British Airways owner warns of loss of 3 billion euros despite reopening of trips to the United States

white british airways taking off the runway
Photo by Pixabay on Pexels.com

The pre-tax loss was reduced from 2 billion euros to 714 million euros compared to the same period a year ago.

IAG (IAG.L), the owner of British Airways, has warned of a loss of 3 billion euros (2.6 billion pounds, 3.5 billion dollars) this year, after flying only 43% of its schedule normal during the third trimester.

The company recorded large losses during its summer period thanks to various travel restrictions around the world, although the figures are starting to improve. Although passenger capacity was low, it increased from 21.9% in the three months to the end of June.

Due to a “significant” recovery of the entire industry as the world economy recovers from the pandemic, capacity is expected to increase to 60% in the last quarter of the year.

It expects about three stronger final months as transatlantic flights have resumed. The group also hopes to return to profitability in 2022 if it reaches pre-COVID-19 levels in the high summer season.

During the period, the pre-tax loss fell from 2 billion euros to 714 million euros compared to the same period last year.

 

“There is a major recovery underway and our teams across the group are working hard to seize every opportunity. We continue to take advantage of increased bookings when travel restrictions are lifted,” said Luis Gallego, CEO of IAG.

“The full reopening of the transatlantic corridor starting Monday is a key moment for our industry. British Airways offers more destinations in the United States than any transatlantic carrier and we are thrilled to be able to fly our customers back.”

In October, the UK government gave a boost to the industry, reducing the number of countries on the red list, which has the toughest restrictions, from 54 to just seven.

The rules for COVID-19 testing were also simplified with PCR testing for international travelers that was ruled out last month.

However, the firm, which also owns Iberia, Aer Lingus and Vueling, admitted that its smaller airlines have outperformed British Airways, which depends on the North Atlantic market.

The story goes on

Both Iberia and Vueling strengthened their positions on routes in Latin America and the Spanish domestic market, while Iberia returned to profitability.

 Gallego added: “Our teams are creating opportunities and implementing initiatives to transform our business and prepare it for the future so that they become more competitive.

“This includes initiatives such as our new short-haul operation in Gatwick, Vueling’s expansion in Paris-Orly, Air Lingus services from Manchester to the US and the Caribbean and our new maintenance model in Barcelona.”

IAG shares fell 2.4% a day in London, making it one of the biggest losers in the FTSE 100.

AJ Bell’s Russ Mold said the results showed the airline “was still stranded on the runway.”

“The best news for IAG in recent weeks has been the reopening of travel to North America. The long-haul route from London and New York had been the jewel in the crown of British Airways for a while and, if the business really wants to shine, it needs a constant flow of passengers between the two cities.

“This reliance on long-haul flights has been bolstered after IAG’s apparent adoption of a plan to launch a budget short-haul carrier was abandoned almost as soon as it was recently announced,” he said. to say.

 

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