a single quarter's earnings. What IAG will say is unknown. No figure has been published, and this article does not forecast one.

The benchmark is the 2025 payout. IAG's total dividend for 2025 was €0.098 per share, an increase of 8.9% on the year before.

Illustration: working backwards, an 8.9% rise to €0.098 implies a prior-year total of about €0.098 ÷ 1.089 ≈ €0.090 per share. For a hypothetical holder of 1,000 shares, the 2025 total dividend would amount to 1,000 × €0.098 = €98 before tax. These figures show the arithmetic only and say nothing about the 2026 payout.

Whether 2026 brings another rise, a similar level or something different will be read against that €0.098 base.

What sits behind the payout decision

Several pieces of IAG's July update are likely to feature in any discussion of Shareholder returns, though how the board weighs them is not known.

Cash returned by other means. IAG is running a €1.5bn share buyback, and about €800m of it had been completed by the time of the second-quarter results. That left roughly €700m outstanding at that point. Buybacks and dividends are both ways of returning cash, so progress on one is relevant context for the other.

A lighter debt load. Net debt fell by just over a fifth to €4.7bn. A smaller debt pile generally gives a company more room in its Capital allocation.

Profits under pressure from fuel. Second-quarter adjusted operating profit fell 16% to €1.41bn, though it beat the €1.38bn analysts had forecast. Revenue rose 0.2% to €8.9bn. Fuel costs climbed by nearly 25% in the quarter, and IAG guided to a full-year fuel bill of up to €8.6bn, down from €9bn, while expecting to recover about 60% of higher fuel costs. Capacity for 2026 is now expected to be flat.

That mix of falling debt, ongoing buybacks and squeezed profits is what makes the dividend guidance hard to call, and worth watching. Chief executive Luis Gallego will be under scrutiny on how the group balances those priorities.

The income backdrop has shifted

IAG's guidance will arrive in a changed environment for income-seeking investors. The Bank of England announces its decision on Thursday 5 November, the day before IAG reports. Bank Rate is 3.75%, and a quarter-point rise to 4% is widely expected; markets price it at around 95%. It would be the first increase in more than three years.

The pressure for higher rates has been building. The UK Manufacturing PMI rose to 52.8 in October from 51.9, a five-month high, and UK Inflation rose faster than expected in September. The survey's compilers said resilience and surging input prices "will further shorten the odds of Interest Rate hikes".

Bond yields add to the comparison. UK 10-year gilt yields hit 5.44% earlier in October, a 19-year high, before late-October reports put them below 5.3%. In the US, the 10-year Treasury Yield stood at 4.89% on Monday. When safer Assets pay more, the bar for share dividends rises, which gives Friday's guidance added weight.

Currency is a further wrinkle for UK-based holders. IAG's dividend is declared in euros. Sterling stood at €1.1980 on Monday, so the sterling value of any payout depends on the Exchange Rate when it is paid.

The share-price move into Friday has been helped by oil. Brent fell to $105.09 a barrel at the London close, from $117.61 on Friday, after reports that Washington and Tehran were considering renewed indirect negotiations and that Iran had offered to reopen the Strait of Hormuz under strict conditions. One US close report put Brent's settlement at $104.77, down 7.63%.

Travel and leisure was the best FTSE 350 sector on Monday, up 2.7%, and reports tied the gains in airlines and consumer-facing stocks to cheaper oil. Elsewhere in the FTSE 100, JD Sports Fashion (LSE:JD.) led with a 4.76% rise, while oil producers Ithaca Energy (LSE:ITH) and BP (LSE:BP.) fell 5.94% and 4.37%. The FTSE 250 outpaced the Blue-Chip index with a 1.4% jump.

A cheaper barrel helps sentiment, but the third quarter ended on 30 September. Friday's reported figures will reflect summer conditions, while the dividend guidance will be shaped by how the board sees the months ahead.

Key dates to watch

  • Tuesday 3 November: US midterm elections
  • Thursday 5 November: Bank of England rate decision
  • Friday 6 November: IAG third-quarter results and 2026 dividend guidance
  • Friday 6 November: US October payrolls
  • Thursday 12 November: UK GDP first quarterly estimate for July–September, 7:00am

The bottom line

Friday's results will be judged first on fuel, but IAG's 2026 dividend guidance could prove the more telling signal. It will be measured against a 2025 total of €0.098 per share, a buyback that was a little over half complete in July and net debt that had fallen to €4.7bn. With a Bank of England rate rise expected the day before, investors will be watching how IAG chooses to reward shareholders in a world where cash pays more.