IAG first-half losses narrow, capacity set to grow

British Airways and Iberia parent IAG posted a narrowing of its first-half operating losses on Friday and said capacity was set to grow, but did not provide any annual guidance due to Covid uncertainty.

In the six months to the end of June 2021, operating losses narrowed to €2bn from €4bn in the same period a year ago, even as total revenue declined 58% to €2.2bn. IAG noted that in 2020, the impact from Covid was mainly limited to the period from March onwards.

The company, which also owns Vueling and Aer Lingus, said capacity continues to be dented by the Covid crisis, government restrictions and quarantine requirements. It plans to operate around 45% of 2019 passenger capacity between July and September, up from 21.9% in the previous three months. However, it also cautioned that this remains uncertain and is subject to review.

IAG said it was not providing guidance for 2021, given the uncertainty over the timing of the lifting of government travel restrictions and the continued impact and duration of the pandemic.

Chief executive Luis Gallego said: "We welcome the recent announcement that fully vaccinated travellers from amber countries in the EU and the US will no longer have to quarantine upon arrival in the UK. We see this as an important first step in fully re-opening the transatlantic travel corridor.

"All our airlines continue to take significant actions to preserve their strength through the current pandemic and to position them for recovery. We continue to build resilience by preserving cash, boosting liquidity and reducing our cost base. At 30 June, the group's liquidity was €10.2 billion with a significant improvement in operating cash flow compared to previous quarters."