Heavy losses continue at IAG – but boss says ‘there’s a significant recovery under way’ as America opens up
The parent company of British Airways, International Airlines Group (IAG), lost a further €452m (£383m) between July and September this year. But the chief executive told investors: “There’s a significant recovery underway.”
For the first nine months of the year, the group lost €2.49bn (£2.13bn), less than half the loss for the corresponding spell in 2020.
The chief executive, Luis Gallego, said: “The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry.
“British Airways is serving more US destinations than any transatlantic carrier and we’re delighted that we can get our customers flying again.
“There’s a significant recovery underway and our teams across the group are working hard to capture every opportunity. We continue to capitalise on surges in bookings when travel restrictions are lifted.
“All our airlines have shown improvements. In Q3 [July-September], our operating cash flow was positive for the first time since the start of the pandemic and our liquidity is higher than ever.”
He added that long-haul traffic is recovering faster than short-haul: “Premium leisure is performing strongly at both Iberia and British Airways and there are early signs of a recovery in business travel.”
But British Airways is behind the group’s Spanish airlines, Iberia and Vueling. Iberia returned to profitability over the summer, while the low-cost airline Vueling “reached breakeven at the operating level”.
Passenger capacity doubled for the third quarter of 2021 compared with the previous three months, but remained well below half the level in 2019, at 43.4 per cent.
Between October and December, capacity is expected to rise to 60 per cent of pre-pandemic levels, with an average of 37 per cent for the full year.
Mr Gallego said: “In the short term, we are focused on getting ready to operate as much capacity as we can and ensuring IAG is set up to return to profitability in 2022. This includes initiatives such as our new short-haul operation at Gatwick, Vueling’s expansion at Paris-Orly [and] Aer Lingus’s services from Manchester to the US and the Caribbean.”
For the full year, IAG expects an operating loss of €3bn (£2.6bn).