finance

Five billion pound loss for IAG, parent company of British Airways


In the latest demonstration of the severe damage caused by the coronavirus pandemic to the airline industry, IAG has revealed losses of almost €6bn (£5.5bn) for the first nine months of 2020.

The consortium, which includes British Airways, Aer Lingus and the two Spanish airlines, Iberia and Vueling, lost an average of £20m per day between January and September.

Announcing the results for the third quarter of 2020, the new chief executive, Luis Gallego, said: “These results demonstrate the negative impact of Covid-19 on our business but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.

“We are calling on governments to adopt pre-departure testing using reliable and affordable tests with the option of post-flight testing to release people from quarantine where they are arriving from countries with high infection rates. 

“This would open routes, stimulate economies and get people travelling with confidence.

“When we open routes, there is pent up demand for travel. However, we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.”

The accounts reveal that 10,000 jobs have been lost at BA and Aer Lingus, with the redundancies costing IAG £250m. The vast majority are at British Airways, which reduced its head count by 9,680 up to the end of October.

The firm has procured “an upfront payment of €830m [£750m],” effectively selling Avios loyalty points forward to American Express.

“Hedging” the cost of expected fuel needs has so far this year cost IAG €1.6bn (£1.46bn) – effectively paying for fuel that was never delivered because the company’s airlines were unable to use it.



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