The parent company of British Airways (BA) revealed further losses and downgraded its outlook as renewed restrictions on coronavirus reduced travel demand.
International Airlines Group, which includes Iberia and Aer Lingus in its stable of airlines, recorded a loss of 1.3 billion euros for the third quarter of the year at the end of September in an unexpected market update.
That figure compares with a profit of nearly 1.4 billion euros in the same period last year and was far worse than the loss of 920 million euros expected by City analysts.
IAG, who put together a management reshuffle after CEO Willie Walsh left in September which saw BA boss Alex Cruz ousted, warned it would not fly more than 30% of the capacity it stole over the same period last year in the current fourth quarter.
The company said: “Recent global bookings have not developed as expected due to additional measures implemented by many European governments in response to a second wave of COVID-19 infections, including an increase in local lockdowns and an extension of quarantine requirements to travelers from a growing number of countries.
At the same time, initiatives designed to replace quarantine periods and increase customer confidence to book and travel, such as pre-departure testing and air corridor arrangements, have not been adopted by governments as well. quickly than expected. ”
IAG said the continued disruption meant it would no longer meet a key breakeven net cash flow target in the fourth quarter. It’s shares, which have lost nearly three-quarters of their value so far this year, have fallen 5% at the opening.
Coronavirus lockdowns around the world and changing national restrictions have wreaked havoc on the aviation industry.
A Sky News job tracker shows the industry has suffered the most in terms of job losses, with BA alone expecting to cut as many as 13,000 jobs once its downsizing is over.
Its own cost reduction plans also included scrapping its fleet of 747 jumbo jets. The industry has demanded a testing regime that can replace the quarantine requirements imposed on passengers returning to the UK from so-called ‘red list’ countries.
In an interview with Sky News this week, the chief executive of Heathrow said the government had made progress towards this ambition with the launch of a new task force.
The UK’s largest airport this week introduced ‘rapid’ tests – costing £ 80 – for people wishing to travel to Italy and Hong Kong.