For the third quarter, the Group’s operating loss was (€1.3) billion before exceptional items compared to an operating profit of €1.4 billion for Q3 2019. IAG’s operating loss for 9m 2020 before exceptional items totaled (€3.2) billion compared to a 9m 2019 profit of €2.5 billion.
On Friday (October 30, 2020) the International Consolidated Airlines Group (IAG) reported their financial results for the first nine months of 2020. The Group reported a statutory loss of (€5.6) billion or (€2.80) per share for 9m 2020 on a 66 percent revenue decline to €6.57 billion. For the third quarter, the Group reported an operating loss (before exceptional items) of (€1.3) billion versus an operating profit of €1.4 billion during Q3 2019. Capacity for the third quarter was down 78.6 percent year-over-year while 9m capacity was down 64.3 percent versus 2019. The Group’s operating loss (before exceptional items) for 9m 2020 totaled (€3.2) billion compared to an operating profit of €2.5 billion in the same period last year. Exceptional charges for 9m 2020 totaled €2.76 billion and include derecognition of fuel and foreign hedges, fleet impairment and restructuring costs. The Group’s nine month loss after taxes but before exceptional items was (€3.2) billion, while the 9m 2020 statutory loss (after tax and exceptional items) totaled €5.57 billion. In Friday’s announcement, IAG’s Chief Executive Officer, Luis Gallego, said,
“In quarter 3 we’re reporting an operating loss of €1,300 million before exceptional items compared to an operating profit of €1,425 million last year. The total operating loss was €1,918 million, including exceptional items relating to fuel hedges plus restructuring costs at British Airways and Aer Lingus. These results demonstrate the negative impact of COVID 19 on our business, but they’re exacerbated by constantly changing government restrictions. This creates uncertainty for customers and makes it harder to plan our business effectively.
“We are calling on governments to adopt pre-departure testing using reliable and affordable tests with the option of post flight testing to release people from quarantine where they are arriving from countries with high infection rates. This would open routes, stimulate economies and get people travelling with confidence. When we open routes, there is pent up demand for travel. However, we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels. The Group has made significant progress on restructuring and we continue to reduce our cost base and increase the proportion of our variable costs. We have also successfully completed a €2.74 billion capital increase in the quarter. It strengthens our financial and strategic position and makes IAG better placed to take advantage of a recovery in air travel demand.”
As of September 30, 2020, IAG has €5 billion in cash, down €1.7 billion from December 31, 2019. The Group also has committed and undrawn general and aircraft facilities of €1.6 billion, bringing the company’s total liquidity at the close of Q3 to €6.6 billion. In early October, the Group successfully completed a capital increase with gross proceeds of €2.7 billion, bolstering their pro-forma liquidity to €9.3 billion. During the third quarter, IAG recognized an exceptional cost of €275 million related to employee restructuring at British Airways and Aer Lingus with the reduction of approximately 10,000 employees, with over 9,000 leaving by the close of the third quarter. The Group also retired legacy aircraft fleets early including Boeing 747s (British Airways) and Airbus A340-600s (Iberia) during the quarter.
Source: International Consolidated Airlines Group (IAG)