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The parent company of British Airways (BA) has revealed further losses and has lowered its outlook as renewed coronavirus restrictions affect travel demand.
International Airlines Group (IAG), which includes Iberia and Aer Lingus in its airline group, reported a loss of 1.3 billion euros (1.17 billion pounds sterling) for the third quarter of the year to the end of September in an unexpected update of the market.
The figure compares with a profit of almost 1.4 billion euros in the same period last year and was far worse than the loss of 920 million euros that analysts in the city expected.
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IAG, which implemented a management shakeup after the departure of CEO Willie Walsh in September that saw the head of BA Alex Cruz expelled, warned that it would fly no more than 30% of the capacity it flew in the same period last year in the current fourth quarter.
The company said: “Recent general reserves have not developed as expected due to additional measures implemented by many European governments in response to a second wave of COVID-19 infections, including an increase in local blockades and the extension of quarantine requirements to travelers from a growing number of countries.
“At the same time, initiatives designed to replace quarantine periods and increase customer confidence to book and travel, such as pre-departure tests and airway arrangements, have not been taken up by governments as quickly as expected. “.
IAG said the continued disruption meant it would no longer meet a key breakeven net cash flow objective in the fourth quarter.
Its shares, which have lost nearly three-quarters of their value so far this year, fell 5% at the open.
Global coronavirus lockdowns and changing national restrictions have taken a heavy toll on the aviation sector.
A Sky News job tracker shows that the industry has suffered the most in terms of job losses, with BA alone expecting to have cut as many as 13,000 jobs once its downsizing is complete.
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Its own cost-cutting plans also included scrapping its fleet of 747 jumbo jets.
The industry has demanded a testing regime that can replace the quarantine demands imposed on passengers traveling back to the UK from “red list” countries.
In an interview with Sky News this week, Heathrow’s chief executive said the government had moved towards fulfilling that ambition by launching a new task force.
The UK’s largest airport has introduced ‘rapid’ tests this week, at a cost of £ 80, for people wishing to travel to Italy and Hong Kong.
