HomeBusinessAirline giant IAG slashes losses on COVID recovery

Airline giant IAG slashes losses on COVID recovery

Iberia has returned to profit and the entire IAG airline group hopes to do so next year.

British Airways owner IAG said Friday that third-quarter losses shrank sharply on the lifting of COVID travel curbs, and expressed hope of a return to profit next year.

The loss after taxation hit 574 million euros ($664 million) in the three months to September compared with 1.8 billion euros a year earlier, IAG said in a statement, while revenues more than doubled on strong long-haul demand.

The group’s star performer, Spanish carrier Iberia, meanwhile bounced back into profitability.

The European travel conglomerate, whose portfolio also includes Aer Lingus, Level and Vueling, added that it flew 43.4 percent of its pre-pandemic 2019 capacity.

IAG expects this figure to reach 60 percent in the fourth quarter.

‘Significant recovery underway’

“There’s a significant recovery underway,” said Chief Executive Luis Gallego.

“We continue to capitalise on surges in bookings when travel restrictions are lifted.

“The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry.”

IAG shares however sank more than three percent in early trade on the London stock market.

“As such, the company remains firmly in the camp of a recovery play, which in turn has attracted the attention of investors still keen on IAG’s prospects,” noted Interactive Investor analyst Richard Hunter.

“The market consensus of the stock as a strong buy suggests that IAG may soon be breaking out of its current holding pattern.”

The pandemic slammed global aviation last year as travel curbs destroyed demand, but the industry has been boosted this year by the gradual lifting of international travel restrictions.

The full reopening of worldwide air travel has however been held back by the Delta variant of the coronavirus.

IAG added Friday that operating losses also improved sharply to 452 million euros, down from 1.9 billion euros last time around.

And revenues soared to 2.7 billion euros.

Return to profit

“In the short term, we are focused on getting ready to operate as much capacity as we can and ensuring IAG is set up to return to profitability in 2022,” said Gallego.

IAG added that both Iberia and Vueling had recovered well from pandemic fallout and remained the best performers in the group.

“Iberia returned to profitability while Vueling reached breakeven at the operating level,” noted Gallego.

“Both seized opportunities to strengthen their positions on routes to Latin America and the Spanish domestic market.”

The group suffered a vast net loss of 6.9 billion euros in 2020, slashing about 10,000 jobs at British Airways and 500 positions at Aer Lingus as it sought to navigate the COVID crisis.

IAG is the latest aviation giant to log improving financial results, even if they remain in loss.

Earlier this week, Irish no-frills airline Ryanair revealed net losses narrowed sharply during its first half, or six months to September.

The Dublin-based carrier, which flies mainly throughout Europe, said Monday that its net loss totalled 48 million euros, after a loss of 411 million euros a year earlier.

Ryanair losses widen on Covid travel restrictions

© 2021 AFP

Airline giant IAG slashes losses on COVID recovery (2021, November 5)
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