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Summary
- British Airways’ owner IAG has suffered a loss of £5.1 billion in the first nine months of 2020
- IAG’s operating loss in the Q3 2020 was £1.3 billion, falling from profit of £1.4bn last year
- IAG CEO said it could take up to 2023 for traveller demand to recoup to 2019 levels
British Airways owner International Airlines Group (LON: IAG), after reporting a loss of £5.1 billion in the first nine months of 2020, has said that the demand for air travel is unlikely to recover to pre-pandemic levels before 2023.
IAG on Friday said that it has suffered a loss after tax and exceptional items of about £5.1 billion this year so far, compared to profit of €1.8bn in 2019.
Commenting on the airline group's loss, CEO Luis Gallego said apart from the rise in coronavirus cases worldwide, the constant changes in the lockdown restrictions in the UK has majorly affected its revenue.
Gallego said the restrictions like quarantine for travellers coming to the UK has led to reluctance among customers. All these factors are affecting IAG’s business strategies. He added that as there is very little hope of recovery from the coronavirus pandemic and the airlines group is hoping that their capacity will be around 30 per cent of Q4 2019.
IAG, which is also the owner of other airlines such as Iberia, Aer Lingus and Vueling, added that it has slashed cash operating costs by 54 per cent and staff members have been cut by 10,000. Most job losses are at the British Airways.
Also Read: EasyJet and IAG Stocks Soften with Slump in Demand on New Quarantine Measures
Expressing concern, Gallego said that the government should announce pre-departure and probably post-flight testing to reduce the requirement for quarantine, which will open the routes and accelerate the economic condition of the country.
Also Read- British Airways Pushes for Coronavirus Airport Testing
IAG had slashed capacity at the start of September because of new quarantine norms adopted across Europe but the company said demand had been even weaker than expected since then.Gallego said that once the route will be open, the demand would go up for sure. But it might be 2023 before the demand reaches 2019 levels.
Echoing similar views, Sean Doyle, the chief executive officer at British Airways, said that the UK government should scrap the quarantine obligation for international arrivals. He pointed out that the present quarantine system is putting an adverse effect on the country’s tourism and corporate business travel.
