30th Oct 2020 09:01
(Alliance News) - International Consolidated Airlines Group SA on Friday said its earnings for the nine months of 2020 were severely hurt by the outbreak of Covid-19 and warned demand for air travel is unlikely to fully recover before 2023.
For the nine months to September 30, revenue fell 66% to EUR6.57 billion from EUR19.29 billion last year. IAG, which owns British Airways, swung to an adjusted pretax loss of EUR3.18 billion in the nine-month period from a EUR1.81 billion profit in the same period last year.
The company swung to an operating loss of EUR1.30 billion from an operating profit of EUR1.42 billion.
"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," said Chief Executive Officer Luis Gallego.
"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," added Gallego.
IAG, which also owns Aer Lingus, Iberia, Level and Vueling, earlier in October had said it would cut fourth-quarter capacity to no more than 30% compared to 2019 due to the ongoing uncertain environment. As a result, the company no longer expects to reach breakeven in terms of net cash flows from operating activities during the final quarter.
For the first nine months of 2020, passenger numbers fell 70% to 26,977 and available seat kilometres were down 64% at 91.4 million.
IAG has decided against providing financial guidance for 2020, given the uncertainty on the impact and duration of Covid-19.
The stock was up 1.2% at 92.17 pence in London on Friday morning.
By Tapan Panchal; [email protected]
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