British Airways owner suffers huge losses: boss says 'people want to fly'
The huge deficit compares with a profit of €2.28bn a year earlier.
Revenues slumped 69 per cent from €25.5bn to €7.8bn last year as the Covid-19 crisis hit.
The number of passengers using IAG’s airlines remains significantly down on pre-pandemic levels, and fell again during the traditional peak festive season.
The group, which also owns Aer Lingus and Iberia, said capacity for 2020 was just 33.5 per cent of 2019 levels, and is only expected to be around 20 per cent between January and March.
Chief executive Luis Gallego said the results “reflect the serious impact that Covid-19 has had on our business”.
Getting people travelling again will require “a clear road map for unwinding current restrictions when the time is right”, he added.
Richard Flood, investment manager at Brewin Dolphin, said: “[These] results from IAG demonstrate the huge impact of Covid-19 on the airline industry. However, the group took a range of self-help measures to see it through the turbulence of last year and, as we approach the re-opening of economies and potentially more travel, IAG is in a comparatively strong position.
“The group is much less exposed to business travel than some of its peers, which is expected to take longer to return; has access to ample liquidity; and will likely benefit from reduced capacity from competitors on key routes.
“Although there is no guidance for 2021 from IAG, it looks to be among the aviation industry’s survivors.”
Neil Shah, director of research for Edison Group, noted: “Going forward, investors will remain anxious about the future of IAG as the company declined to provide guidance and lockdowns around the world continue to be enforced.
“As the group continues to be involved in restructuring and ways to reduce costs, investors will brace themselves for the coming months while they wait for progress being made on vaccine roll-outs.”
Gallego added: “We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction.
“We’re calling for international common testing standards and the introduction of digital health passes to reopen our skies safely.”
He said IAG airlines will not require passengers to prove they have been vaccinated against Covid-19.
Testing will be key for travel until vaccines have been rolled out across the world, he added.
Australian airline Qantas has said in future it will require passengers to prove they have received a jag before they can board its international flights.
Gallego said there was a “big increase” in demand for travel after Prime Minister Boris Johnson announced his plan for easing restrictions in England on Monday.
Flight bookings were up by more than 60 per cent compared with the same day during the previous week.
“If we continue with the road map to open aviation, we are going to have positive summer,” Gallego said.
He revealed that IAG will contribute to a government taskforce evaluating how foreign travel can resume.