Expatica news

Airline giant IAG slashes losses as skies reopen

British Airways owner IAG said Friday that third-quarter losses shrank sharply on the gradual lifting of Covid travel curbs, and expressed hope of a return to profit next year.

The loss after taxation hit 574 million euros ($664 million) in the three months to September compared with 1.8 billion euros a year earlier, IAG said in a statement, while revenues more than doubled on strong long-haul demand.

The group’s star performer, Spanish carrier Iberia, meanwhile bounced back into profitability.

The European travel conglomerate, whose portfolio also includes Aer Lingus, Level and Vueling, added that it flew 43.4 percent of its pre-pandemic 2019 capacity.

IAG expects this figure to climb to 60 percent in the fourth quarter or three months to December.

“There’s a significant recovery underway,” said Chief Executive Luis Gallego in Friday’s earnings release.

“We continue to capitalise on surges in bookings when travel restrictions are lifted.

“The full reopening of the transatlantic travel corridor from Monday is a pivotal moment for our industry.”

The pandemic slammed global aviation last year as travel curbs destroyed demand, but the industry has been boosted this year by the gradual lifting of international travel restrictions.

The full reopening of worldwide air travel has however been held back by the Delta variant of the coronavirus.

Operating losses also improved sharply to 452 million euros, down from 1.9 billion euros last time around.

And revenues soared to 2.7 billion euros from 1.2 billion.

“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,” added Gallego.

“Our teams are creating opportunities and implementing initiatives to transform our business and preparing it for the future so that we emerge more competitive.”

IAG added that both Iberia and Vueling had recovered well from pandemic fallout.

“Iberia and Vueling continued to be the best performers within the group,” noted Gallego.

“Iberia returned to profitability while Vueling reached breakeven at the operating level.

“Both seized opportunities to strengthen their positions on routes to Latin America and the Spanish domestic market.

IAG suffered a vast net loss of 6.9 billion euros in 2020, slashing about 10,000 jobs at British Airways and 500 positions at Aer Lingus as it sought to navigate the Covid crisis.