Business

IAG to Ramp Up 3Q Capacity But Still Can’t Provide Full-Year Guidance — Update

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By Anthony O. Goriainoff

International Consolidated Airlines Group SA said Friday that it was ready to take advantage of a surge in air travel demand in line with increasing vaccination rates but it remains unable to provide full-year guidance.

IAG said second-quarter passenger capacity was 22% of the level in 2019, and had been affected by Covid-19 and government restrictions and quarantine requirements. It said capacity for the third quarter will be around 45% of 2019’s level, although this remained uncertain and was subject to a continuing review.

The airline group –which houses carriers British Airways, Iberia and Vueling, among others– said that there is evidence of widespread pent-up demand when travel restrictions are lifted, and that this was reflected in Iberia’s and Vueling’s results.

“They were the best performers within the group in the second quarter reflecting stronger Latin American and Spanish domestic markets driven by fewer travel restrictions,” Chief Executive Luis Gallego said.

Iberia’s long-haul operations benefited from travel over the Christmas and New Year period, as well as the lead up to Easter. Nonetheless European restrictions introduced as a response to the Covid-19 variant identified in Brazil adversely impacted its passenger numbers. British Airways’ capacity was affected by the U.K. government’s travel restrictions and the re-introduction of the traffic light travel system.

The company said the recent move by the U.K. government to allow fully vaccinated travelers from countries in the EU and the U.S. to enter the country without having to quarantine upon arrival was an important first step toward the reopening of the transatlantic travel corridor.

IAG said that it wasn’t providing any financial guidance for 2021 due to the uncertainty over the timing of the lifting of government travel restrictions and the continued impact and duration of the Covid-19 pandemic.

For the six months ended June 30 its pretax loss was 2.34 billion euros ($2.78 billion) compared with a pretax loss of EUR4.21 billion in the year-earlier period.

Net loss for the first half was EUR2.05 billion, compared with a net loss of EUR3.81 billion in the year-prior period.

Operating loss before exceptional items –a key metric for the company– for the second quarter was EUR1.05 billion, and EUR2.18 billion for the half year, compared with EUR1.37 billion and EUR1.92 billion respectively in the year-prior period, IAG said.

Revenue for the half year was EUR2.21 billion, compared with EUR5.29 billion a year earlier.

“In the short term, our focus is on ensuring our operational readiness, so we have the flexibility to capitalize on an environment where there’s evidence of widespread pent-up demand when travel restrictions are lifted,” Chief Executive Luis Gallego said.

Write to Anthony O. Goriainoff at [email protected]

Read more at www.marketwatch.com

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