IAG posts €1.3bn Q3 loss, cuts capacity

British Airways-owner IAG posted a €1.3bn third quarter loss and downgraded its capacity guidance as Covid-19 restrictions continued to hammer the travel market.

The company, which also owns Aer Lingus and Iberia, said the loss compared with a profit of €1.4bn a year ago.

Fourth quarter capacity was cut to no more than 30% compared to 2019. As a result, the group no longer expected to reach breakeven in terms of net cash flows from operating activities during the final three months of the year.

Total revenue plunged 83% to €1.2bn, compared to €7.3bn last year.

“Recent overall bookings have not developed as previously expected due to additional measures implemented by many European governments in response to a second wave of Covid-19 infections, including an increase in local lockdowns and extension of quarantine requirements to travellers from an increasing number of countries,” IAG said in a trading statement.

“At the same time, initiatives designed to replace quarantine periods and increase customer confidence to book and travel, such as pre-departure testing and air corridor arrangements, have not been adopted by governments as quickly as anticipated.”