The Limited Times

Now you can see non-English news...

IAG suffers record losses of 6,923 million in 2020 due to the aviation stoppage

2021-02-26T16:04:18.649Z

The group to which Iberia belongs does not expect a recovery in air traffic until at least 2023 and requires digital health cards to fly



British Airways planes parked at London's Heathrow Airport, owned by IAG.Reuters

International Airlines Group (IAG), the group to which the airlines British Airways, Iberia, Vueling and Aer Lingus belong, suffered a record net loss of 6,923 million euros in 2020 - compared to the profit of 1,715 million obtained in the previous year-, as a result of the impact of the coronavirus pandemic, as reported by the group this Friday to the National Securities Market Commission (CNMV).

The practical paralysis of air traffic between March and June and the almost total absence of tourism throughout the year as a result of the virus also explain a fall in revenues to just a third of those of 2019.

In addition to a drop in revenue of 69.4%, to 7,806 million, the losses are due to the cost of an exceptional item of 3,061 million for the coverage of fuel purchases made before the price collapsed due to the collapse of the worldwide demand, and due to the depreciation of the fleet, for aircraft that were retired or stopped early.

The result of operations, before special items and taxes, showed losses of 4,365 million euros compared to a profit from operations of 3,285 million in 2019.

Despite this crisis, as of December 31, the group's liquidity was 10.3 billion euros, including 2.7 billion from a capital increase and a loan of 2 billion pounds sterling with guarantees from the British Government.

A higher figure than before the pandemic.

Net debt grew 28.9% in the year, to 9,762 million euros.

As a result of the covid-19, the group expects that demand will remain at very low levels for several years and that it will not recover the levels observed in 2019 until at least 2023. By 2021, given the "uncertainty" about the recovery of traffic air has not given forecasts.

The passenger transport capacity in the fourth quarter was 26.6% of the total for 2019, while in the full year it was 33.5% of the total of the previous year.

"And it continues to be negatively affected by the pandemic, as well as by government restrictions and quarantine measures," adds the company, which has on other occasions been very critical of government restrictions to deal with the pandemic.

“The current passenger transport capacity plans for the first quarter of 2021 are around 20% of the capacity of 2019, but they remain uncertain and subject to review,” explains the group, which “continues to focus on reducing expenses, increase the variability of its cost base and strengthen its liquidity initiatives ”.

By company, British Airways posted operating losses of 3,880 million pounds (4,460 million euros);

Aer Lingus lost 563 million;

Iberia had red numbers of 1,411 million and Vueling's losses amounted to 875 million.

More cargo, fewer passengers

The group's passenger income was 5,512 million, 75.5% lower than the previous year.

Its airlines carried 31.3 million passengers, 73.6% less.

Flight occupancy fell 20.8 points, to 63.8%.

Cargo revenues somewhat offset the drop in passengers, as they rose 16.9% to 1,306 million.

With this, total income was 7,806 million, 69.4% lower.

The effort to reduce expenses paid off and they fell 33.5% to 15,232 million.

Among them, those of personnel fell by 36.8%, to 3,560 million, and those of fuel and emission rights amounted to 3,735 million, 38% less.

The

holding company

explains that it has managed to register direct savings in salaries of 730 million thanks to the ERTES of Spain and the salary protection programs of the United Kingdom.

Along these lines, it has also taken steps to reduce its fleet of aircraft and associated maintenance costs.

Thus, IAG closed 2020 with 533 aircraft - of which 241 were temporarily stopped - compared to 598 in December 2019. After the cut is the withdrawal of the 32 Boeing 747-400 from British Airways, the 15 Airbus A340-600 from Iberia and the stoppage of 37 aircraft pending their sale or return to lessors.

During the period, the group received 34 aircraft.

Health card

Luis Gallego, CEO of IAG, has assured in a note that the results reflect "the tremendous impact that covid-19 has had on our business", but he has been sure that "there is a contained demand for travel and that the people want to fly ”.

“Vaccinations are progressing well and global infections are heading in the right direction.

We ask for common international standards in terms of testing and the implementation of digital health cards to reopen our skies safely ”, the Spanish manager has requested in the results note.

Along these lines, Gallego insisted, in a teleconference held this Friday, that having a test or a certificate will help passengers feel safe to travel, although he admitted the importance of reaching a global vaccination. Looking ahead to 2021 and after the announcement of the British Government on the "roadmap" for de-escalation in the United Kingdom, he trusted that the group will have a "good summer".

Source: elparis

All business articles on 2021-02-26

You may like

Business 2021-02-28T11:22:19.521Z

Trends 24h

Latest

© Communities 2019 - Privacy