International Consolidated Airlines Group (IAG), a holding company of British Airways (BA), reported preliminary financial results for the third quarter of 2020. The company counted that due to the COVID-19 related travel restrictions it would suffer a €1.3 billion loss in the third quarter of 2020. IAG announced it was forced to complete further cuts of British Airways capacity.
On October 22, 2020, the company published preliminary financial results of the third quarter of the ongoing year. The report showed that the owner of BA raised €2.74 billion from shareholders and this way boosted the group’s liquidity to a total of €9.3 billion.
However, IAG suffered a revenue drop by 83% to €1.2 billion in September 2020, compared to €7.3 billion for the same period in 2019. The decline in revenue led the group to undergo a €1.3 billion operating loss, compared to a profit of €1.4 billion profit in the third quarter of 2019.
The owner of British Airways reported that it would complete capacity cuts by reducing flight schedule up to 30% compared to the same period in 2019.
IAG explained that further cuts would come as a result of the recent drop in the overall bookings which “have not developed as previously expected due to additional measures implemented by many European governments in response to the second wave of Covid-19 infections“, announced the group in a report.
The company added that an increase in local lockdowns, as well as an extension of quarantine requirements for airline passengers, also were notable reasons to cut the BA capacity more.
„In response to the high uncertainty of the current environment, IAG now plans for capacity in 4Q 2020 to be no more than 30% compared to 2019. As a result, the Group no longer expects to reach breakeven in terms of Net cash flows from operating activities during 4Q 2020,“ in a press release stated IAG.
IAG outlined that currently released results were only preliminary data. The group would publish detailed results of the third quarter on October 30, 2020.