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British Airways owner IAG posts 1.14b euro first quarter loss

NEWS
By Reuters | May 7th 2021

British Airways-owner IAG reported a 1.14 billion euro loss for the three months to end-March, as the pandemic restricted travel, and forecast only a small rise in capacity to 25 per cent for the April-June quarter.

Flying just 20 per cent capacity in the three months to the end of March resulted in the group posting the operating loss before exceptional items of 1.14 billion euros, slightly better than the 1.17 billion euro loss consensus forecast.

IAG on Friday forecast only a minimal pick-up in capacity to 25 per cent for the April to June quarter, remaining cautious despite hopes that European travel will start to recover from late May onwards.

The rise to 25 per cent of 2019's capacity puts IAG's plans behind those of competitor airlines, and compares to the 19.6 per cent of capacity that it flew in the January to March quarter as the coronavirus pandemic continued to restrict travel.

IAG chief executive Luis Gallego said in a statement the airline was "ready to fly but government action is needed".

He called for travel corridors to open between countries with high vaccination rates, such as the United Kingdom and the United States.

Britain is set to publish later on Friday its "green list" of low-risk places where people can travel from May 17 without needing to quarantine on their return home, but reports suggest that just a handful of countries will make the list.

IAG's capacity plans put it behind Air France-KLM, which said on Thursday it expects to operate 50 per cent of its pre-pandemic flight capacity in the second quarter. Lufthansa last week cut its capacity to forecast to about 40 per cent of its pre-pandemic capacity for 2021. European airlines hope that by July, much of the continent will be open for travel, meaning bookings will rise and they can ramp up capacity to start repairing their COVID-19 battered finances.

Minimal flying in January to March quarter, resulted in IAG posting an operating loss before exceptional items of 1.14 billion euros, slightly better than the 1.17 billion euro loss forecast by analysts.

IAG, which also owns Iberia and Vueling in Spain and Aer Lingus in Ireland, said it reduced weekly cash burn to 175 million euros, a better performance than the 185 million euros a week it had previously guided for the period.

The group also said it had strong liquidity of 10.5 billion euros at the end of the first quarter. Given the ongoing uncertainty over COVID-19, IAG said it could not provide profit guidance for 2021.

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