British Airways owner IAG hit by record €7.4bn loss | International Airlines Group

The owner of British Airways, Worldwide Airways Group, has reported a report €7.4bn loss for final 12 months, and referred to as for the introduction of digital well being passes for passengers to allow the airline business to get again on its toes.

IAG stated that passenger capability final 12 months was solely a 3rd of 2019 and within the first quarter of this 12 months is operating at solely a fifth of pre-Covid ranges. The airline group reported a complete annual working lack of €7.4bn (£6.4bn), together with distinctive objects regarding gas and foreign money hedges, early fleet retirement and restructuring prices. It in contrast with a €2.6bn revenue in 2019.

“Our outcomes replicate the intense affect that Covid-19 has had on our enterprise,” stated Luis Gallego, the chief govt of IAG. “The group continues to scale back its value base and enhance the proportion of variable prices to higher match market demand. We’re reworking our enterprise to make sure we emerge in a stronger aggressive place.”

IAG’s passenger revenues plunged 75% from €22.4bn to €5.5bn final 12 months nevertheless it stated its cargo enterprise had “helped to make long-haul passenger flights viable” in the course of the pandemic. Cargo revenues elevated by virtually €200m to €1.3bn and IAG additionally operated greater than 4,000 cargo-only flights in the course of the 12 months.

The airline group stated that due to the uncertainty over the affect of the pandemic on its enterprise, it will not present revenue steering for this 12 months and referred to as for a global plan to “reopen the skies”.

Gallego stated: “The aviation business stands with governments in placing public well being on the high of the agenda. Getting folks travelling once more would require a transparent roadmap for unwinding present restrictions when the time is correct. We all know there’s pent-up demand for journey and folks need to fly. Vaccinations are progressing properly and world infections are getting into the proper route. We’re calling for worldwide widespread testing requirements and the introduction of digital well being passes to reopen our skies safely.”

IAG burned by means of €4.1bn in money final 12 months – virtually €80m every week. Regardless of this, the corporate stated its liquidity stood at €10.3bn, larger than initially of the pandemic. IAG’s market worth has halved to £9.6bn because the begin of the pandemic.

“These outcomes from IAG actually do convey out simply how painful the final 12 months has been for the airline business,” stated Jack Winchester, an analyst at Third Bridge. “Traders have been keen to plug IAG’s funds on the idea of an eventual restoration however when the mud settles we’re more likely to see that low-cost carriers like Ryanair and Wizz Air have come out of 2020 in much better form.”

In the meantime, Gatwick airport additionally slumped into the crimson, reporting a £526m pre-tax loss final 12 months, in contrast with a £211m revenue in 2019.

Gatwick stated passenger numbers had slumped by 78% in 2020 because the pandemic compelled the airport to scale back employees ranges by 40%, renegotiate contracts and consolidate all its operations into one terminal.

“I stay optimistic that Gatwick will get well,” stated Stewart Wingate, the airport’s chief govt. “Earlier than air journey restoration begins … we additionally want the UK authorities to supply additional help by extending the furlough scheme for a couple of extra months and offering enterprise charge reduction, as airports have been afforded in Scotland, for the present monetary 12 months.”