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British Airways’ Parent Company Posts $9 Billion Loss
International Airlines Group (IAG) has announced an operating loss of 7.426 billion Euros ($9 billion) for the full 2020 financial year, a massive drop in comparison to the 3.285 billion Euro operating profit the conglomerate posted in the 2019 financial year.
“Our results reflect the serious impact that Covid-19 has had on our business. The group continues to reduce its cost base and increase the proportion of variable costs to better match market demand. We’re transforming our business to ensure we emerge in a stronger competitive position,” IAG CEO Luis Gallego said in a statement announcing the results.
IAG is the parent company of the U.K.’s British Airways, Ireland’s Aer Lingus and Spainish carriers Iberia and Vueling. The consortium also includes Spanish-based low-cost long-haul carrier LEVEL and prior to the COVID-19 pandemic was in the process of purchasing Air Europa, the third-largest air operator in Spain. The dramatic results were not unexpected and highlight the impact that the pandemic with its accompanying travel restrictions and drop in passenger demand has had on the aviation industry globally.
“The aviation industry stands with governments in putting public health at the top of the agenda. Getting people traveling again will require a clear roadmap for unwinding current restrictions when the time is right,” Gallego told the Guardian. “We know there is pent-up demand for travel and people want to fly. Vaccinations are progressing well and global infections are going in the right direction. We’re calling for international common testing standards and the introduction of digital health passes to reopen our skies safely.”
Earlier this week, U.K. Prime Minister Boris Johnson announced a staged approach for emerging from the lockdowns and other restrictive travel measures which have affected the aviation industry and the wider economy. Under Johnson’s plan, international travel — which is currently prohibited by law — will be possible beginning May 17 if health targets are met. BBC News reported that the proposed lifting of travel restrictions has already resulted in a surge in bookings for summer holidays with easyJet seeing a 337% increase in flight bookings and a 630% increase in holiday bookings.
Though passengers may be feeling confident at the prospect of summer holidays abroad being allowed, it is still unclear what measures and restrictions travelers may face in the destination countries, nor what quarantine or self-isolation measures may be required upon return to the U.K. Hence Mr. Gallego’s call for the introduction of digital health passes to promote confidence in and facilitate ease of travel.
In other news associated with IAG, the consortium announced on Thursday that the current chief executive and chairman of IAG Cargo Lynne Embleton will become Aer Lingus’s chief executive from April 6. Embleton joined British Airways in 1992 and has held numerous senior leadership positions at British Airways including managing director at Gatwick, director of strategy and chairman of BA CityFlyer.
“Lynne has huge experience within the Group. At IAG Cargo she has led the company as it adapted rapidly to the COVID-19 pandemic and has made significant progress in digitally transforming the business,” Gallego said of the announcement. “I’m confident that she has the skills to lead Aer Lingus through the pandemic and enable it to emerge in a strong competitive position in the future.”
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