Reaction: British Airways owner IAG 'still in emergency mode' after huge quarterly losses

British Airways owner IAG has called for greater ambition from the UK government over the lifting of travel restrictions as the group racked up massive first-quarter losses.

Friday, 7th May 2021, 9:18 am
Updated Friday, 7th May 2021, 9:19 am

IAG chief executive Luis Gallego said: “We consider now is the time to start travelling again. We believe that the government needs to be a bit ambitious in getting global travel back on track and bring the benefits of all the efforts that the government and people have done with the vaccination rollout.

“I think they need to recognise that people who are vaccinated or have been tested can travel without restrictions.”

His comments come as the group, which also owns the Aer Lingus and Iberia carriers, plunged to a pre-tax loss of €1.22 billion (£1.1bn) in the first three months of the year.

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British Airways flight BA9170E, a Boeing 747 aircraft with the registration number G-CIVD, departs from Heathrow Airport heading for Spain, as the airline last year began the final phase of retiring its 747 fleet. Picture: Steve Parsons/PA Wire

Passenger numbers remain at record low levels due to the pandemic, at just 19.6 per cent of the pre-Covid levels in 2019 and the second quarter of the year is at just 25 per cent due to continued uncertainty.

IAG remains financially stable, bosses stressed, with a new €1.2bn bond heavily oversubscribed and a new three-year €1.76bn credit facility agreed with lenders but future cash raises could be needed.

Cargo-only flights increased from 969 in the final quarter of 2020 to 1,306 in the first three months of the year.

Gallego added: “We’re ready to fly, but government action is needed through four key measures:

“Travel corridors without restrictions between countries with successful vaccination rollouts and effective testing such us the UK and the US.

“Affordable, simple and proportionate testing to replace quarantine and costly, multi-layered testing.

“Well-staffed borders using contactless technology including e-gates to ensure a safe, smooth flow of people and frictionless travel.

“Digital passes for testing and vaccination documentation to facilitate international travel.”

Adam Vettese, an analyst at investment platform eToro, said: “International Consolidated Airlines Group has spent the past 14 months fighting for its very survival but, finally, there is light at the end of the tunnel.

“The government’s decision to gradually open up the skies to holidaymakers again on May 17 is a major step for the whole industry, which has been on its knees this past year. However, there is absolutely no doubt that coronavirus has left scarring that will take years to heal.”

Susannah Streeter, senior investment and markets analyst at financial services group Hargreaves Lansdown, noted: “British Airways owner IAG is still in emergency mode, battening down the hatches as global travel remains in limbo pushing bookings to a fraction of usual levels.

“IAG can do little but hold on tight through the continued turbulence and hope government policy will allow it navigate out of the crisis. But there are still threatening grey skies ahead, not least with the spiralling of cases in India which could knock confidence in the travelling public.

“Although flight paths to re-opening routes are being unveiled by governments as vaccine rollouts ramp up, there is a risk a patchwork of new rules and regulations will emerge which could lead to a bumpy recovery ahead.”

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