IAG lost more than €1 billion in Q1 2020

posted on 7th May 2021 by Edward Robertson
IAG lost more than €1 billion in Q1 2020

IAG has lost more than a billion euros in the first quarter (Q1) of 2021 as passenger capacity remains at 19.6 per cent of Q1 2019.

The owner of British Airways, Aer Lingus, Iberia, Vueling and LEVEL said despite the loss, the group has strong liquidity of €10.5 billion at the end of the quarter, 31 March, up €200 million on the total pro-forma liquidity of €10.3 billion at December 31, 2020.

IAG CEO Luis Gallego said although passenger numbers continue to be adversely affected by the Covid-19 pandemic, he expects some growth in Q2 with passenger capacity expected to be at 25 per cent of 2019 levels, although this could yet change.

As with other airlines, cargo has been strong he added, with 1,306 cargo-only flights operate in Q1, up from 969 in Q4 2020.

Gallego said: “In quarter 1, we’re reporting an operating loss of €1,135 million before exceptional items compared to an operating loss of €535 million last year.

“We’ve acted decisively to build resilience by boosting liquidity and reducing our cost base. At March 31, the group’s liquidity increased to €10.5 billion which demonstrates IAG’s good access to capital markets.

“Cargo has enabled us to operate a more extensive passenger long-haul network. In addition, we operated 1,306 cargo-only flights and generated €350 million in revenue, a record for quarter 1.

“We’re taking all necessary actions to ensure the financial health of our business for the long-term, including last year’s successful €2.7 billion capital increase, and remain focused on reducing our cost base and increasing efficiencies.

“Despite the challenges posed by the current pandemic, our focus on the safety of our people and customers remains paramount alongside our climate commitments.

“Our pledge to powering 10 per cent of our flights with sustainable aviation fuel by 2030 shows that we will not back down from our ambition to lead aviation’s efforts to reduce its carbon footprint.

“We’re doing everything in our power to emerge in a stronger competitive position. We’re absolutely confident that a safe re-start to travel can happen as shown by the scientific data.

“We’re ready to fly, but government action is needed through four key measures: travel corridors without restrictions between countries with successful vaccination rollouts and effective testing such us the UK and the US.

“(We also need) affordable, simple and proportionate testing to replace quarantine and costly, multi-layered testing; well-staffed borders using contactless technology including e-gates to ensure a safe, smooth flow of people and frictionless travel and digital passes for testing and vaccination documentation to facilitate international travel.

“These measures will enable a safe re-opening of our skies. Travel underpins a global industry that supports 13 million jobs in Europe alone. There’s a high level of pent-up demand and aviation will play a critical role in reconnecting people and getting economies back up and running again.”

Gallego also said that due to the uncertainty over the timing of the lifting of government travel restrictions and the continued impact and duration of Covid-19, IAG is not providing profit guidance for 2021.