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IAG losses grow as it completes 10,000 job cuts

“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,” said new boss Luis Gallego

International Consolidated Airlines Group -

International Consolidated Airlines Group (LON:IAG) said its full loss for the third quarter was €1.9bn as it continued to axe staff at British Airways and Aer Lingus due to a lack of international travel amid the coronavirus pandemic.

Publishing its full quarterly results after releasing preliminary figures earlier in the month, the FTSE 100-listed carrier revealed a full statutory post-tax loss of €5.6bn for the nine months to September 30, 2020.

Agreements to make 10,000 British Airways and Aer Lingus staff redundant have now been reached with most employee groups at British Airways, the company said, leading to a cost of €275mln in the quarter.

New chief executive Luis Gallego said the group continues to reduce its cost base and increase the proportion of our variable costs, while the completion of a €2.74bn fundraise during the quarter “strengthens our financial and strategic position and makes IAG better placed to take advantage of a recovery in air travel demand”.

He blamed the job losses on the negative impact of COVID-19 on the business and “constantly changing government restrictions”, which “creates uncertainty for customers and makes it harder to plan our business effectively”.

He added: “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.”

In the previous announcement, IAG said that the uncertainty around travel meant it is now planning for capacity in the fourth quarter to be no more than 30% of the same period last year and so it no longer expects to reach cash flow breakeven from operating activities during the quarter.

Quick facts: International Consolidated Airlines Group

Price: 160.85 GBX

LSE:IAG
Market: LSE
Market Cap: £7.99 billion
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