IAG hammers down on costs, calls for pre-flight Covid testing
British Airways-owner IAG called on governments to adopt pre-departure Covid-19 testing as it continued to bear down on costs in the face of a second wave of the pandemic.
The airline group, which issued more details on third quarter trading after last week reporting a €1.3bn third quarter loss, said its results were “exacerbated by constantly changing government restrictions”. The total figure came to €1.9bn including exceptional items relating to fuel hedges and job cuts.
"We are calling on governments to adopt pre-departure testing using reliable and affordable tests with the option of post flight testing to release people from quarantine where they are arriving from countries with high infection rates,” said new chief executive Louis Gallego.
IAG cut cash operating costs by 54% from to €205m a week during the three months to September 30. The company also set aside €275m for staff restructuring at British Airways and Aer Lingus where 10,000 job are being axed.
"The group has made significant progress on restructuring and we continue to reduce our cost base," Gallego, who took over from Willie Walsh last month, added.
“When we open routes, there is pent up demand for travel. However, we continue to expect that it will take until at least 2023 for passenger demand to recover to 2019 levels.”
The group, which also owns Iberia and Vueling, last week cut fourth quarter capacity 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.