The International Consolidated Airlines Group (IAG) reported on Thursday a total first quarter operating loss of €1.68 billion or (€0.84.8) per share on a 13.4 percent year over year revenue decline to €4.585 billion.
Today, the International Consolidated Airlines Group (IAG), parent company of British Airways, Aer Lingus, Iberia, Vueling and Level, announced their first quarter financial results. The Group reported a total first quarter operating loss of €1.68 billion on a 13.4 percent revenue decline to €4.585 billion. Excluding exceptional items related to fuel and foreign currency hedges, the Group reported a first quarter operating loss of €535 million, compared to a Q1 2019 operating profit of €135 million. From late March, the company has reduced capacity by 94 percent and while most of the fleet is grounded, continues to operate passenger, repatriation and cargo-only flights, utilizing efficient and appropriately sized next-generation aircraft where practical. In Thursday’s announcement, IAG’s Chief Executive Officer, Willie Walsh said,
“In quarter 1 we’re reporting a substantial operating loss of €535 million before exceptional items compared to an operating profit of €135 million last year. Total operating losses including exceptional items related to fuel and foreign currency hedges came to €1,860 million. The operating result up to the end of February was in line with a year ago. However, March’s performance was severely affected by the government travel restrictions due to the rapid spread of COVID-19 which significantly impacted demand. Most of the loss in the quarter occurred in the last two weeks of March. We had a strong balance sheet and liquidity position coming into this crisis. We are taking all appropriate actions to preserve cash, reduce and defer both capital spending and operating costs and secure additional financing in order to strengthen and maintain our liquidity.
Mr. Walsh further stated,
At the end of April our liquidity stood at €10.0 billion. We are planning for a meaningful return to service in July 2020 at the earliest, depending on the easing of lockdowns and travel restrictions around the world. We will adapt our operating procedures to ensure our customers and our people are properly protected in this new environment. We are working with the various regulatory bodies and are confident that changes in regulations will enable a safe and organized return to service. The Industry will adapt to new requirements in the same way we it has adapted to developments in security requirements in the past. However, we do not expect passenger demand to recover to the 2019 level before 2023 at the earliest. This means Group-wide restructuring is essential in order to get through the crisis and preserve an adequate level of liquidity. We intend to come out of the crisis as a stronger Group.”
IAG is taking actions across the Group to bolster liquidity including accessing the UK’s Coronavirus Corporate Finance facility (CCFF) and Spain’s Instituto de Crédito Oficiel (ICO) and extending British Airways’ revolving credit facility. Additionally, for April and May the Group has trimmed its typical weekly operating costs from €440 million to €200 million/week. 2020 CAPEX has been reduced by €1.2 billion, with most of the remaining €3.0 billion covered by previously arranged financing. The company expects a meaningful return to service in July but doesn’t expect 2020 capacity to recover by more than 50 percent. IAG believes that their second quarter results will be substantially worse than the first quarter.
In trading Thursday afternoon, shares in the International Consolidated Airlines Group SA (LSE: IAG) were down 3.23% at €2.19/share (5:35 PM CEST).
Source: IAG