IAG, the group that owns Iberia, British Airways or Vueling, suffered a loss of 1.3 billion euros in the third quarter of this year (July-September) due to the collapse in passenger traffic derived from the pandemic, as reported this Friday. In these nine months the losses amount to 5,567 million euros, compared to the profit of 1,814 million as of September 2019.
Losses without taking into account exceptional items are 3,176 million, but the group faced an exceptional cost of 2,755 million euros due to the accounting write-off of hedges of
fuel and exchange rates, fleet deterioration and restructuring expenses.
This third quarter, which corresponds to the summer months, is usually precisely one of the busiest, and although IAG increased its flight schedule compared to the previous quarter, “Demand continues to be negatively affected by volatile government restrictions and the requirement for quarantines,” He points to the group.
“These results show the persistent negative impact of Covid on our business, but the constant changes in restrictions imposed by governments have only aggravated them. This creates uncertainty for our clients and makes it difficult to effectively plan our business “, stated Luis Gallego, CEO of IAG since September.
The group, which has just carried out a capital increase of more than 2,700 million to face the crisis derived from the pandemic, had revenues in the third quarter of 1,200 million, when last year it had obtained 7,266 millions. The losses were 1,300 million, compared to the profit of 1,425 million in the same period of 2019.
The group believes that, given the high uncertainty that exists at the moment, the capacity in the fourth quarter of 2020 will not be higher than 30%, compared to 2019, therefore, it is no longer expected that “cash flows will cover the costs of operations during the fourth quarter”. And that, despite the fact that the group has managed to reduce costs by 54%.
In fact, although there is no border closure as such, this second wave has already led countries such as Germany and France to confine their citizens, which will make autumn even more difficult for the air sector. Gallego has asked governments to “adopt procedures to perform tests before flight departures with reliable and affordable methods and that also include the option of conducting post-flight tests to exempt passengers from quarantines when they come from countries with high rates of contagion. This would open routes, stimulate the economy and get people to travel with confidence. When we open routes, we see that there is a contained demand for travel, “he says.
I am Derek Black, an author of World Stock Market. I have a degree in creative writing and journalism from the University of Central Florida. I have a passion for writing and informing the public. I strive to be accurate and fair in my reporting, and to provide a voice for those who may not otherwise be heard.