International Consolidated Airlines Group (LON:IAG), the owner of British Airways and Iberia, has warned more job losses are likely if it is to survive the coronavirus pandemic disruption to air travel.
British Airways announced 12,000 of staff cuts last week but in a first-quarter trading update today, IAG said 'further wide restructuring measures are essential’ as it does not expect passenger demand to recover to pre-coronavirus levels until 2023.
Capacity on IAG's fleet reduced by 94% in April and losses in the three months soared to €1.86bn including a €1.32bn one-off charge for fuel hedges.
Operating losses were €535mln, but IAG added that it expects the second quarter to be significantly worse than the first three months.
In addition to the BA job losses, an order for 68 aircraft has been deferred and capital spending reduced by €1.2bn.
Willie Walsh, chief executive, said the airline owner was planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world.
That would see around 50% of flights taking off, though Walsh added this plan was highly uncertain and subject to the easing of lockdowns.
Operating costs in April and May were cut to €200mln per week from €440mln.
Separately Walsh said he intends to step down as IAG’s chief executive on September 24, 2020, with successor Luis Gallego taking over from that point onwards.
Walsh had delayed his retirement due to the coronavirus crisis.