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InvestingStock MarketsBritish Airways owner IAG hit by €1.2bn loss amid ‘uncertain’ passenger forecast

BA Losses

The owner of British Airways, International Airlines Group, reported a €1.2bn pre-tax loss for the first quarter and reiterated the need for the rollout of digital vaccine passports to enable the beleaguered aviation industry to get passengers back in the skies.

IAG said passenger capacity slumped to less than a fifth of pre-pandemic levels in the first three months of 2021, and it expects only a slight improvement in the second quarter to 25% of 2019 levels.

The airline group, which made a €1.8bn (£1.6bn) pre-tax loss in the first quarter last year, said its forecast on passenger numbers remains “uncertain and subject to review”.

Luis Gallego, the chief executive of IAG, said: “We’re doing everything in our power to emerge in a stronger competitive position. We’re absolutely confident that a safe restart to travel can happen as shown by the scientific data. We’re ready to fly but government action is needed.”

Gallego called for four measures including restriction-free travel corridors between countries, “affordable, simple and proportionate” testing to replace quarantine, “contactless” transit through airports and digital health passes and vaccine documentation.

“These measures will enable a safe reopening of our skies,” he said.

IAG cut its weekly costs to €175m a week in the first quarter and passenger revenues plunged by 88% in the first quarter to €459m. In the same period last year, passenger revenues were €3.9bn.

The company said its cargo operation enabled it to operate a “more extensive passenger long-haul network”. IAG operated 1,306 cargo-only flights in the first three months, which generated €350m in revenue, a 42% year-on-year increase and a record for the first quarter. In the final three months of last year, IAG operated 969 cargo-only flights.

“Given the uncertainty over the timing of the lifting of government travel restrictions and the continued impact and duration of Covid-19, IAG is not providing profit guidance for 2021,” the company said.

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British Airways owner IAG hit by €1.2bn loss amid ‘uncertain’ passenger forecast

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